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Why Programmatic Ad Buying Might Not Be the Right Strategy For Your Ecommerce Brand

By Ryan Markman, COO, Metric Digital

At the risk of oversimplifying the multibillion dollar digital marketing industry, there are three ways to buy advertising on the internet:

  1. You can use giant platforms where consumers spend a lot of their time, like Facebook, Instagram and Google.
  2. You can go directly to a particular website that you want to advertise on and secure a particular ad inventory.
  3. You can use third party programmatic platforms, which aggregate ad inventory from a variety of websites and use technology to automate where your ads are placed.

Each of these approaches is an important part of the industry.

But as a performance marketing agency who has spent hundreds of millions of dollars buying ads for a diverse set of ecommerce brands, in our expert opinion, programmatic is a lower priority to drive performance than Facebook, Instagram, and Adwords.

We’re not bashing it. There is a place for programmatic in digital advertising. Especially if your company is looking for additional scale. It’s a key part of the market. However, ecommerce brands need to know what they’re getting into.

It may not be the right strategy.

When you hand over your creative to a programmatic company, a lot happens in between that moment, and when your ad actually gets posted on websites. Sadly, that activity is often completely invisible to the brand. There may be six or seven different programmatic vendors touching a the creative and passing it around like a toy, unbeknownst to you.

In fact, all of those six or seven middlemen take a margin that inflates the price you’re paying. As a result of this complex value chain, it’s hard to track where ads are actually showing up and how they’re performing. There is a lack of accountability due to a lack of transparency.

AdLightning said it best in their article about “bad ads.”

Display ads often start their journey from agency to audience with one or more quality issues. However, those issues are often compounded and new issues are introduced as the ad bounces around in the programmatic machine. And there are no quality checks along the way.

We’ve seen this happen far too many times.

When our agency first starts engaging with clients, either before a contract is signed or before the kickoff meeting, we go in and actually look at their data to see what was happening before they engaged us.

In many cases, clients will have used various programmatic platforms before us. And you wouldn’t believe if we told you, but...

We've seen situations where literally hundreds of thousands of dollars that brands didn’t know about were going into certain websites.

Companies were burning their ad budgets in the wrong channels.

It's unprofessional, it’s unethical and it’s unacceptable.

To reiterate, we believe there is a place for programmatic display. As we said, it’s an important part of the market. Particularly if your company is looking at budgets of several million in digital display advertising per year, and you’ve already reached the opportunity ceiling on Facebook and Instagram. In that case, programmatic might be the right strategy for you. Automating all of your media buying, placing and optimizing decisions can be a powerful strategy for brands of a certain size.

But for many ecommerce brands, before spending too much time or money evaluating your programmatic display opportunities, it’s smarter to focus on achieving excellence on Facebook and Adwords first. In our experience auditing and working with hundreds of brands of all sizes:

The vast majority of the time, Facebook and Adwords outperform programmatic.

There are already enough tech hurdles and manpower associated with running the technology and creative. But programmatic ad buys often come with additional costs and fees, both transparent and hidden. And while some drawbacks can be alleviated by going through a third party display network, which buy ad inventory from pretty much the same place, it’s still risky.

Just remember: When you lose transparency, you lose all control to optimize. 

Ryan Markman Chief Operating Officer, Metric Digital The Metric Digital Blog A Blog on All Things Digital Marketing