When is programmatic advertising a good option?

4 concrete strategies for the programmatic advertising of tomorrow

Programmatic advertising offers extensive design options, but is also associated with a great deal of responsibility for the digital advertising ecosystem. So that programmatic does not degenerate into an end in itself, but can be effectively and holistically integrated into strategies, a focus on four approaches, which the BVDW represents.

Communication takes precedence over every approach

Sascha Dolling from OMD Hamburg is deputy chairman of the programmatic advertising focus group at BVDW. At the Morning Bash Roadshow, he explained in his lecture on the state of the market that the advertising industry has a responsibility to meet certain quality standards with programmatic advertising and to work transparently and effectively at the same time. To this end, Dolling discussed four specific strategies in the lecture:

  • Quality and transparency
  • Definitions and standards
  • new auction logics
  • a variety of information

Standardization: from code to initiative

In order to be able to demonstrate an established quality standard in the industry, certification is initially an option. The BVDW offers a quality certificate for programmatic advertising, for which agencies can qualify in two ways. On the one hand, you can have your technical competence certified for strategic consulting, and on the other hand, this is possible for operational campaign management. The certificate, which is valid for 24 months, can be requested here.

The BVDW's Code of Conduct Programmatic Advertising also defines specific standards. Above all, this code should offer transparency and security. So far, 31 companies have given a total of 49 signatures. Signatories include ECHTE LIEBE, QDivision, Google, Adform, Ligatus, Sizmek, the Burda Community Network, G + J Electronic Media Sales, etc.

The code is intended for DSPs, SSPs, data providers and now also advertisers themselves. Six categories and eight market areas expand the scope of the Code of Conduct. Thomas Duhr, Vice President of the BVDW, says:

With the expanded and revised Code of Conduct 2.0, the BVDW is once again setting a benchmark for more quality in digital advertising and a clear commitment to standardized procedures and processes in the field of programmatic advertising as well as high quality standards with simultaneous transparency. The adoption of the Code of Conduct in Austria (IAB Austria) and Switzerland (IAB Switzerland) as well as the interest of other European countries shows that the German market is on the right and absolutely necessary path here.

Eight criteria and 90 rules also apply to the DACH region, which strive for a standardized programmatic environment.

In addition, the BVDW also offers the Digital Trust Initiative, in which quality in digital marketing is certified across the board. Marketers, agencies and system providers must pay attention to three key points when signing:

  • User experience
  • verification
  • transparency

The Code of Conduct Programmatic Advertising must also be signed, the Better Ads Experience and LEAN Principles must be followed, and Invalid Traffic and Brand Safety must be focused.

Clear and new definitions are required

In order to be able to create cross-industry clarity with principles such as brand safety, Dolling said in his lecture, uniform, and in some cases new, definitions are required. He cites brand safety as an example. This term is currently afflicted with all kinds of emotion, which is why it needs a more well-founded definition. This is why the BVDW is divided into legal safety on the one hand and brand suitability on the other. The former clarifies whether campaigns actually comply with or violate the legal basis, while the latter can be used to check whether a campaign is in line with a specific brand perception and when risks of image loss could arise.

Dolling sees a similar problem with the term ad fraud.

In the industry, for example, you are always very quick with the term fraud. Someone feels betrayed and speaks directly of ad fraud. Often this is not a fraud. Fraud is a criminal offense, you go to jail for it!

Often, however, a clearer distinction must be made, which is why the term invalid traffic is introduced as a standard. In a similar way, bot traffic should also be viewed in a more differentiated manner. A distinction is made between good and bad traffic; So if on the one hand Google's crawlers are used, but on the other hand, authentic traffic is not generated.

Programmatic needs new auction logics

In addition to quality standards and specific definitions, the industry also needs new auction logics in particular. Explained at the panel of the Morning Bash HamburgZara Erismann from Index Exchange:

An SSP is no longer enough.

In fact, according to Dolling, publishers now use seven to eight SSPs to create a corresponding variety of offers. Header bidding in particular enables a better and more transparent view of the processes. Dolling was only able to outline the advantages and disadvantages of header bidding for various parties; but the BVDW provides an overview of this.

However, there is a problem with programmatic advertising in the context of the second price auction. This is because, in simple terms, significantly lower prices can be achieved for certain inventory if the second highest bidder clearly undercuts the first price. The target group with the higher value is not addressed in case of doubt. Another problem can then be that it may not be possible to address the ideal customer at all if a direct auction wins the bid instead.

In addition, transparency suffers from the second price. These points alone suggest that First Price is the better auction logic for the future programmatic. However, there is still work to be done here. The model offers more transparency and optimized inventory access. But control and differentiation are still difficult, and the effort is very great, according to Dolling.

However, it is already possible to modify in OpenRTB which type of auctions should be taken into account when buying, for example. However, there should also be automated processes for this in the future.

Last but not least: communication and information are decisive

Technological and framework conditions are essential for the development of successful, qualitative and transparent programmatic advertising. But all these aspects, from the Code of Conduct to the desired first price auction, can only bear fruit if they are communicated comprehensively and in a variety of ways.

That is why the BVDW is focusing on events with the Let's Talk After Work Sessions that discuss developments and trends with expertise. In addition, the BVDW's programmatic advertising focus group is constantly providing fresh content with the Expert Talk. Currently, for example, Daniel Skodas (Adlicious) information: "Why programmatic advertising specialists should train the next generation".

A new, updated whitepaper on the trending topic of header bidding will also be published this year and the topic of data-driven creativity will be examined more comprehensively.

Programmatic advertising can be based on these four important pillars and must grow accordingly. Header bidding will probably be further standardized in the future, while transparency remains the central factor. It requires a relationship of trust and good cooperation between the players in the market. Then, thanks to open ID solutions and the like, a common addressing in the market can be taken into account.

Programmatic isn't a revolution, it's an evolution

means Robert Kramer by AppNexus. In order for it to be satisfied, it is important for marketers and publishers to work on all four key points and stick to them.

OnlineMarketing.de is the organizer of the Morning Bash in cooperation with Index Exchange. The event is currently on a roadshow and, after Hamburg and Cologne, is still taking place in Berlin today.