By: Juan Cardenas
In 2011, the digital advertising world saw a monumental shift in the way both brands and agencies were thinking about online media buying. It seemed like overnight brands went from employing a team of advertisers to turning the role over to an automated, commoditized technology – Real Time Bidding (RTB). In theory, RTB would solve for numerous pain-points in digital advertising – consumers’ desire for tailored and relevant ad content, operational inefficiencies, speed-to-market, flat growth of impressions, and, for publishers, present an effective way of selling unused inventory.
While RTB has brought numerous benefits to the digital advertising ecosystem, the cracks in the process are starting to show, particularly for smaller publishers and both agencies and publishers serving the Hispanic market. Four years down the road from launching in the digital space, brands are just now starting to feel the effects of RTB’s inadequacies. The overarching issue is the lack of human-to-human interaction and involvement, which has inevitably led to the lack of quality and transparency of placements and results. Joe Mohen, a digital media entrepreneur, shared his concerns about RTB in an AdAge article he authored. According to Mohen, “RTB is not a suitable technology for premium advertising, nor is it positioned to ever become so. Any large or mid-size premium web publisher would be out of his mind to replace his ad-sales force with programmatic.”
Mohen’s sentiment rings true for small publishers as well. ADamigo, the fourth largest Hispanic network serving the U.S. market, works with a multitude of such publishers and has seen them run into serious issues with RTB. Consider this example:
In 2014, ADamigo partnered with a thriving technology website that was keen on moving its display inventory to RTB. ADamigo helped them make the switch by setting them up with an affiliate network and running inventory solely via RTB. Out of the 460,000 impressions delivered, the publisher only made $78.51, an average of 17 cents on the dollar. Had the publisher ran with their original direct display campaign where the CPM price was fixed at $3.00, they could have racked in at least $1,380, a whopping 1,687% change in profit on the campaign.
Even more telling are the results from Adobe’s 2015 Digital Trends Report. Brands across a variety of industries are still grappling with ROI and measurement of digital ad spend. In fact, about 59 percent struggle with their organization’s ability to measure the return on digital ad spend.
So, what’s the solution? An emerging trend is actually not a trend at all, but a hybrid approach to digital advertising. Without a doubt automation will continue to evolve, but it’s hard to believe that the current issues with fraudulent data, inaccuracies in targeting, and lack of insight into ad placements can all be solved with an automated approach. More importantly, consumers are now demanding ads that are relevant to their needs and interests. A recent Yahoo study found that 78 percent of consumers expressed a desire for some kind of content personalization, yet only 37 percent have found online desktop ads relevant to their interests. Mobile advertisers actually fared worse, with 30 percent of consumers responding they felt ads on their smartphone were relevant, and just 27 percent of mobile ads resonated with users.
Couple Yahoo’s findings with new research on the projected growth of digital advertising at the local level, and the solution becomes more apparent. A recent report from Borrell Associates anticipates that digital advertising at the local level will grow 42 percent this year.
A direct, brand-safe approach feeds into both of these market demands – a personalized approach to consumer targeting, and increased investment in local. By (re)establishing direct relationships between brands and publishers, companies can ensure that their ads are reaching the right consumers, at the right time, with the right message. For mid-to-small size publishers, and those serving the Hispanic market, RTB doesn’t provide them with a viable solution to do any of that. For these publishers, what’s truly imperative is reaching their target audience – even if the impressions are lower than industry standard at 500,000 impressions.
More importantly, a direct, brand-safe approach shines a light on how a brand’s ads are performing, what tweaks, if any, need to be made, and how and where they should be investing dollars; while publishers are able to advise brands on the performance of their campaigns and keep communication fluid, ensuring that updates can be made in real-time versus after the fact.
As with everything, human-to-human interaction is irreplaceable. By developing an open dialogue between each other, brands, publishers, and consumers benefit from a direct, brand-safe approach.
About Juan Cardenas and ADamigo
Juan Cardenas is the founder of ADamigo.
ADamigo is the fourth-largest Hispanic network serving the United States advertising market. The ADamigo platform offers premium tools for publishers to market and sell their available advertising space in real-time, while allowing advertisers to easily find the right advertising arena available that serves their target audience, and seamlessly purchase the space. To learn more, visit www.ADamigo.com