Stop Wasting Your Programmatic Ad Spend

By Jacqui Wallis On May 3, 2019

Programmatic is held up as the savior of marketing efficiency and is undeniably a useful addition to the marketer’s toolkit. But when poorly executed it can have an adverse effect on efficiency.

Almost £5.7 billion will be spent on programmatic display ads this year, nearly 90% of UK display, but just because this spend will be deployed via programmatic channels doesn’t automatically mean it will not be wasteful. Waste is likely to come from various sources. Budget will be misspent on excessive retargeting. It will be lost on inaccurate or out-of-date audience segments. And it will be wasted advertising to consumers when they simply aren’t in the right mindset to engage.

In addition to wasting ad budgets, all these factors damage consumer experience and reduce trust in advertising. Joint ISBA and Advertising Association research shows public trust in advertising declined from around 50% in the 1990s to just 25% today. This trend desperately needs reversing.

Rebuild Trust Through Respectful Advertising

One of the biggest causes of waste in programmatic is ad bombardment and excessive retargeting. No consumer wants a constant barrage of sales messages, particularly when those messages don’t take into account the environment in which they are served.

By continually targeting and retargeting a limited pool of consumers, marketers are both wasting ad spend and potentially damaging their brand equity. Brands exert a huge amount of time and effort building positive consumer relationships, but these are quickly eroded by this type of continuous retargeting and ad bombardment.

In addition to throwing away budget repetitively and ineffectively advertising to the same people, marketers are also suffering from “opportunity cost” wasting the chance to serve those ads to new audiences in unique and relevant environments. These prospects would be far more receptive to brand messaging and more likely to respond positively.

Marketers must stop hammering the same group of consumers with repetitive ads. Instead, they need a different, more respectful approach. They need a way to reach new audiences with relevant messaging based on real-time context, while those audiences are consuming unique, brand-safe content.

ISBA recently announced a framework with five actions the industry must take to rebuild trust in advertising. A more respectful advertising approach supports the first two of those actions: to reduce bombardment and to reduce the excessive frequency and retargeting.

Reach Real People Based on In-The-Moment Needs

The over-reliance of digital advertising on pre-defined audiences and frequently inaccurate or out-of-date targeting segments, is a key contributor to programmatic waste. Humans are, by nature, unpredictable and inconsistent. Our purchasing decisions are erratic, influenced by countless factors both practical and emotional. And our needs change by the day if not the hour.

Yet the premise of online targeting is to pigeonhole consumers in rigid audience segments based on their historic buying or browsing behavior — predicated on the fact their behavior will stay only within these predefined lines. They are then repeatedly served ads for products and services they already have or are no longer interested in. When this practice is replicated at scale it is incredibly wasteful as well as irritating.

Instead of using pre-defined user segments as proxies for the right audience, marketers would be better served by responding to consumers’ in-the-moment needs. A major strength of digital is its live, real-time nature so instead of repeatedly revisiting past actions marketers should build and optimize ad campaigns around immediate contexts.

Marketers can understand what content is most effective at driving engagement at any particular point in time, and then find similar environments in which to advertise. This strategy enables them to reach consumers based on what they want right now, not what they wanted last week or last year. It allows them to change their message and adapt their communications. The optimum advertising environment changes on a daily basis for each individual brand or campaign. And through the use of Artificial Intelligence, marketers can continually find the right content and, by extension, the right people, making better use of their programmatic spend.

Find Consumers in the Right Mindset to Engage

Programmatic advertising might reach the right person with the right message, but if they’re not in the right frame of mind to engage the opportunity is wasted along with the ad spend.

Digital content creates different moods for the people reading or viewing it, and some contexts will naturally inspire more receptivity and engagement than others. Reaching consumers when they are in the right mindset is the most effective way to cut through the digital noise. But as mood is fleeting, tapping into the most appropriate moment in time to identify the best mindset of your audience has to be a perpetual process.

By using this approach, marketers can use techniques that continually weigh up different environments where ads could appear and then select the most effective. They can limit programmatic waste by serving ads to people in the right mindset, who are more likely to be receptive and to respond positively. This approach allows marketers to build strong, relevant relationships with new audiences.

In order to thrive, programmatic must be used in a more respectful, less wasteful way. By targeting receptive new audiences based on their in-the-moment context and mindset, rather than continually bombarding pre-defined segments based on historical actions, marketers can fulfill the promise of programmatic.