There's a lot of noise outside, and as more marketers continue to embrace programmatic advertising, we'll try to clear the air. Which brings us here - about to reveal some of the grey areas in the complex world of digital advertising we all know and love. Let's bust some myths! 1. Programmatic buying and real-time bidding (RTB) are the same thing. A common point of confusion in the digital media buying world is one of the "same, same but different" situations. Technically, programmatic is an automated format of ad buying - one computer communicates with another to perform campaign actions, and real-time bidding is just one type of programmatic buying . Programmatic buying alone automates certain tasks (such as inserting order or ad tags), ultimately enabling ad buyers to develop more sophisticated strategies, perform better analytics, and adjust more effectively as the industry shifts. Real-time bidding, or RTB, is a technical protocol or mechanism for automatically bidding, buying, and selling impressions in an auction format. It's a lightning-fast auction that takes audience data into account to assess the value of a given advertiser's impressions ( BannerConnect, 2017 ).
Simply put, advertisers compete for impressions or ad space on web pages through automated bidding. The highest bidder wins the auction and placement on that particular page (which then loads immediately). So while RTB definitely equals procedural, procedural is not exactly the same as RTB; RTB is just a part of procedural. 2. Ad fraud is prevalent only in programmatic. Let’s be honest – between click farms, bots, foot traffic (yes, the end user is real), fraud is prevalent in today’s world. According to Juniper Research, advertisers are losing $51 million a day to ad fraud, which could cost over $19 billion in wasted ad spend by the end of 2018 ( SearchEngine Journal, 2018 ). These numbers are not small. However, according to the National Association of Advertisers (ANA), as media agencies improve their industry mailing list filtering processes, programmatic buying is no longer a greater risk than general marketplace buying. Integral Ad Science (IAS) 2017 Media Report data states that when the proper precautions are in place (such as automated pre-bid filtering), the fraud rate is no different at all—in fact, they found programmatic advertising to have slightly lower fraud rates in the U.S. Buy a desktop monitor ( Integral Ad Science, 2017 ).
Programmatic video numbers (in the US) are only slightly higher than programmatic and play the same globally. Overall, programmatic fraud rates are either lower or vary little, provided the proper precautions are taken. 3. RTB is low quality or bad stock. Are there instances of questionable publishers supplying questionable inventory to the RTB ecosystem? Yes. However, most of the premium suppliers (SSPs and DSPs etc.) are actively working to remove such inventory from the market - as low quality inventory is not good for anyone in the long run. In today's environment, we might buy the exact same impression as a Direct Buy campaign. In the beginning, however, RTB was seen as a means of monetizing inventory that wasn’t sold directly – which is far from the truth today. Advanced technologies such as headline bidding mean that for many publishers, every impression is potentially available through real-time bidding. Header bidding is a new, unified auction conducted by publishers outside of their main ad servers that allows advertisers to pick impressions with the highest priority; it is also known as "first look" ( AdProfs, 2018 year ).
Header bidding enables publishers to maximize revenue by applying the best price for any given impression - in many cases this may be a direct-sold campaign, but if a programmatic source offers a higher CPM CPM, the publisher's ad server can choose this source instead. Attitudes among publishers have also changed significantly. Previously, publishers could be suspicious of RTBs and purposely withhold valuable inventory. Today, however, most publishers recognize that it is really in their best interest to have the highest bidder buy every impression. 4. Programmatic is a "black box". The term "black box" doesn't come from programmatic buying, but rather the business model that companies that offer programmatic buying services choose to offer. Advertisers can participate in real-time auctions by sending an insertion order to the company running their ad campaign and sending back only basic statistics. In this regard, it's no different than buying directly from an ad network. However, advertisers can also choose to work with a partner that promotes transparency, showing them everything — even controlling it themselves and deciding how various aspects of a campaign should run (outsourced management services). For most major DSPs, self-service customers see exactly the same as buyers who work at that DSP.