by Charlie Stewart (@CStewart_ZA) Instead of empowering a powerful — and, frankly, very believable — salesforce of friends, family and colleagues to do more of our work for us, as per recent research, we marketers continue to think we’re the only people who should be trusted to handle the complex process of customer acquisition.

Encouraged by the white heat of technology (or perhaps because we were too lazy to do the work we felt machines could do for us), we spawned a Programmatic advertising technology (adtech) industry to help us in this quest. But it’s an industry that’s coming under increasing scrutiny.

Earlier this year, the Incorporated Society of British Advertisers (ISBA) commissioned PwC to investigate the proportion of programmatic media spend that makes its way through the sausage machine to achieve its ultimate purpose.

Half my advertising is wasted

It appears that John Wanamaker’s famous words of over a century ago are as true today as they were then. The research found that just 51 cents out of every rand reaches a publisher and gets turned into an ad that you or I might see.

The rest is sucked up in desk fees, kickbacks and fraud.

It’s also common knowledge that the money that does reach publishers isn’t particularly effective. Display ads (which is where programmatic was supposed to be a tour de force) achieve an average click through rate of less than 0.5%; while they might help in building brand awareness, they’re not doing much for customer acquisition.

Some parts perform

This isn’t to say that the digital ad ecosystem is broken. Some parts — including those that receive the lion’s share of adspend — continue to perform exceptionally well. Search is, rightly, the foundational cornerstone of all online advertising programmes. While social media advertising might be toxic right now, its proven efficacy will see brands flock back in the fullness of time, too.

But programmatic still accounts for a sizable chunk of ad spend, perhaps as much as US$147bn next year. If the ISBA calculations are applied to that figure, it suggests that over US$70bn worth of spend is disappearing into a hole. That’s more than twice our own government’s R500bn covid-19 stimulus plan.

What’s particularly irksome is that the ISBA report isn’t news, although it does provide some hard evidence to support what people such as Dr Augustine Fou and the adcontrarian Bob Hoffman have been telling us for years. With their repeated reminders of the failings in the system, they’ve been busy playing the modern day role of the little child in Hans Christian Andersen’s tale of The Emperor’s New Clothes.

Industry is reacting

To give it some dues, the industry is reacting. Through its brand safety initiative, the IAB has been trying to bring transparency to the programmatic process and agencies such as Omnicom have launched new programmatic platforms that strip out some of the inefficiency.

Yet it feels as if we’re trying to fix something that’s inherently broken. Perhaps it’s time to give up on the naked failings of programmatic and double down on delighting our customers by providing them with great experiences. Research studies ad nauseum have found that it’s far cheaper to retain (and please) an existing customer than it is to acquire a new one.

If your current clientele not only buy more but become active evangelists for your business, by focusing our energies on activating them, we can perhaps restore some of the confidence in our trade that the programmatic debacle has eroded.

See also

• Columns | Clicks ’n Tricks – Charlie Stewart
• Are South Africans satisfied with their online shopping experience?

Charlie Stewart (@CStewart_ZA) is CEO of Rogerwilco, a multi-award-winning independent digital agency best known for its expertise with Drupal, SEO and content marketing. Together with Mark Eardley, he co-authored Business to Business Marketing: A Step by Step Guide, (Penguin Random House, 2016) and may be found on LinkedIn. Charlie contributes the regular column, “Clicks ‘n Tricks”, which looks at how brands are using digital channels to engage their customers, to MarkLives.com.

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