Brands double programmatic investment

5 September 2014

BRUSSELS: The biggest spending marketers in the world have doubled their investment in programmatic platforms over the past year, according to a new survey from the World Federation of Advertisers (WFA), which has also released programmatic trading guidelines.

Based on responses from 43 of the largest brand advertisers, which account for a combined adspend of $35bn, the WFA survey found about 10% of their total digital media investment now goes through programmatic channels, and 44% of that is targeted at online display.

Respondents also expect programmatic to increase its share of their digital budgets over the coming year, with 83% believing video will be a significant growth area and 77% predicting rises in mobile activity.

However, the survey revealed that brands are increasingly switching their programmatic budgets to independent trading desks at the expense of agency trading desks, Marketing Week reported.

Their use of agency trading desks declined 15% over the year to 69% while the use of independent trading desks, or demand-side platforms, more than tripled from 8% last year to 29% in 2014. Just 2% have tried or tested an in-house solution.

It also emerged that none of the respondents are "completely satisfied" with agency trading desks, half are concerned about the way data is captured and used, while 85% believe ad misplacement remains a concern.

Meanwhile, 64% do not think it is acceptable for trading desks to engage in "arbitrage", the practice whereby ad impressions are sold on to the advertiser, sometimes leaving them suspicious about whether they have been bought at marked-up prices.

"While it might be argued that arbitrage is acceptable if clients are getting improved results and value from their media compared with the traditional way of trading, in reality, very few advertisers see it this way," said report author Mikko Kotila, in comments reported by The Drum.

In order to allay advertisers' concerns about such issues – and also to help them improve their return on investment in programmatic trading – the WFA released new guidance, outlining some steps they can take to ensure their experience of programmatic is both efficient and effective.

These include talking with their trading desk to establish clear understanding, gaining ownership of media investment data, and making better use of insights from audience data.

Data sourced from WFA, Marketing Week, The Drum; additional content by Warc staff