1 Programmatic Advertising Mistake: Doing it

There you go. No need to read further, you have the answer. Obviously you are going to read on a bit further because you had an interest in the headline – 1 Programmatic Advertising Mistake.

In order to comprehend  programmatic advertising you are going to need to have at the very least a rudimentary understanding of how it works. In reality though it’s about one thousand times more complex than this diagram indicates.

Advertiser

You

DSP

Demand-side Platform (DSP) is software that helps automate the buying of advertising.

Ad Exchange

A software platform that allows advertisers and publishers to buy and sell advertising from one or multiple ad networks.

SSP

Supply-side Platform (SSP) is software that helps automate the buying of advertising.

Website

It’s estimated that currently between 70 and 90% of online advertising is transacted programmatically. The system is so complex, it is essentially incomprehensible and beyond the time we have here in this very short post.

At each step of programmatic advertising someone is taking a piece of your ad pound

It’s a sad state of affairs that you will never know how much of your budget is being siphoned off. It’s estimated around 50% which should be a very alarming amount to any business.

Underlying the system is a process named real-time bidding (RTB) that allows multiple advertisers to simultaneously bid on the same website ad slot as soon as a visitor arrives. An AI driven online auction takes place in nanoseconds. The highest bid wins the auction, and their ad is placed in the slot and, at least in theory, delivered.

A sign in the Financial Times

For those of you who like data and stats. According to the Financial Times, of the 50% of the budget that was siphoned off, about 1/3 of the dollars, “were completely untraceable.” In some cases the untraceable costs were as high as 83%. This means the money just evaporated without a trace or the advertiser’s knowledge. Only 12% of the ad pounds were completely transparent and traceable. An astounding 88% of pounds could not be traced from end to end.

Good luck! In my opinion you should start using agile thinking instead.

1 Programmatic Advertising Mistake is to Continue

I am afraid this is another short post, because I really cannot spend anymore time on the folly of online advertising. If it is consistently working for your business then I congratulate you for your brief moment of success. However you should be prepared for predictable cost rise and returns fall. It’s how the system works.

You know what to do now, right?

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1 Programmatic Advertising Mistake