Why It’s Time to Use a 1st Party Algorithm

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Programmatic is at a crossroads. Unless it can convincingly demonstrate its adds-value in the same way search is perceived to do so, its stellar growth could plateau. Ten years on as an industry and we are still looking for the correct ways to evaluate the incremental impact we have on the business bottom line. Certainly, we know that unlike search, post click is the incorrect measure of success, and we need to work harder to democratize new standards. If we can solve this, then the budgets will continue to grow, benefiting everyone who drives real value for brands.

Some brands, typically the pure play businesses such as Netflix, Uber and Booking.com, are leading the way and are already very sophisticated in their approach. They know that a one-size-fits-all approach isn’t compatible in a world where marketers’ goals have become increasingly complex, as multiple sometimes conflicting goals are measured in disparate and multiple systems (adservers, web analytics, viewability, in-target reach). Ask yourself, when was the last time you saw just one KPI on the media plan?

These marketers want to optimize towards KPIs that are truly correlated to their business objectives with a lot of media quality constraints and deeply leveraging their data assets. They are also aligning with independent sources of truth such as those from attribution partners to truly measure the real impact of different channels. It is these data sets that are required for their campaigns to be fully optimized.

Over the past three years, the world’s leading DSPs including Google (via DV360), The Trade Desk, Xandr, Mediamath and Beeswax have noticed this trend and created Bring Your Own Algorithm capabilities within their platforms, allowing savvy buyers to create and push into the DSP their own bespoke bidding logic. Pioneering marketers are increasingly building their own algorithms that are tailor made for their specific ad stack, unique set of challenges, and the cherry on the cake, fully transparent.

However, most campaign managers still have to use standard optimization metrics like CTR, CPC or post view CPA. This misalignment of goals translates into strong operational challenges. Trading campaigns is increasingly complex and time consuming and hiring and retaining talent is only getting tougher. Optimizing towards multiple KPIs and sources is an incredibly difficult thing to do manually, and campaign managers end up spending inordinate amounts of time trying to tweak campaigns and push them in the right direction. Often, with limited success.

Lastly, in addition to having to optimize more complex campaigns with the same or less people, agencies and media buyers in general also have to do it with less data, making the ability to exploit each signal in the bid request a key factor of success. With the increasingly restrictive regulatory environment (GDPR, ITP and California), there is a need to move away from traditional methods of optimization, focusing more on context than behavioral targeting.

We believe that the application of AI can address these challenges and elevate programmatic specialists to focus on Enablement and Insights – significantly more value-added work. We’re not the only ones convinced this is the future of programmatic: new and mooted competitors suggest innovation is rife in this space. As a result, we work very closely with the world’s leading DSPs and agencies to make fully automated, highly customized but compliant AI-based media buying a reality for marketers.

I noticed this trend whilst working agency side and this is why I joined Scibids. Marketers and agencies want and need the benefits of domain specific AI capabilities. However, they also recognize that to build the capabilities themselves it would involve a commitment to a multi-year project, dedicated resources and investment on an ongoing basis across multiple platforms with no guarantee of a successful outcome.

AI as a Service business models such as ours use the client or agency’s existing DSP and ad tech set-up meaning it is transparent, flexible and highly effective at driving better business outcomes. In the ad ecosystem at large, we’ll see more such collaborations and partnerships to the benefit of all parties.

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