• by Jen Sargent , August 26, 2014

Programmatic advertising has gotten a lot of press recently. Many companies in the category are getting funded by VCs, and one has even become publicly traded. There are aspects of programmatic buying that are compelling, but many pitfalls exist, especially when it involves video programmatic buying in open exchanges.

Large and small publishers like Conde Nast, Forbes and Gawker have jumped into the fray of programmatic.  Advertisers too are quickly adopting programmatic buying -- but the question remains, is it working? Are ad campaigns more effective with programmatic? To me the jury is still out.

From my point of view as a publisher, programmatic buying can be risky for marketers and detrimental to publishers when not part of a direct exchange.  Specifically, I think it can devalue publisher inventory and create a back-door way for (otherwise direct) advertisers to get on your site, diminishing the importance of quality video content, site layout and brand.  For advertisers, it often does not achieve branding goals and risks aligning video ads in contextually irrelevant places. Also, I believe it can hurt the whole video industry in the long run.

There is no arguing that the 30-second video spot is an extremely effective branding tool. But video programmatic buying can be poison for the advertising industry when it is outside of private exchanges. Why? Because context matters. Brand matters. Where a video ad runs can be critical to a campaign’s success.  Ads need to reach the right audience, at the right time, in the right environment, but programmatic buying on open exchanges can increase the chance for marketers to be in the wrong environment.  Additionally, programmatic makes it difficult for advertisers to keep track of where their ads end up running, which means they can land on sites with fake traffic or out-of-view video players.

This happens plenty even when humans are involved in the process.  Consider the ill-timed travel ad running on the news story about a horrible plane crash.  Or, premium (e.g. luxury car) brands running on low-quality sites around click-bait content. When left up to technology, the opportunity is even greater for brands to be in the wrong context or environment, damaging the audience’s perception of the brand.

What about multiscreen advertising? Research shows that both dollars and eyeballs are shifting in this direction, yet by focusing heavily on programmatic (which has not fully caught up to what is possible with multiscreen/multiplatform advertising), advertisers might be missing out on critical eyeballs.

I understand why marketers like programmatic: it can offer a more efficient way to reach people wherever they are on the Web. But it can backfire.  It can be unnerving for a consumer to receive an ad when they are not expecting it or in an environment that is not appropriate.  As more video shifts to multiscreen, the potential for open exchanges to get it wrong increases.

For publishers, programmatic (outside of a private exchange that the publisher controls) devalues the brand. It basically says, your brand doesn’t matter. The quality of your content doesn’t matter. This incentivizes quality brands and publishers to put less emphasis on quality content.

When it comes to programmatic and video, we need to strive for a good middle ground for both marketers and publishers: one allowing brands to align with quality video content and publishers, while ensuring that they know where their ads will be running.