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3 Key Takeaways From Programmatic I/O San Francisco

Last week I was in San Francisco with all the ad tech world giants at AdExchanger’s Programmatic I/O summit. With rooms packed to capacity brand representatives and industry experts went head-to-head discussing the latest trends and issues facing the programmatic industry today.

According to a recent joint ANA and Forrester survey on programmatic, 79% of marketers made ad buys programmatically in the past year, more than twice the amount from 2014. While this growth shows increasing confidence in the technology, there are certainly still issues that marketers are concerned about, especially viewability and ad fraud. Other key topics addressed in-depth included the nature of header bidding and the direction of programmatic TV.

Here are my top three takeaways from the event:

Viewability

“I absolutely resent the fact I have to pay more for viewability. I wish I could have a refund for the last 10 years on the agency side for all of the media that ran that was not viewable” said Jim Kiszka, Kellogg’s senior manager of digital media. The boldness of this statement reflects the frustration that many other brands have when it comes to buying ads digitally.

Kiska went on to explain that his main issue is that in order to exceed the IAB’s viewability standard of 50% of an ad displayed on a screen for more than a second, brands are having to pay more. Kishka declared that the industry was built on a 50% viewability average. Meanwhile according to eMarketer the average viewability rate on desktop still hovers at around 48%.

Viewability is widely considered a metric when many people believe that it should be a standard.  However, in order for this shift to happen publishers need to rethink their websites completely in a way that would allow them to improve the quality of ad inventory available and be able to report on the status of that inventory. Others are beginning to consider new ways of selling ads based on engagement metrics, including the amount of time the ad was viewed and the actions took including reading, sharing, or commenting on. Considering that viewability has been difficult to prove, therefore a key concern for marketers, across all mediums it’s likely going to be an ongoing conversation with no one-fits-all solution.

Header bidding

Many players in the ad tech world are still trying to wrap their heads around what header bidding actually means. Essentially it allows publishers to offer the same inventory to multiple ad exchanges simultaneously before connecting to their ad servers rather than progressing down the sales funnel, keeping their prices higher. The biggest issue with this is that it reduces page loading times, which has contributed to the advent of ad blocking.

In a bid to reduce header bidding, Google recently opened up their First Look beta to publishers, essentially allowing for the same process to happen but server-to-server instead of the client-side header bidding, which should reduce page load times.

Programmatic TV

According to Magna Global, traditional television ad sales are expected to decline this year. Digital will overtake TV as the top advertising category in 2016, raking in $68 billion in sales compared to $66 billion for TV. This is a sign of the times, but as more and more people watch content online and smart televisions come to the forefront, there is a massive opportunity for marketers to get their message out to larger audiences, and media plans need to start reflecting this new reality.

One obstacle to programmatic TV advertising is the price-tag: geo-based targeting comes with a price tag typically three to five times higher than traditional TV. For larger brands such as Coca-Cola with a global presence this sort of advertising simply doesn’t make sense, while it’s out of reach for many smaller advertisers.

One of the hot topics at Programmatic I/O is the FCC consideration to allow users to choose which cable set-top box they decide to use, which would dictate the maker of that box, allowing the user to see ads based on their own service.

Meanwhile certain smart television makers are including technology in their television sets that allow them to recognize content being viewed through audio or visual output, regardless of the input device, essentially cutting out the cable companies altogether.

It’s a brave new world for the ad tech industry, and we’re only on the cusp of it.