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Ad Agencies Still Unclear about Programmatic Buying

By Joy Baer March 10, 2014 | 2:24pm

STRATA’s most recent quarterly agency survey found an interesting and pervasive sentiment among ad agencies and their approach to programmatic buying. Very few of the agencies we surveyed said they actually trust programmatic buying, while many more don’t trust it or aren’t using it at all. A key takeaway is that the industry has a long way to go in understanding programmatic buying and there’s a lot of noise surrounding the process.

Here’s what we found:

37% of agencies say they are undecided about if they trust programmatic buying to properly or accurately execute their ad orders.

Only 6% said they did trust programmatic, while 46% say they don’t use programmatic.

While many smaller agencies outsource their Digital buying and could affect these numbers, perhaps the mistrust around programmatic buying also revolves around the industry’s fragmented definition of what programmatic buying actually is:

58% say that the ad industry doesn’t have an accurate, unified definition of programmatic buying.

Less than a third of agencies will only carry out 10-20% of their Digital business with programmatic buying. 

57% said they wouldn’t use it to carry out their Digital business.

While programmatic isn’t necessarily a new trend, STRATA clients certainly aren’t alone in their expectations for a more transparent and unified definition of programmatic buying. The advertising industry as a whole has not come to an agreement about this terminology. AdWeek ran an interesting piece in November that highlighted the industry’s various definitions of programmatic buying:

“Programmatic is a catch-all term that many people are using to categorize everything from behavioral and intent-based targeting to real-time bidding and exchange-based buying of inventory,” says Peter Naylor, former evp at NBCUniversal. “Programmatic is advertising’s newer, better mousetrap.”

The article also noted that as programmatic became more popular, it’s definition became more fragmented:  

It is a term that has grown in usage—and led to much confusion. “Programmatic started off as a more acceptable synonym to RTB,” says Andy Atherton, svp at AppNexus. “Now folks are trying to apply programmatic to different things. If you’re a TV guy, you’re not up to the minute on this, [and] it’s probably very confusing. It’s this problem we’ve created for ourselves.”

And if you ask five different ad executives to define programmatic buying, you’ll get five different answers, which is exactly what AdExchanger showed in their earlier piece.

Various experts have suggested that the ad industry needs some form of standardization so the full efficiency of programmatic can be unleashed. Forrester analyst Jim Nail just published a whitepaper making that exact argument last month. 

Multiple parties need to come together to make programmatic buying work for everyone in a trustworthy and transparent manner. Ad sellers need to recognize the hesitation among many in the industry, while agencies should be more vocal on their concerns about the programmatic process. As a whole, the industry needs to tone down any hype around certain buzz words – programmatic being one of them – so we can come to a focused unified industry definition of what programmatic buying is and how we should use it.  

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