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    The Shifting Goals of Guarantees Will Alter Programmatic for the Better

    by Dean Vegliante
    Posted in: Press
    Originally published by MarTech Advisor (March 2018)
    Metrics and capabilities like viewability and brand safety have gained wide adoption across the digital ad industry lately. As these tools and services become commoditized, they are positively impacting the way brands and agencies buy media, especially guaranteed programmatic buys shares.
    In a digital world ripe with measurement opportunities, the “guaranteed buy” first grew popular as marketers sought clearly defined performance outcomes, such as minimum clicks or conversions. Lately, the parameters of guarantees have changed, and it’s about time. Rather than pure performance, more and more companies are now building guarantees around meaningful quality metrics.

    The programmatic marketplace has become much more commoditized and is primed for a healthy shift. GroupM’s Xaxis trading desk is the latest to publicly announce a move away from a guaranteed CPM and toward metrics such as viewability. The move should catch on widely across the industry very soon, and it will ultimately pull advertisers into a new age where they finally value what matters when it comes to digital media: the ability to deliver an impactful message to the best possible audience.

    The old version of a programmatic guarantee was based on revenue sharing and performance pricing. The programmatic partners got paid for guaranteeing performance, whether that was a click-through rate or pre-determined cost-per-acquisition. The changing digital landscape, beset by fraud and questions of whether ads are actually seen, has shifted the guarantee away from performance outcomes and more toward safety, with assured rates of viewability and limited thresholds of fraud . This pushes programmatic into a new place. Rather than delivering a combination of clicks, the value now comes out of delivering optimal inventory and effective messaging.

    Of course, the real test in all of this is not if the campaigns meet the guarantee, but if they actually provide any lift. After all, a campaign that is in-view and fraud-free is worthless if it fails to reach the right audience and move the needle.

    This creates an opportunity for programmatic technology to do more with optimization. Programmatic has gone from an immature market to a technology-rich market. Every platform is integrated with Moat, IAS, and DoubleVerify – if the marketer has a preferred quality control technology, every platform can serve that preference. With that kind of commodification, the tech platforms themselves need to get better at pulling the different levers that lead to campaign outcomes.

    For programmatic platforms to actually get good at this model and provide value back to clients, they’ll need to shift to meet these guarantees while still factoring in outcomes. This is slightly different from the previous performance era, though. With all of the supply available, programmatic guarantees are now about adding a layer of quality. Optimization is more important than ever. The industry can anticipate increased scrutiny from buyers looking for their messages to not only hit consistent quality scores but to also provide lift. Across the programmatic landscape, this will likely lead to brands, agencies and tech companies placing more value in managed services to help them navigate the ecosystem, rather than simply access inventory.

    This is a positive step for the industry, because it finally draws marketers away from the original metrics, without abandoning them fully. While quality inventory is more important than empty performance metrics, buyers will also see that emphasizing brand safety gives them a sense of security. Combined with mindfulness around RIO performance, this will be the prevailing formula as the market continues to evolve. This movement gives platforms a pocket of opportunity to make sure that they are providing true value and not just inventory access. As all of the platforms seem closer to commoditization, with their standard plug-ins, they’ll now finally be able to separate from the pack based on how well they can optimize and provide value back to the client. If all works out, the marketer, agency and tech platforms will all win.

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