The Top 10 Myths in Programmatic Advertising

Before we close out the year, we had to put an end to these myths about programmatic advertising by circling back to a conversation with our founders. Marc Poirier, our CEO, sat down to debunk all the lies with our COO, Vincent Potier. If anyone has deep insights into the programmatic advertising industry, it’s him – he formerly established Captify as one of the leading ad tech companies in the UK, Europe and the US. In the interview below, Marc asked the tough questions, and Vincent shared his expert insights. See all of Vincent’s entertaining answers below in our top ten list of programmatic advertising myths (plot twist: one myth is partially true!!).

Myth #1 Programmatic Is Dead

While there will be turbulence, growth will continue on the back of important trends such as the continued rise of Connected TV (CTV).

“False of course. (…). No programmatic is not dead. Programmatic is going to go through turbulence but positive turbulence. It’s going to shake but it’s still going to grow and there is absolutely no doubt. I’ll just give you. You know. I’ll just give you two points. One is what scares people is they cannot say exactly how the programmatic spend is going to be structured in 2022, which is only a year away. So that is what is scaring people. Number two, the biggest trend in programmatic spend I would say in the last 18 months in the United States or in the North American market has been the rise of CTV. When you think about the rise of CTV, you need to parallel it to what powered internet advertising at the very beginning like 15 years ago – and it is a migration of spend dollars away from print to performance advertising on display. You’re getting exactly the same phenomenon now with TV money… traditional TV money being migrated into CTV and it is only the beginning. The prize is gigantic and you know what? CTV doesn’t rely on third-party cookies.”

Myth #2 – Walled Gardens Will Take All The Money

Facebook and Google both are struggling to maintain their growth pace.

“Of course not! The walled gardens are going to do everything they can not to lose money. Look at what’s been happening – which is unrelated to chrome and third-party cookies  – but what we were talking about earlier… IOS 14. Facebook is actually suffering right now to keep the advertising spend, which basically they’re used to. So the walled gardens are obviously way more powerful because they represent, you know probably 80 percent of the programmatic spend in the market, today –  Facebook, Google and to an extent Amazon. But I mean they could crumble at any time. So, I’m not worried at all for the independent money.”

Myth #3 – Advertisers Will Revert To Traditional Media

As they say, you can’t stop progress, and in this case, there is definitely no turning back now.

“It never happens. You know. It’s like saying that when you had the 1973 oil shock, people decided to park their cars in the garage and get back on bicycles. Humanity doesn’t progress like that, so of course not.”

Myth #4 – Contextual Advertising Will Rule The Day

While it will definitely become more important than it ever was, contextual advertising will likely not be the most important targeting method available to advertisers, far from it.

“Contextual advertising has a big problem, and the problem they have is the word contextual. Contextual has always been seen as a poor parent of advertising technology. Now, that said, many of the solutions, which are being thought about rely on contextual technology (which basically is a nice word for saying: analyzing the page on which you want to serve an ad). – and therefore, it is page targeting rather than user-level targeting. And contextual will have a big play in the new world post third-party cookie, but is it going to rule it? No, it’s not.”

#5 – Ad Tech Will Be Privacy-Free

Privacy is not only about capturing personal data, but it’s also about compliance. Ad Tech companies need to pay close attention to privacy legislation, even if they don’t collect personal data.

“Yeah, that’s one of the illusions that I hear a lot, today. So, it goes like this: okay, the third-party cookies are going away and new technologies, which do not use personal data – cookie IDs, device IDs, IP addresses – this is all considered to be personal data or personal information, according to all the new legislations about privacy and personal data. So, the reasoning goes like this: If I don’t deal with personal data in order to do targeting, therefore I don’t have to care about privacy anymore. Obviously, this is absolutely bonkers. Privacy is not only about capturing and collecting personal data. It is also about the privacy, and compliance of the publishers you work with, and also remember that personal data collection can happen before you target, but it can happen after you target also. What is true though, is if you stop using the equivalent of cookie IDs or IP addresses in order to do targeting, you could put yourself out of scope. So, it’s partially true.”

#6 – Y2K Of Cookies Is Coming

Google will not kill itself – it controls the market and needs to comply with legislation, advertisers should pay close attention to what Google is doing as they will definitely control the timing of cookie deprecation.

“Yeah! So, obviously, you know it’s wrong and for a very simple reason, there is a big guy who’s in control of the speed at which it goes. Remember the legislation here. They’ve existed for three years already, so it’s simply that Google just wants to make sure the market moves with the times. But they are always in control. You know, when you are a market maker of an ecosystem, you have no interest in having the ecosystem basically going through two troubled times.”

#7 – All The Money Will Go Back To Search Or Social

Social advertising is facing major issues currently as advertisers see their audiences dwindle to ever smaller numbers, and search growth has been slowing down for years. Growth will be in programmatic.

“Yeah, I mean social… I think we spoke enough about Facebook, so it’s not going to happen. And search is a more-than-mature market, so it’s obviously not going to be the case.”

#8 – The Silver Bullet Solution is Coming

We need a new currency, many solutions will emerge, and the market will select several, which will be the dominant solutions.

“Now, I think every time there is a transformation, people imagine there will be a silver bullet and that’s not the way the market works. The way the market works is when you’ve got a main commodity of the market or a currency (…) what happens is you’ve got plenty of solutions, which are going to compete with each other and then that diversity of solutions is actually going to diminish with time and then the market is basically going to chase a few solutions, which are going to be the dominant solutions of the market. But there’s not going to be a silver bullet, especially not in the short term.”

#9 We Will Revert to Data-less Advertising – True or False?

Advertisers will still use data, just different data solutions, less reliant on user-level targeting.

“It’s false. It’s just not going to be the same data, and I believe between now and the next 24 months, everyone and their brother is going to be a solution. But past 24 months, what we will see is a different data environment, which is probably not going to be as reliant on user-level targeting.”

#10 Does Anybody Know The Future?

The problem is every time we try to predict the future, we’re wrong. Winners are those who are ready to adapt by design.

“(…) The problem especially in technology, and the reality is, every single time you try to predict the future you’re wrong. In the future, there is such a range of possibilities that it is extremely hard. The true winners are not the ones who predict the future for sure. They are the ones who structure and shape their companies in such a way that at the core of the company, you’ve got not only privacy (of course you know privacy by design), but you’ve got something, I would call agility by design. That means the company is shaped in such a way that it can deal and cope with any kind of emerging future. These are the winners of tomorrow.”

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Transcript

Marc Poirier: “In today’s episode, we’re going to talk about the top 10 myths surrounding the changes to the privacy landscape and the data world in advertising – let’s go!

Okay, we’re gonna play a little game… I’m gonna say 10 big bold statements that at Klever we think these are myths and you’re gonna say why they’re myths, okay?”

Vincent Potier: “Okay so they’re all myths so I can’t say true or false”

Marc Poirier: “Oh you can say it’s true, but we’ve had these discussions before (laughs).”

Vincent Potier: “Okay okay okay cool, so I’ll take the liberty then I’m listening.”

Marc Poirier: “All right number one, programmatic is dead.”

Vincent Potier: “False of course. Why would we be recording beautiful videos if we were afraid for our revenue? (Laughs). No programmatic is not dead. Programmatic is going to go through turbulence but positive turbulence. It’s going to shake but it’s still going to grow and there is absolutely no doubt. I’ll just give you. You know. I’ll just give you two points. One is what scares people is they cannot say exactly how the programmatic spend is going to be structured in 2022, which is only a year away. So that is what is scaring people. Number two, the biggest trend in programmatic spend I would say in the last 18 months in the United States or in the North American market has been the rise of CTV. When you think about the rise of CTV, you need to parallel it to what powered the internet advertising at the very beginning like 15 years ago – and it is a migration of spend dollars away from print to performance advertising on display. You’re getting exactly the same phenomenon now with TV money… traditional TV money being migrated into CTV and it is only the beginning. The prize is gigantic and you know what? CTV doesn’t rely on third-party cookies.”

Marc Poirier: “Second, the walled gardens of Google and Facebook and all these platforms with logged-in users will take all the money.”

Vincent Potier: “Of course not! The walled gardens are going to do everything they can not to lose money. Look at what’s been happening – which is unrelated to chrome and third-party cookies  – but what we were talking about earlier… IOS 14. Facebook is actually suffering right now to keep the advertising spend, which basically they’re used to. So, the walled gardens are obviously way more powerful because they represent, you know, probably 80 percent of the programmatic spend in the market today –  Facebook, Google and to an extent Amazon. But I mean they could crumble at any time. So, I’m not worried at all for the independent money.”

Marc Poirier: “Number three, advertisers will shift their money from digital to traditional media.”

Vincent Potier: “It never happens. You know it’s like saying that when you had the 1973 oil shock, people decided to park their cars in the garage and get back on bicycles. Humanity doesn’t progress like that, so of course not.”

Marc Poirier: “Number four – contextual advertising will rule the day.”

Vincent Potier: “Contextual advertising has a big problem, and the problem they have is the word contextual. Contextual has always been seen as a poor parent of advertising technology. Now, that said, many of the solutions, which are being thought about rely on contextual technology (which basically is a nice word for saying: analyzing the page on which you want to serve an ad). – and therefore, it is page targeting rather than user-level targeting. And contextual will have a big play in the new world post third-party cookie, but is it going to rule it? No, it’s not.”

Marc Poirier: “Number five, ad tech will be privacy free.”

Vincent Potier: “Yeah, that’s one of the illusions that I hear a lot today. So, it goes like this okay: the third-party cookies are going away and new technologies, which do not use personal data – cookie IDs, device IDs, IP addresses – this is all considered to be personal data or personal information, according to all the new legislations about privacy and personal data. So, the reasoning goes like this: If I don’t deal with personal data in order to do targeting, therefore I don’t have to care about privacy anymore. Obviously, this is absolutely bonkers. Privacy is not only about capturing and collecting personal data. It is also privacy, compliance of the publishers you work with, and also remember that personal data collection can happen before you target, but it can happen after you target also. What is true though, is if you stop using the equivalent of cookie IDs or IP addresses in order to do targeting, you could put yourself out of scope. So, it’s partially true.”

Marc Poirier: “Number six, there will be a Y2K of cookies.”

Vincent Potier: “Yeah! So, obviously you know it’s wrong and for a very simple reason, there is a big guy who’s in control of the speed at which it goes. Remember the legislation here. They’ve existed for three years already, so it’s simply Google just wants to make sure the market moves with the times, but they are always in control. You know, when you are a market maker of an ecosystem, you have no interest in having the ecosystem basically going through two troubled times.”

Marc Poirier: “Number seven, all the money will go back to search and social.”

Vincent Potier: “Yeah, I mean social… I think we spoke enough about Facebook, so it’s not going to happen. And search is a more than mature market, so it’s obviously not going to be the case.”

Marc Poirier: “Number eight, someone’s going to design like a silver bullet solution to all this.”

Vincent Potier: “Now, I think every time there is a transformation, people imagine there will be a silver bullet and that’s not the way the market works. The way the market works is when you’ve got a main commodity of the market or a currency (that’s what I’m looking for – a currency of the market). The third-party cookie was the currency of the market. Well, what happens is you’ve got plenty of solutions, which are going to compete with each other and then that diversity of solution is actually going to diminish with time and then the market is basically going to chase a few solutions, which are going to be the dominant solutions of the market. But there’s not going to be a silver bullet, especially not in the short term.”

Marc Poirier: “Number nine, we will revert to our 1990s style dataless-advertising, true or false?”

Vincent Potier: “It’s false. It’s just not going to be the same data, and I believe between now and the next 24 months, everyone and their brother is going to be a solution. But past 24 months, what we will see is a different data environment, which is probably not going to be as reliant on user-level targeting.”

Marc Poirier: “Number ten, does anybody know the future?”

Vincent Potier: “Of course, we don’t. I’ve got a theory about this, which is, hopefully, one day people will have the courage to tell that to their investors. The problem especially in technology, and the reality is, every single time you try to predict the future you’re wrong. In the future, there is such a range of possibilities that it is extremely hard. The true winners are not the ones who predict the future for sure. They are the ones who structure and shape their companies in such a way that at the core of the company, you’ve got not only privacy (of course you know privacy by design), but you’ve got something I would call agility by design. That means the company is shaped in such a way that it can deal and cope with any kind of emerging future. These are the winners of tomorrow.”

Image Credits
Feature Image: Screenshot taken November 2022 via Tenor.
Video via YouTube.

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