QUICK READ: Middlemen in the programmatic industry still eat up about half of the dollar. It’s about the same number as was reported five years ago in a different study. What’s even worse is that 15% of budget disappears into what apparently is the first known manmade black hole. This, along with as fraud is wasting a lot of pharma online ad money.

It’s reported that 50% of programmatic ads does not reach publishers and, therefore actual consumer eyeballs. Today’s online ads are not about getting in front of as many people as you can, they are about getting relevant ads in front of highly targeted people. Programmatic buying usually produces pretty low engagement rates. Standard display advertising ads bought programmatically have very low CTR’s, about 0.18% of standard media, according to Google’s analysis. In other words, you get what you pay for. If you want cheap ads, you can expect very little in terms of effectiveness.

Digital ad agencies love programmatic ads because it involves very little work for them but DTC digital marketers should be doing a better job of tracking these ads with metrics beyond clicks. Today I can set up custom dashboards that show “time on site per click” and “cost per targeted action”.

Last fall I made a client a bet. I bet I could provide better metrics by placing ads on publishers sites that aligned with their target audience versus the same buy, actually, it was more, via programmatic. The online ads we placed directly on publishers sites performed 250% better than the programmatic buy!

Why?

First, we knew about the audience and had a clear picture of who our target audience was and where they would be online. Second, the online ads were creative was specifically created for each publisher’s audience. This made ALL the difference in the world.

As for the programmatic ads, we found ad fraud all over the place traced back to BOTS. Secondly, we also found some ads on sites that the client did not want to advertise on. One was even a porn site.

The best online agencies commit resources to your ad buy and have detailed analytics on how they perform way beyond clicks. They can tell you, for example, which ad led to more coupon downloads and which had more page views.

If you’re planning to spend more money for online ads please reconsider programmatic as a solution. It just doesn’t provide a good enough ROI.