Advertisers, in our relentless pursuit of efficiency, we've found ourselves sacrificing the integrity of our brands and the effectiveness of our campaigns. Overshadowed by a focus on cost reduction, our lack of focus on placement quality is leading to an erosion of brand value and consumer trust.
The State of Quality Placements
High-quality publishers are achieving fill rates of 85-95% through direct deals and private marketplaces (PMPs), leading to a significant portion of open market inventory that comes from lower-quality sources. Despite this, the majority of programmatic spending is still directed toward achieving low CPMs, higher frequencies on questionable inventory, and gamified outcomes that drive continued spending on undeserving tactics.
This misalignment is concerning, as approximately 23% of programmatic spending – and 21% of impressions – appear on low-quality, made-for-advertising (MFA) websites, which are notorious for generating ad revenue through:
- High ad-density-to-content ratio (i.e. ‘viewable’ ads that aren’t seen);
- Rapidly auto-refreshed ad placements;
- High levels of paid traffic sourcing, like social or display ad traffic;
- Providing generic, non-editorial, templated, or otherwise low-quality content; and
- Poor design, usually using templates.
The True Cost of Low-Quality Placements
49% of consumers start to perceive a brand negatively when they see its ads appearing next to inappropriate or offensive content, which can lead to reduced purchase intent and significant financial losses for the brand.
Additionally, MFA sites are associated with 26% higher carbon emissions compared to non-MFA inventory due to the excessive ad calls and poor user experience. Furthermore, it is estimated that nearly $20 billion is wasted annually on low-quality placements, such as those on MFA sites, highlighting the significant financial cost of neglecting quality in programmatic advertising.
The Value of Quality Placements
Ads placed on higher-quality sites can achieve up to 68% higher brand lift, driven by the contextual environments and higher viewability rates associated with these placements. Additionally, premium sites were shown to be more than three times as effective in driving mid-funnel brand metrics, such as brand favorability and purchase intent, compared to non-premium sites.
The impact on conversion rates is also notable, with premium placements consistently outperforming lower-quality counterparts. This highlights the importance of investing in high-quality ad environments as a strategic approach to enhance overall advertising effectiveness.
Addressability Challenges
“But cookies aren’t going anywhere, so we can still reach our audiences, right?”
Nope.
Even with recent developments indicating that third-party cookies may not be deprecated after all, significant addressability hurdles persist, complicating advertisers ability to reach and engage audiences effectively.
- ~32.5% of global internet users employ ad blockers to avoid intrusive ads and protect their browsing experience
- When given the option, 30-40% of users choose to opt out of tracking due to growing concerns over data privacy
- Safari's Intelligent Tracking Prevention (ITP) and Firefox's Enhanced Tracking Protection (ETP) both block third-party cookies by default, making it increasingly challenging for advertisers to track user behavior across websites
In short, the sample of available bids that are “audience-rich” is dwindling, regardless of whether cookies are available or not.
So Where Do We Start?
There are a number of strategies and partnerships worth exploring to advance your efforts and up your game. Here are four directions to consider:
- Embracing Quality Over Cost
Redirect spending toward premium publishers and formats, primarily through direct deals. While this may result in higher CPMs, the return on investment (ROI) justifies the cost. - AI-Powered Contextual Targeting
Leveraging advanced AI can help identify high-quality placements in real time, enabling advertisers to make informed decisions without solely relying on user data. - Attention-Based Buying Metrics
Shifting focus to attention-based metrics, rather than traditional viewability, can help better value high-impact inventory. - Supply Path Optimization
Streamlining supply paths can reduce inefficiencies and enhance the overall quality of placements.
A Catalyst for Change
With the knowledge that ‘efficiency’ based buying leads to brand reputation concerns, addressability constraints, and significant opportunity cost, let’s look ourselves in the mirror and consider:
- Which metrics really matter?
- Can we accept the business risk that’s being tied to ‘efficiency’?
- What does ‘value’ mean to our industry? What outcomes can we continuously assess to make strides in the right direction?
- Are there pockets of inventory that are being under-valued?
- With the volume of inventory available, where do we start?
This discussion isn't just about better performing advertising; but to borrow a phrase from Enez, it’s about “building a healthier, more balanced media ecosystem” – one that benefits brands, publishers, consumers, and the environment alike.
