Prepare for the “Flight to Quality” in Programmatic

Most advertising budgets have a growing portion allotted to programmatic spend. At this stage of the game, advertisers not buying programmatically are in the minority. Just like the beginning days of online advertising, there comes a point where the industry needs to take a step back and address the challenges that come with exponential growth.

Countless news sources have addressed the growing industry concerns around fraud, viewability, and programmatic solutions that are less than ideal. The media buyer’s shift toward greater quality in programmatic advertising is upon us.

If you have experience with the financial industry, you may be familiar with the phrase, “flight to quality,” or when investors show skepticism towards certain markets and opt to move away from volatile funds to more secure investments. This same concept applies to media buying, as advertisers are unwilling to risk their media investments for low quality advertising solutions, such as out of view ads or fraudulent traffic.

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Solving both is no easy feat; the industry is expected to spend $6.3 billion on fraudulent bot traffic and waste even more spend on approximately 54 percent of out of view ads. Just like in the financial markets, this won’t be a gradual shift from spend on lower quality to higher quality solutions. Once brands decide to operate at higher standards their investment dollars will quickly follow and the shift could be painful for those caught off-guard.

Introducing Quality by Design

Just like in the early days of industry privacy self-regulation, there was a shift from a vendor specific, privacy policy led strategy to Privacy by Design, hat tip to Omar Tawakol, Blue Kai chief executive, for championing this effort with the BlueKai Registry in 2010. Privacy by Design triggered a proactive framework driven by the NAI membership and the DAA where companies agreed to higher standards and designed tailored privacy controls.

The time has come again for the industry to focus on overall quality; where publishers and industry players must shift from a reactive approach to advertising quality to a proactive, product-led approach. Products should be designed with built-in controls versus approaching quality as an after thought.

Publishers: Design for High Viewability and Low Fraud

Both fraud and viewability go hand-in-hand when discussing online advertising and you can’t ignore them. Advertisers will expect ads to be in-view and viewed by humans. Fraud is a complicated matter since even powerhouses like Google have started to speak about how pervasive the issues are. Establishing inventory that will be served in view and working with reputable vendors is the first step to a move towards quality.

Since viewability has proven to lead to higher engagement and conversions, publishers with high viewability metrics will establish a stronger reputation. Also, viewability is likely to play a larger part of the attribution model credit conversation. You need to take stock of your ad offerings to determine if they can deliver, on their own merits, the level of quality that is expected going forward. If yes, fantastic. If no, start to evaluate partners who can help you provide better quality.

Advertisers: Proactive Media Buying

We urge media buyers to carefully evaluate their buying criteria. You should ask the difficult questions, demand accountability, and raise the bar when it comes to quality. The inventory quality discussion needs move up in the media negotiation, not as a reactive, post-buy clawback based on missed viewability or fraud targets. No brand wants wasted impressions and the more proactive you are in ensuring every impression is effective, the better off the ecosystem becomes.

Ask vendors how proactive they are with fighting fraud and viewability and ask your media teams how they solve the solution. One way to keep these multi-billion dollar issues from worsening is to demand higher standards of your publishers and another is to stop buying impressions questionable quality. That’s easier said than done if your success models are still based on clicks and last view attribution.

The industry flight to quality is already underway and it’s likely to speed up in the coming months. The big question is are you pre

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