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AOL Says 92% of Marketers Use Programmatic Despite Persisting Challenges

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AOL announced last week that ad revenues were up 20 percent for the quarter, due in large part to the growth of its programmatic business. To get a better handle on where advertisers, publishers and agencies stood on programmatic ad buying, it surveyed a selection of them—with most representing Fortune 1000 companies—earlier in the summer, and while 86 percent of brands claimed to have a strong handle on how it works, only 50 percent of publishers said the same.

At the same time, per AOL, approximately 92 percent of marketers are now using programmatic.

But for agency and brand senior executives, the top three programmatic ad spending challenges are the quality of the inventory in these programs, transparency of the process and the technology used to run the algorithms and place the ads. And while publishers agree that inventory quality is a top concern, education of what these programs are and what they can do—and how to measure ROI—round out their list of worries.

Contributing to that disconnect, the survey found 73 percent of buyers are working with 20 or more vendors, making it difficult to see the real benefits of programmatic purchasing strategies. And because of that, almost 60 percent of overall respondents believe the digital media buying process is still too time consuming.

There are several efforts in the works by a variety of sources to help streamline programmatic purchasing, and make it more attractive to everyone in the cycle. To help address the quality of the properties, Google expanded its private programmatic exchanges last month, working with ABC to promote the network’s new television show Rising Star. Unlike most programmatic placements, Google worked with publishers to curate a selection of masthead-level opportunities; in most programs, these types of top-tier placements remain outside the realm of the automated system.

Taking a different strategy, Mediahub, which is the media arm of Mullen, a Boston-based ad agency, announced a partnership with Videology, which is a programmatic platform for television and digital video placements. The firm hopes it can use this partnership to make video ad placements both more efficient and better informed. The larger pool of data to pull from, the agency said, will improve decision-making both before the ad is placed, as well as after the campaign has run.

And the surge of programmatic buying is not limited to the United States. A recent Interactive Advertising Bureau survey found that 98 percent of U.S.-based companies use the automated ad buying process in some way. In countries where English is not the primary language, however, that number is 72 percent and growing.

“The promise of ‘programmatic everywhere’ is on the verge of being realized,” Patrick Dolan, IAB executive vice president and CCO, said. “It is clear that programmatic advertising strategies have paid dividends for U.S. publishers, brand marketers, ad technology vendors and others in the industry, and now it is time for this practice to benefit marketplaces around the world.”

Display and mobile continue to dominate the types of ads most agencies and brands look to purchase with programmatic technologies, the AOL survey found. Agencies place 86 percent of their display ads using these platforms, and brands used them for 76 percent of placements.

On mobile, agencies are placing 60 percent of their ads via programmatic buys, while brands are close behind with 56 percent of their placements. Video, the survey found, also ranked high—at 60 percent—for agencies, while brands listed only 48 percent of their video ads as going through programmatic exchanges. The numbers drop sharply for social and search ads—in the 20 to 30 percent range—with television ranked the lowest, with only 13 percent of the ads being placed through programmatic technologies for brands, and 7 percent for agencies.

Only 9 percent of agencies and 8 percent of brands surveyed said they use no programmatic placements at all.

Unsurprisingly, AOL found that display, mobile and video ads are the three fastest-growing categories, with 87 percent of brands and agencies planning to increase their spending in these segments by 50 percent or more in the next six months. For social, television and search ads, the respondents reported a planned increase in spending, but in the 10-20 percent range.

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