GLOBAL: More and more advertising money is being poured into programmatic buying but a majority of advertisers understand little or nothing about how it works, a new study claims.
A collaborative research project led by Circle Research, in association with AppNexus, Warc, DDMAlliance, IAB Singapore and IAB Australia, surveyed more than 1,200 advertising professionals across three continents. Respondents were working in agencies, publishers and ad tech companies and collectively responsible for more than $100bn of advertising spend annually.
The resulting report – Reaching full potential: Examining attitudes towards programmatic across the global advertising ecosystem – said that nearly half of the ecosystem (44%) understands little or nothing about how programmatic works. This was particularly true of advertisers (63%), although there were also significant levels of ignorance among agencies (48%) and publishers (47%).
Even more astonishing, said the report, is that the lack of knowledge about programmatic runs concurrent with a high usage of it (67%).
And that figure may even be an underestimate. While less than half of advertisers (47%) and two-thirds of advertising agencies (64%) said they used programmatic, nearly all media buying agencies were doing so (92%).
"If the advertisers and agencies who claim not to be using programmatic are running campaigns via media buying agencies, could it be that their ads are being placed programmatically – and they simply don't know it?" the report asked.
This lack of understanding as to how programmatic works was cited by respondents as the most important challenge to overcome before advertisers can effectively adopt and wield the technology (47%).
That's because a lack of understanding reduces overall trust within the system while also making it harder to address everyday operational issues, such as meeting training needs or internal reporting.
There are also "phantom barriers" conjured up by sheer incomprehension – around one third of advertisers who have not yet adopted programmatic believe that a lack of budget is restraining them, even though programmatic is not a channel but a technology.
While it may require a reallocation of resources it doesn't need a separate budget, the report noted.
Data sourced from AppNexus; additional content by Warc staff