The increasingly automated, high-volume nature of programmatic trading makes for logical comparison with activities that have ruled stock markets around the world for many years. If you will forgive a continuation of that analogy, it is not a wild leap to suggest some of the lessons learned in the financial markets may also translate from equities to advertising inventory.
Overcoming the urge to enjoy the film The Wolf of Wall Street a second time, a more valuable education may emerge from one of the street’s more celebrated success stories. What can Warren Buffett’s thoughts on investing teach us about effectively distributing advertising budgets?
“Rule number one is never lose money. Rule number two is never forget rule number one”
No marketer willingly throws away money, and while honest mistakes occur, a more fundamental issue is paying for invalid traffic (IVT) and fraud, generating ad impressions that have no opportunity to be seen by human eyes.
With tools now at advertisers’ disposal, the detection and removal of IVT is manageable for both publishers and advertisers. Ensuring that as much budget as possible is translated into legitimate impressions is an advertising equivalent of this golden rule.
A second consideration, once ads are being served to real humans, is taking steps to comply with viewability standards. After all, an ad that cannot be seen cannot do its job, and again money is lost at source. While measurement and validation do require some investment, we see time and again that subsequent gains in sales per impression offset this cost.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”
A shift to buying audiences rather than direct inventory has implications for control of where advertising appears. Although many risks of early blind networks have been mitigated, the fact remains that some spots might be deemed unsuitable for a particular brand – this includes more subtle issues such as awkward juxtapositions between news article content and brands featured on the page.
The sophistication of modern technology extends beyond avoiding wholly undesirable inventory, and advertisers are able to be nuanced about what could harm their brand. Avoiding certain types of sites, or even specific content within ostensibly ‘brand safe’ inventory is increasingly important in a world when one misplaced ad can be shared on social media for possibly serious reputational damage.
“Risk comes from not knowing what you’re doing”, or “Never invest in a business you can’t understand”
Understanding what you are buying (and verifying what you got) has never been more applicable than in the more commoditised world of programmatic platforms. The ability to bid on inventory and audiences places new responsibilities on all sides of the ecosystem to be transparent and accountable. Third-party verification for IVT, viewability, brand safety and even audiences is another tool in the digital marketer’s playbook that can help ensure purchases suit the needs of their campaigns.
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down”
I am not certain my publisher friends would welcome the idea of their inventory being “marked down”, but the message about quality assessment is important for media buyers and sellers.
The ability to quantify inventory (in terms of the medium and the audience it can deliver) allows media owners with a truly premium offering to market (and charge for) it as such.
Publishers’ “merchandise” can now extend beyond simple inventory sales, with the identification of granular audiences allowing packages of context and consumers to be offered to commercial partners.
For advertisers, merging content and premium inventory into bespoke buys can represent quality merchandise and additional performance from their outlay. The ability to target bespoke, desirable audiences wherever they appear within less competitive areas of trusted publishers’ sites can represent excellent value.
“It is not necessary to do extraordinary things to get extraordinary results”
Perhaps one of the larger threats to all of the above is that advertising evaluation can seem a little dry. A box-ticking exercise. This is exacerbated by the intricacies of what different providers measure (are all browser tabs measured, or only the active one? and so on) – it can seem a real headache.
Although it is understandable that modern marketers have many additional considerations, we already have numerous cases demonstrating the improvements to campaign performance and return on investment generated by more stringent application of IVT removal, view ability optimisation, audience validation and brand safety measures. Adhering to these investment fundamentals in programmatic trading generates results that marketers and their bosses will find exciting.