Saturday Thought: Programmatic Promises

Hope everyone is having a fantastic start to the weekend.

It’s Daylight’s Savings tomorrow, so you have one extra hour tomorrow to read this newsletter.

Lucky you!

Today’s is sponsored by my mom, Donna. She’s infamous for 2 things.

One, she’s a kick-ass title closer in the NYC area, so if you have a home you’re looking to buy, sell, refinance, please contact her.

But more importantly, her email address is famously NY CLOSER, or…

NYC LOSER.

She’s obviously the former, despite the unfortunate latter.

Please contact my mom, she’s awesome! And she totally didn’t pay her son to sponsor his fledgling newsletter.

Onto the thought…it’s a hard marketing one unfortunately Mom…

Saturday Thought

I’ll keep this brief (I think).

If you’re buying media in 2023…

…and you’re buying digital media programmatically…

…I have but one question for you…

Why?

Why are you doing that?

Never mind the $20B stolen amidst the programmatic supply chain.

The $20B shouldn’t just be an alarm at how much is being stolen.

It should make you think, “why are people spending $20B on shitty ads in the first place?”

And to be clear, I’m talking about display ads, video ads, CTV ads, etc. bought in programmatic exchanges predominantly on the open web.

Let’s break down programmatic digital advertising piece by piece in 3 components:

• Reach

• Attention

• Cost

From a reach perspective, there was a time where this might have made sense.

Most internet consumption was happening on the open web.

But now it isn’t.

It happens in platforms, like Facebook, Instagram, TikTok, Netflix, Amazon, etc.

In fact, these platforms have now cut off traffic to the open web, trying to house even more on their own platforms.

So just like video buyers buying a decreasing pool of reach on TV, digital buyers are buying a decreasing pool of reach on open web publishers.

Plus, more and more premium publishers are getting out of the programmatic game.

Bloomberg announced last year they’re done with programmatic. And the failing digital companies of the 2010s like Buzzfeed still rely on programmatic for revenue. That’s how you know it’s a sham!

But, I know what you’re thinking. We buy programmatically for targeting!

Targeting?

Targeting that is inaccurate half the time?

Targeting that is increasingly unavailable due to privacy laws?

Targeting that will be sunset sooner rather than later, because it’s based on 3rd-party cookies?

So we’ve crossed off reaching enough people and the right people as a justification for programmatic digital advertising.

Let’s go to another easy one: attention.

Hah.

Typically, with programmatic digital, you’re buying the least effective media placements available….anywhere.

There is now well documented research that a display ad, a native ad, etc. is horribly ineffective next to literally any other form of media.

But you say…you can buy plenty of things programmatically. What about video!

What about video?

Video that shows up in terrible or unsafe contexts?

There’s a reason YouTube had so much fraud this summer, and it’s not because of ads that ran on YouTube.

It’s because of ads they did not properly disclose they were running off of YouTube.

Ok, what about CTV?

CTV would work…if ad-supported CTV was mature.

But it’s not. Netflix is still just getting off the ground and opening itself up to DSPs beyond Xander.

Hulu is the biggest and best game in town, but most of the CTV inventory is made up by the Crackles, the Philos, the Xumos, the CTV services you wouldn’t exactly bring home to mom (hi Donna!) and introduce to your family.

Which brings us finally to cost.

Sure, the CPMs are cheap.

And this is likely the reason why programmatic digital is still on media plans - it offers the “same” volume of impressions typically, year over year, for a cheap cost, and when rolled together with all other impressions and investments, tells a nice story to senior stakeholders about the bang for buck of the media investment.

But cost per impression doesn’t tell the whole story.

It doesn’t tell the story of how little attention these formats garner.

How the targeting you’re paying for is shoddy at best.

Or how much fraud ($20B!) there is in this space.

So, there you have it.

When looking at 3 key components - reach, attention, cost - there is no logical grounds in which programmatic digital media should be on your media plans.

Why is it on there?

Probably cost.

Probably because the agency you’re working with charges 10-15% commissions on programmatic buying, vs. 5% for everything else, and recommending it is how they meet their quarterly forecasts.

Probably because the brand you work with or for just spent a ton in-housing a trading desk, so those guys have to buy something.

Probably because the promise of it is greater then the execution of it, and too many people are still caught up in the dream vs. the reality.

Or maybe none of these. Maybe the floor is coming. A big-time DSP went bankrupt earlier this year.

We’ll see.

But listen, I’m no saint.

I’ve run programmatic digital campaigns before. I’m overseeing a few right now.

But this paternity leave epiphany is making me question the whole system.

Maybe becoming a dad has made me look at the tough questions in life.

Like, how to raise a baby?

And, how to maximize a media plan beyond shiny programmatic promises?

Stay thinkin my friends,

Danny