When brands consider shifting their budgets to programmatic advertising, they need to be aware of several potential issues.
Cost can be a major barrier to entry for some clients. The underlying algorithms of programmatic buying require a consistent stream of data in order to learn and to be able to optimize for a specific KPI. Thus, clients are encouraged to run longer campaigns that have adequate daily budgets for their desired geographic markets and target audiences.
Another challenge is understanding the cost of programmatic campaigns.
Every DSP has a service fee, which is usually a percentage on your ad spend. Then, there is the cost of using audience data from 3rd party vendors such as BlueKai, Ziff Davis or Expedia. Some audience segments can be relatively inexpensive but niche or high-value audiences can fetch very high CPMs. It is not uncommon for some 3rd party audience segments to cost upwards of $5 per mille.
Brand safety and verification is another set of fees. Depending on the complexity of your campaign, you could end up paying 30% of your budget in technology fees alone.
It is important to have an honest and open conversation with your agency to determine the value and ROI of programmatic advertising.
Another serious challenge is ad fraud. Programmatic buying is facilitated by connecting to supply side platforms and/or ad exchanges, which have hundreds of thousands of websites. Thus, spotting and preventing ad fraud becomes paramount. This is why Metric uses ad verification tools to prevent ad fraud and to ensure that your ads are seen by real humans.