The rapid growth of programmatic is set to continue into next year and beyond as advertisers begin to truly understand the benefits it offers. But the automation of advertising also brings specific challenges, particularly in terms of wasted delivery.
In the programmatic ecosystem, wasted delivery works against both value and conversion, with around 36% of waste caused by fraud and non-human traffic. Many ad exchanges have created cutting-edge technology to help prevent marketers from buying bot traffic. Despite this sophisticated technology, buyers can still experience underperforming inventory segments.
Utilising conversion data differently and using it more effectively has the potential to significantly reduce waste, increase conversion, and add value. So how can marketers make data work harder?
A system of data sharing
Competition within the industry means that buyers rarely share data, leaving them unaware of the true value of their inventory. Without an in-depth look at the volume of conversion data, they cannot determine its real value and that often means budget is spent on underperforming inventory. Advertisers need to be bold and share their conversion data in a trusted, controlled exchange to improve small and mid-size inventory opportunities.
A model of collaboration
The buyer and exchange collaboration should ideally be structured as follows:
- Conversion data is shared by buyers and the exchange aggregates the data
- The conversion data is secured and protected by the exchange so that the raw details – where value is identified and conversions take place – is never revealed to participating buyers. Such exchanges do not purchase from their own inventory
- Buyers are provided with an ecosystem where performance is enhanced and increased because buyers do not need to take inventory purchasing risks and can make informed buying decisions
- The exchange will only house strong performing publishers, increasing conversions and therefore reducing waste
A Collective of Conversions
Sharing conversion data is not dissimilar to sharing bid data, which exchanges and buyers already do successfully. Exchange operators can better assess inventory when conversion data is shared, and the resulting increase in conversion rates and significant reduction in waste will attract more advertisers to the programmatic marketplace. This will mean more data, more access to high-quality users, and greater revenue.
While data sharing could be considered ambitious, the advertising industry is renowned for its forward thinking. Moving towards a conversion data exchange collective has the potential to reduce the expanse of wasted delivery in the industry, and create a powerful collaboration between exchanges and buyers to ensure programmatic is leveraged in the best way in the future.
