When It Comes To Biddable Inventory, Less Is More

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Jon Espejo, vice president of optimization at Accordant Media.

Programmatic has traditionally been labeled as a marketplace with near-limitless inventory, which to a certain degree is still true. However, 2017 has been a tumultuous year for some, and recurring brand safety issues on major platforms such as YouTube, and the resulting spending pullbacks from notable marketers, have become regular events.

In the wake of this and concerns over wasted media spending, more and more marketers are asking for close to 100% viewability and are not willing to pay for nonhuman traffic (NHT), while still demanding the same levels of performance, scale and reach. Unfortunately, these demands have an inverse correlation, which in turn will put pressure on the return on ad spend, leading to the inevitable question: What is most important?

A natural response to this is to look for high-quality inventory to serve as the core of your programmatic media plan. High-quality inventory has always been more expensive, but with many marketers now looking to buy the same inventory, pricing continues to increase, contributing to a situation where inventory is becoming more finite.

Balancing scale and brand safety can be difficult, especially for large marketers. Not every marketer can have a whitelist of 500 sites that consistently produce 80% of their performance. The notion of buying 100% viewability is false; I would strongly urge everyone to see it as a guide and not a requirement from serious platforms. Marketers should keep thorough track of both viewability and NHT, but they shouldn’t let it dictate their bidding strategy.

So how do you navigate these polarizing issues?

Asking The Right Questions

The industry is facing these issues around viewability and brand safety, to a large degree, because marketers are not asking the right questions. Instead of having brand safety and/or viewability dictate the programmatic strategy, marketers should examine which business KPIs their investments need to support and create campaign KPIs that lead to business results.

Concrete KPIs based on the profitability of the business should be the primary driver. Even for companies that typically don’t control their own sales channels, such as CPG and fashion brands, it is possible to set clear and measurable KPIs, thanks to the vast data landscape, which includes data inputs, such as past purchases and locations, that can result in measurable outputs such as sign-ups, sales or foot traffic.

Strong KPIs can serve as the foundation for proper viewability and NHT guidelines. Campaign KPIs with strong barriers to conversion decrease the viability of attributed impressions that are less viewable or likely fraudulent. In comparison, campaign KPIs with low barriers to conversion, such as clicks or home page visits, can be wrought with fraudulent activity or poor viewability.

The Recipe For Sophisticated Marketers

To fully take advantage of what programmatic has to offer, marketers need to fully understand the complexity of the marketplace and be comfortable with how they invest and operate their budgets. If they go in with the same recipe as everyone else, working from the same data sets as everyone else and asking for the same inventory as everyone else, they will need very deep pockets to win or just sustain a sizeable share of voice. Competing over impressions that are well known by competitors will naturally increase CPMs.

On the other hand, marketers should want to use insights that zig with competitors when need be, while zagging away from strategies employed by competitors to increase efficiencies. The first thing they need to do is take a long hard look at their own data.

Are they using it to its fullest? Are they using it to inform real-time bidding decisions at all? If the answer is no, then that may offer a clue about why CPMs are increasing without better results. By incorporating one’s own data into real-time decision-making, the competitive landscape changes substantially. And we’re not simply talking about retargeting. We’re talking about truly becoming a data-driven marketer.

If marketers also add robust analytics and reporting, multitouch attribution to determine which tactics, creatives and channels perform best and models like incrementality lift testing to weigh how programmatic investments affect the business, they will be far ahead of the curve. The best part about this is that they will quickly become smarter about the marketplace, their customers and their business.

When mindsets shift, it becomes possible to start focusing on efficiency, performance and what marketers actually buy, instead of focusing on scale and viewability. As soon as marketers’ bidding strategies are fueled by proprietary data and insights that no competitor can replicate, and they start measuring what matters from a business perspective, brand safety becomes easier to handle and navigate. Going down this path, marketers will be able to measure the cost per viewable conversion instead, while still ensuring the safety of their brands.

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This post was syndicated from Ad Exchanger.