How pro football can explain programmatic progress

AOL Canada's John Erhart discusses ad fraud, viewability and more

JohnErhart1John Erhart‘s job is not an easy one. Even though programmatic buying has taken off in North America, the director of sales in Canada for One by AOL faces a market that’s concerned about ad visibility, fraud and security.

Erhart built his career in online advertising, and will be a keynote speaker at the upcoming AdTech Canada conference on March 29. Ahead of his presentation, Marketing wanted to know what he’s been hearing from marketers looking to venture deeper into the often complex world of programmatic media.

On Canada’s cautious approach

When I first came here a few years ago, it was a big surprise to me that all the banks, for example, weren’t putting [tracking] pixels on their sites, which is a big part of optimizing towards ROI targets. It seems to me that the caution on the Canadian side stems from personal data concerns. Part of that might have to do with politics, or senior-level folks not wanting to take that risk. The U.S. seems more comfortable with that. As we’ve stared to build out data sets and moved into where our [Canadian] customers are housing their own data, that’s been a slower transition than what we’ve seen in the U.S. Canada is a more risk-averse culture than the U.S., where they’re more willing to say ‘I’ll try this first-party data stuff out. If it doesn’t work out, I might get fired, but I’ll just go somewhere else.’

On the complexity of programmatic’s ROI opportunities

The hardest part about actually communicating the value of that to a client is it gets to a point where you have to almost be an engineer or into computer science, but also have a PhD in math because we’re using such complicated mathematical models. You’re combining two very difficult disciplines. There are lots of offerings in this space that aren’t using the same level of math or rigour, and that might be a great solution for companies that aren’t spending millions online. But if you’re in the $5 million to $10 million spending range, I think you need to take that extra step where you have a model that’s mathematically valid.

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On dealing with the industry’s criticisms over fraud and viewability

You can almost think of it like preventing terrorism. As we get more sophistcated as a company and figure out what [fraudsters] are doing, they’ll try to get more sophisticated in terms of how they manipulate bots to get around what we’ve got in place. At the end of the day, I think we’re ahead of the folks trying to do that, but if you go into [programmatic] unprotected, you’re going to find a lot of fraudulent inventory.

On how things are changing

A lot of the conversation is moving towards attribution. My analogy is pro football. Say you’re a New England Patriots fan watching Tom Brady play. Brady throws seven passes down the field for 80 yards, and when they get to the one yard-line, their running back – who’s probably getting cut next year – runs it in for the touchdown. Most vendors, maybe 95%, are probably using that last-touch attribution model for online assessment. The truth is, until you use technology that analyzes the whole funnel, you might have a Tom Brady on your team and not know it. It might be a Huffington Post sponsorship, a viral video on YouTube, a ton of different things. But until you’re attributing that funnel in a correct, mathematically relevant way, you’re not seeing the whole picture.

On what fascinates him in programmatic right now

The question I find most interesting is ‘What is the cost of getting exactly what you want?’ What degree of viewability is acceptable to you as an advertiser? It’s hard right now to figure out something like ‘this great ad on x publication is physically in view 50% of the time, but it’s typically embedded in great content on the home page. Only 50% of people scrolling down and seeing that ad, but when it’s in view, it’s in view for a minute. And when you buy it, it’s a dollar compared to something that’s in view at three or four dollars.’

How many seconds is it in view versus the price you’re paying? What’s the pennies-per-second? That’s where you get to a metric where you know what the value is in terms of getting people to see an ad. We’re going to get more sophisticated with these tools, and we’ll get to a place where you can truly judge – on a monetary basis – the value of everything that you’re buying.

What started as a method where ad impressions were bought via machines inexpensively at large scale is transforming quickly into a discussion on quality, trust and new opportunities for marketers. How has the programmatic ad industry responded to early criticisms, and where might some of the future growth areas emerge? John Erhart will present “Programmatic: Then and Now (And What’s Next)” at Marketing‘s AdTech Canada on March 29. Register for the half-day conference now.

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