It’s called “programmatic advertising.” Maybe you aren’t familiar with the term, but it’s how most of the ads you see online are bought today.
What is it? Very simply, “programmatic” is buying digital advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them. Advertisers decide how many impressions they want to buy, what kind of audience they want to reach, and how much they are willing to pay for them. Publishers and media outlets are then paired up with advertisers through programmatic platforms which use a sort of “bidding algorithm” to sell ad inventory.
If you’ve ever bought ads on Google, Facebook, LinkedIn or YouTube, you’ve used a “programmatic” system. Some platforms, like Facebook, only show the ads you buy on their website. Other programmatic systems, like Google, allow an advertiser to run ads on hundreds — possibly thousands — of websites all at once. This is what makes programmatic ad buying so attractive. In the old days, you’d have to go to each of these media outlets one by one to figure out who their audience is and how much their ads cost. But with programmatic, you can just “buy the audience” with a single click of a button — age, gender, social standing, geographic market(s), etc.
The ease, simplicity and reach of programmatic ad buying has made it wildly popular. This year marketers will spend 65% of their advertising budgets on programmatic — up a whopping 19% over 12 months — and it’s forecast to represent 86% of all digital ad spending by 2020.
But programmatic advertising is not without its downside.
New research findings underscore the branding risks of programmatic digital ad purchasing. This is especially true for larger financial brands that advertise so broadly that it’s difficult — if not impossible — for humans to police the content where the bank’s ads appear.
The study, fielded by CHEQ in conjunction with Magna and IPG Media Lab, found that many consumers — like many marketers — don’t understand what “programmatic ad buying” is or how most ads are placed online today. The study revealed that consumers perceive the placement of digital ads on “unsafe” sites and channels as an intentional endorsement of negative content.
A cross-section of comments from survey participants reveal the poor impression people have when they see an ad juxtaposed next to content they find objectionable:
- “The advertiser is stating that they agree with the negative content.”
- “Looks like they’re exploiting shock value.”
- “I think the brand is taking advantage of people’s emotions.”
- “This seems manipulative. I’d prefer a company that doesn’t use that kind of technique.”
- “It’s disturbing that they are generating revenue through disaster.”
Reality Check: Just because you get your ads in front of the audience you’re targeting and at the right price doesn’t mean it’s the right thing for your brand. For every advertiser, there will be some articles, videos and websites you don’t want your brand associated with. This is why airlines pull their ads when there has been a plane crash, and why some advertisers pull their ads from politically-charged cable news networks like Fox News and MSNBC.
“Years of reputation building can go down the drain with just a few negative ad placements.”
“Ad verification solutions have focused primarily on reporting brand-safety violations after they have occurred, rather than preventing them in real-time,” said Guy Tytunovich, CEO and founder of CHEQ. “This means that advertisers are still, repeatedly, on display alongside potentially damaging content. Years of reputation building can go down the drain with just a few negative ad placements.”
“Once the consumer has viewed ads alongside unsafe content,” the study report states, “the damage to the brand is already done.”
The Wrong Placement Can Kill Any Ad
90% of what brands spend on digital advertising gets wasted before poor placement undermines it, according to research from the American Association of Advertising Agencies. The study found that only 13% trust social media advertising, and a paltry 9% of consumers trust brands’ banner ads. Consumers see TV commercials as the most trust-worthy, although one in three respondents say they don’t trust any advertising.
For financial marketers, the news gets worse. Among 11 industries studied, advertising by financial companies was trusted least — by a mere 12% of the sample. By comparison, grocery stores topped the list at 49%.
With consumers’ opinions of online advertising from banking providers already low, running an ad next to the wrong content is a sure-fire recipe for disaster.
In the CHEQ study, “objectionable material” that can taint a financial brand’s digital advertising falls into one or more of the following categories: violent, offensive, disgusting, disrespectful, hateful, tragic, criminal, controversial, fake or misleading, politically sensitive, and brand averse. One example of “brand averse” is the portrayal of something negative about the brand, such as an ad for Wells Fargo appearing next to a news story about Wells Fargo paying fines for opening fraudulent accounts.
Even neutral content can be a risk at times. The CHEQ study made the point that a brand can suffer damage if consumers perceive that the content clashes with the brand. One example cited would be advertising sugar-sweetened soda in a commercial running just ahead of a video about diabetes.
Of course the very notion of “objectionable material” is all highly subjective — “one man’s trash is another man’s treasure,” as the expression goes. What may be “offensive” to a 58-year old widow in Iowa could be considered “entertainment” to a 23-year old man living in Los Angeles.
Consumers Make Brands Pay a Heavy Price
“The problem will only get worse as more and more subjects become taboo, and as political and social sensitivities grow.”
Awareness and concern about unintended consequences of programmatic digital advertising selections have been growing since a shocking report revealed that ads from major brands were unexpectedly juxtaposed with videos posted by terrorist groups.
People participating in CHEQ’s study frequently indicated they would take action against advertisers for supposedly supporting such inappropriate content. The consequences for such offenses are dire:
- Perception of brand quality drops by 7x
- Intent to purchase falls by factor of 2x
- Likelihood to recommend the brand falls by 50%
- Feeling that the brand doesn’t about the consumer falls increases 4.5x
- Perceptions that the brand is clueless rise by a factor of 3x
- Willingness to associate with the brand falls by factor of 2.8x
According to CHEQ, the problems with programmatic ad buying will only get worse as more and more subjects become taboo, and as political and social sensitivities continue to grow.
Such developments have spurred banks like JPMorgan Chase to drastically cut the number of sites where it runs ads while simultaneously increasing the level of human oversight and intervention. And in early 2018, Bank of America announced that it would appoint a “brand safety officer” to more directly supervise matters involving digital advertising spending, in order to avoid such unintentional gaffes.
Taking Steps Against Programmatic Advertising Risks
According to a study fielded by a GumGum, a marketing analytics company, marketers’ ads have been found near all manner of brand-unsafe content, typically as a result of programmatic buying:
- 39% – Bad news, disasters, tragedies
- 39% – Divisive politics
- 26% – Hate speech
- 21% – Vulgar language
- 18% – Violence
- 7% – Pornography
As a result, nearly half of all brands have seen some sort of social media blowback due to a brand safety incident, while one in four have seen negative press. One in seven said they could track actual lost revenue.
GumGum’s report set out six strategies brands can use to tweak programmatic buying:
- Keyword Detection — This filters out content involving matters the brand doesn’t want to appear with.
- Blacklists — Put together by humans, this overrides picks that the programmatic approach would otherwise make based on its parameters.
- Whitelists — Likewise selected by humans, this preapproves certain sites that are deemed acceptable.
- Image Recognition Technology — This is a leading-edge tool that uses artificial intelligence to go a step beyond screening by content text. This reviews sites for pictures that could pose brand safety issues.
- Third-Party Solutions — These monitor ad placements and help brands tweak the parameters governing their buys.
- Direct Purchases from Publishers — This is a return to old-school ad purchasing, which may not be entirely risk-free either.
According to GumGum, only a few brands have recently began employing technology to help them avoid brand safety issues. In their survey, 45% of respondents said they had been doing so for less than a year, while 15% hadn’t tried any tech to address the problem.
GumGum’s survey found that six out of ten brands and agencies blacklist sites or whitelist acceptable sites in their programmatic mix. But protecting your bank or credit union from the risks of programmatic ad buying involves a tradeoff — cutting back on where the ads appear can mean fewer eyeballs.