Quality Data Will Drive the Advanced Advertising Revolution

The automated buying and selling of media inventory ("programmatic media") is creating a revolution in advertising. From 2013 to 2015, according to eMarketer estimates, programmatic ad spending in digital display has skyrocketed from about a quarter (24%) of the total digital display ad spend in the U.S. to slightly more than half (55%). From 2013 to 2015 (also according to eMarketer), programmatic digital video ad spending in the U.S. has risen from just 5% in 2013 to 28% in 2015, and it is expected to hit 40% in 2016. Magna Global expects programmatic digital display and video to reach $14.2 billion worldwide ($7.7 billion in the U.S.) this year and $36.8 billion (i.e., 50% of the total digital display and video spend) worldwide by 2019. The next steps in the advanced advertising revolution will be over-the-top (OTT) media and, ultimately, linear TV. In fact, while still in its infancy, the shift to programmatic TV has already begun. Magna Global has projected programmatic TV spending to reach 4% ($2.5 billion) of U.S. TV budgets in 2015 and 17% ($10 billion) by 2019.

Major challenges have emerged. Viewability has been a big issue for years. It first came to the fore in 2012 when comScore released its "vCE Charter Study," which found that 31% of digital display ad impressions were not viewable upon delivery. Since then, the Media Rating Council (MRC) and the Interactive Advertising Bureau (IAB) have worked diligently to develop standards with the aim of 100% viewability. Currently, the guidelines set the campaign viewability threshold at 70%.

Perhaps a more serious issue is that of fraudulent impressions--which occur when ads are served to bots. Studies have shown that bot fraud happens most often on small publisher sites that rely on compound data integrations instead of more direct relationships with customers and consumers. The digital advertising security firm White Ops, in partnership with the publisher trade organization Digital Content Next (DCN), released a study in September. It found that premium publishers saw a significantly lower bot fraud rate (3%) than the 11% seen across a broad array of smaller sites. Kevin Conroy, chief data officer at Univision (a DCN member), explains, "there's more than $6 billion being spent on invalid traffic. It's time to redirect that spending towards actual human beings who buy things. Bots don't buy our advertisers' products."

The key to eliminating bot fraud and attaining 100% viewability is data quality. A white paper from the Coalition for Innovative Media Measurement (CIMM) addressed concerns regarding data quality issues that emerged as a result of programmatic media. These include the accuracy of modeled consumer segments, transparency of modeling methodologies, compound data integrations, and data harmonization. Addressing these challenges is not only critical due to issues such as bot fraud and viewability, but also because of poor data quality or outdated data, as well as inaccurate matching or modeling, which can result in incorrectly targeted ads. The CIMM paper set forth guidelines urging end users of data to request disclosure and transparency regarding data sources and modeling techniques from potential data partners. In doing so, CIMM hopes to empower end users of data to make more informed decisions regarding data products and services and eventually to develop standards and requirements.

In addition to requesting full disclosure and transparency from data partners, enterprises should seek to develop direct relationships with their customers and audiences. They must strive to know more about their audiences and customers than anyone else, rather than relying solely on second-party and third-party data aggregators. The information derived from these relationships could be leveraged to ensure quality and accuracy in targeting ad inventory. Automation is only a piece of the advanced advertising puzzle. Quality data is what holds the pieces together. By developing these direct consumer relationships and building robust and well-rounded first-party datasets, enterprises can be better positioned to capitalize on the opportunities afforded by the advanced advertising revolution.