10 Reasons You Shouldn't Do Programmatic (And One Reason You Should)

Wondering where programmatic fits into your ad strategy?

I’ll let you in on a little secret: there’s a good chance it doesn’t fit in at all.

In this article, I’ll give you ten reasons you shouldn’t be using programmatic – and one reason you should.

What You’ll Learn:

10 reasons you shouldn’t do programmatic:
And the one reason you should try programmatic advertising

Often described as the “future of advertising,” programmatic advertising is a media-buying strategy that refers to the automated bidding and placement of online ads.

That said, programmatic isn’t an easy alternative to actually learning the ins and outs of traditional paid advertising.

You want to be careful when it comes to programmatic advertising. While the technology is promising, it’s not a magic bullet alternative to other forms of PPC like Google Ads, Facebook, LinkedIn, Bing, YouTube, and the rest.

With programmatic, you’ll attract a lot of traffic and a lot of new eyeballs but probably won’t see a very good return on investment.

With that in mind, I’ve put together a list of ten reasons not to do programmatic and one reason you might want to give it a try. Let’s take a look:

1. Your Ads Might Show Up in Some Odd Places

Because programmatic advertising is automated, marketers don’t have control over where their ads end up. So, you might find that you’re paying for placements that aren’t especially effective or they don’t quite line up with your target demographic.

On top of the risk of placement issues, automating the bidding process means that you aren’t guaranteed ad placement at all.

When it comes to programmatic RTB or real-time bidding, the auctions happen in real time. Meaning, there’s a possibility that your ad might not be delivered if you’ve based your bid on historical data. That added layer of unpredictability makes it hard for advertisers to justify the cost.

It’s worth pointing out that you can adjust your bid in real-time, thus increasing the chances that your ad will be displayed. That said, it also means that you need to be watching your account activity to jump on those opportunities.

2. Programmatic Might Not Be a Great Fit For New Businesses

We’ve gone over the importance of persona research, as well as how you can build out a paid media audience using Google’s Audience Report.

So, there’s no denying the power of a super-granular targeting strategy.

Programmatic, too, is an effective way to learn every detail about your audience. But new entrants may have a difficult time getting results from programmatic as they’re starting from scratch when it comes to their datasets.

Services like Facebook come with internal data, allowing brands to leverage the platform’s insights to connect with new audiences, while Google offers insights that delve deeper into audience patterns as they begin to emerge.

Programmatic advertising currently lacks the reporting tools and transparency that you’d find with other paid advertising opportunities–meaning new businesses miss out on an opportunity to learn more about their advertising efforts or why certain ad placements cost a certain amount.

3. You Don’t Have a Significant Budget for Ad Spend

Programmatic advertising can get pretty expensive, much more than say how much a small business might spend on Facebook or Google Ads.

Part of why programmatic is so expensive is it generally involves working with an outside vendor or a proprietary tool known as a DSP, or demand-side platform.

A DSP is an application that automates the media buying strategy across multiple channels. So, in the past, you’d have to contact a publication and pay for ad space, one-by-one.

How programmatic works. Image courtesy of Instapage

DSPs allow buyers to purchase placements in real time, through automated bidding.

Though prices are starting to drop, due to the wider availability of programmatic technology prospective advertisers need to negotiate terms ahead of time. Meaning, it’s not as easy to control your budget as it is on platforms like Google Ads or Facebook where you can pause campaigns or lower max bids as needed.

Often, DSPs charge a mark-up on ads, plus additional fees like the costs of required training sessions, onboarding, and more. What’s more, depending on the payment structure, you might be charged a flat rate for a certain amount of impressions or the vendor will require you to place minimum orders–which may or may not be out of your price range.

Upfront, you’ll need to understand exactly what you’ll be paying for before signing any contracts.

Finally, it’s also important to note that DSPs don’t actually purchase, resell, or own the ad inventory that you’ll be bidding on.

DSPs connect with something known as a Supply Side Platform (SSP), which allows publishers (who do own that ad space) to sell placements through a web-based application.

An SSP is actually quite similar to a DSP, the difference being the SSP represents the publisher side of the equation, automating the sale of ad impressions for media owners.

SSPs generally include Real-Time Bidding or RTB, which represents the automated buying and selling of impressions, awarding placement to the highest bidder.

But, again, programmatic ads are primarily used in an awareness campaign, meaning, you buy impressions, not conversions.

4. Programmatic Ads Have Been Known to Appear Next to Offensive Content

According to the CMO Council, a whopping 86% of customers are concerned about being redirected to offensive or hateful content.

Unfortunately, this has become an issue over the past few years, following several high-profile placements where ads were showing up next to content deemed undesirable.

Many programmatic vendors have begun to address this problem, working to create blacklists that allow advertisers to make sure their product isn’t being promoted on a site touting Pizzagate-style conspiracy theories or promoting gun violence, hate speech, or other forms of undesirable content.

If you do plan on starting a programmatic strategy, make sure you look out for vendors that place a strong emphasis on brand safety.

While they might “limit” your reach, a well-executed campaign, complete with brand safety controls shouldn’t impact the scalability of your campaign. And you can rest assured that your brand doesn’t get lumped into something deemed undesirable.

5. You Don’t Have Much Experience Running Display Ads

Display ads, if you’re unfamiliar, are ad placements designed to attract the audience of a website or social media platform to click through to a landing page. You might use display ads as part of a retargeting campaign or hope that your ad catches the eye of a new customer that matches your audience profile.

If you haven’t used display ads in the past or have little experience with the platform, you might want to hold off on using programmatic.

While the main benefit of programmatic comes from its ability to reach just about any customer or group imaginable, Google’s Display Network, or GDN, provides something similar, at a lower price point.

So, you may want to start with GDN to see what kind of results you’re getting with this type of campaign, first honing in on which people are most likely to take action based on shopping history, behaviors, interests, preferences, location, and more.

But if you’ve never used display ads in your marketing strategy, then you don’t have access to the data needed to run a successful programmatic campaign.

Programmatic networks will be able to tell you how your ads are working, but if you’re basing your audiences on past search ad performance or website visitors, you’re starting at the wrong baseline.

6. Programmatic Metrics May Be Limited

Most DSPs and programmatic vendors will offer some method for tracking ad performance, as well as audience insights. But, that’s not necessarily the case across every platform.

If you’re serious about diving into programmatic, you’ll need to make sure that the reporting tools help you track your goals using the metrics you need to measure these goals.

Unfortunately, some platforms don’t come with standard B2C metrics like detailed attribution and revenue tracking, so it may be hard for some marketers to track performance against their media spend.

According to Performance IN, nearly two-thirds of marketers report some difficulty reporting on programmatic display metrics, and many are holding back on ad spend as a result. Sure, you may be able to connect DSP metrics to your other reporting tools, but many marketers find this challenging.

7. Programmatic May Be Linked to Fake News

I don’t want to say outright that programmatic ads promote fake news, but there is a link between automated digital advertising and the spread of misinformation.

Many people believe that political campaigns and conspiracy theorists drive most fake news efforts, and fringe groups or groups looking to make money based on sensationalism and clickbait benefit from a programmatic advertising platform that rewards clicks over quality.

The New York Times ran a report on the role automated advertising plays in the spread of misinformation. And, even if your company isn’t creating fake news pieces, an appearance on a site with little regard for the truth could hurt your reputation.

A programmatic ad served by Google appeared on the homepage of Politifact, linking to a fake Vogue page

8. Low Click-Through Rates

Programmatic capitalizes on that brief moment in time it takes to capture someone’s attention. A company that wants to get in touch with women between 25 and 40 can target that demographic across several channels and regions based on when they are most likely to be online.

At that moment, when browsers are likely online, the automated bidding process kicks off. So, if a 32-year-old woman is online researching new winter coats, she might see an ad for coats. If she thinks it’s relevant, she might click the link and make a purchase.

If she clicks, the advertiser can review her activity after the click takes place. From there, the advertiser can review which pages she looked at and whether the CTA was effective or not.

If she doesn’t click, then the advertiser might then tweak the language of the offer or optimize the landing page.

The advertiser has higher chances of success when they link ads to a search action, versus relying on programmatic networks like Google Display Network, which presents ad content on the sidebar or footer of another site such as a media site, a blog, or a social network.

Typically, placements are determined based on where your target audience spends the most time online.

For example, if you’re a retailer that sells high-quality, sustainable leather shoes to a millennial audience, your ad might show on The Atlantic or a pop culture blog — based on that demographic overlap.

Programmatic is often cheaper than running CPM campaigns through Google Ads. But it’s not going to be your best option if the goal is generating click-throughs and conversions.

Programmatic often sees a lower CTR than traditional online advertising methods

Some studies have found that click-throughs on programmatic banner ads to be as low as 0.05%, which is pretty dismal, especially if you’re in e-commerce or are trying to generate leads for a long-term nurturing campaign.

Brand awareness campaigns have their place, but most industries choose to focus the bulk of their ad dollars on lead generation and sales, versus impressions, as those are directly tied to ROI.

9. Programmatic is a Saturated Market

Chances are, your competitors are already using programmatic, as are the biggest publishers and brands.

The programmatic marketplace has become crowded and competitive, which makes it much more challenging to run a successful campaign.

As such, those brands who want to capture the competitive edge must either hire a programmatic advertising agency or an in-house team to manage the results manually. Back to our earlier point regarding the high costs of programmatic–if you’re taking your programmatic strategy seriously, it means investing in people with the know-how to deliver the best possible results.

10. Risk of Bot Traffic

Another risk of programmatic advertising is bot traffic. According to a survey from MyersBizNet, 78% of marketers have concerns about ad fraud and bots.

Advertisers may even spend upwards of 20% of their campaign dollars displaying their ads to bots, not real people. As such, brands must do their due diligence when it comes to working with publishers and intermediary agencies. You’ll want to understand how vendors and publishers protect against ad fraud; what is the content verification process

Sure, the bot problem exists all over the internet, but programmatic ad buying could increase the risk of bot traffic, as there is no relationship between a human publisher and a human advertiser.

That said, programmatic technology is improving all of the time. Publishing companies say that there is there’s less of a risk of ad fraud associated with the AI-based placements, as that same technology can be used to scan for signs of fraudulent activity.

The One Reason You Should Try Programmatic

If you’ve exhausted every effort in the PPC handbook, programmatic might be worth a try.

Targeted, real-time bidding is an excellent way to connect with your buyer personas across platforms. And make no mistake, marketers see the benefit in programmatic, and budgets for this particular ad avenue are only expected to grow.

Programmatic ad spend over the years

However, I would only recommend programmatic as a last resort. It’s a significant investment and you need to start this strategy armed with mountains of data.

It’s important to understand that programmatic isn’t for paid advertising beginners. You want to try everything from Google and Bing ads, plus remarketing on both platforms. You want to try advertising on Facebook, Instagram, LinkedIn.

Play around with search, display, video. The point is, all of these methods are effective, affordable (well, depending on your goals, budget, etc.) and provide access to powerful audience insights.

Even if you have the budget and you’ve found a decent vendor, starting your paid advertising strategy by going straight to programmatic is problematic.

After you’ve exhausted every corner of the PPC universe and you’re starting to plateau, that’s when you may want to look toward programmatic to get in front of some fresh eyeballs.

For tips on how to get started, take a look at my beginner’s guide to programmatic advertising.

Wrapping Up Programmatic Advertising

Long term, we can expect to see marketing move toward adopting a more programmatic approach. But the promise of programmatic is miles ahead of its reality.

Today, not all advertisers are equipped to switch to this model.

Programmatic can be a really exciting way to level up your ad strategy, but as you can see, there are a lot of reasons to sit this one out.

Before you get started, make sure it makes sense for your business, and that you have the resources in place to support it.

10 Reasons You Shouldn’t Do Programmatic (And One Reason You Should)