What you need to know:

• Independent media agency Kaimera is pulling back significantly from programmatic display and retargeting, stating it is a waste of money for most advertisers.
• Digital display advertising, of which video is a component, stood at $5.1bn in Australia in calendar 2021, with circa 42 per cent via content publishers traded programmatically per IAB figures. Programmatic trading across the broader digital market stands north of 70 per cent.
• "We’re pulling back, though not yet completely pulling out; it does still play a role for [longer burn] clients for tactical re-engagement. But the industry has been too heavily reliant on retargeting." – Trent McMillan, Chief Digital Officer, Kaimera.

Kaimera is moving almost all media investment away from programmatic display, suggesting retargeting is delivering little to no value for most brands. Chief Digital Officer Trent McMillan said people are sick of being “chased around the internet” for things they have already bought and the industry has “probably overstated the performance levels”.

Digital display advertising, of which video is a component, stood at $5.1bn in Australia in calendar 2021, according to IAB-endorsed figures, with roughly 42 per cent via content publishers traded programmatically. Retargeting has historically made up a significant proportion of programmatic display, but agencies are questioning whether all that spend has driven meaningful growth.

Pre-Covid, Kaimera was investing 12 per cent of ad budgets into programmatic display. Now it’s 4.5 per cent, and solely for longer-burn, bigger ticket categories such as automotive, financial services and home building, per McMillan.

“We’re pulling back, though not yet completely pulling out; it does still play a role for those type of clients for tactical re-engagement. But the industry has been too heavily reliant on retargeting,” said McMillan.

“We’ve had the same conversations with clients about branded search: If someone has been to your website, they know who you are. Do you really need to invest [in branded search] to get them over the line? So we’ve done a fair bit of testing to see if it is incremental or wasted money. More often than not, it proves to be delivering minimal incrementality.”

Post-cookie shift

Kaimera is instead diverting display budgets into “higher impact premium environments and premium video,” said McMillan, and pushing towards attention planning and buying, with industry guilty of “looking at the wrong metrics” in recent years.

He thinks the culling of third party cookies will force advertisers and agencies to rethink approaches to measurement. The firm is increasingly working with first party brand data to drive sales from existing customers “plus improve targeting for prospects, suppression [of non-targets/existing customers] and find lookalike customers,” said McMillan. “We are taking that approach across all digital channels where clients have the scale and ability to invest data ... rather than relying on third party sources or cookies”.

While the platform walled gardens have a strong lead in first party approaches, Australia’s big publishers are investing heavily to catch up, with the likes of Nine, Seven and News touting millions of logged-in users and/or probabilistic capability to identify them across properties.

McMillan would not be drawn on which publishers are closing the gap on the likes of Facebook and Google, versus claims of scale and match rates that may be overstated.

“There is not a consistent currency at the moment, but equally it’s not one size fits all. You have to define the right platform or publisher to deliver for that particular client and their objectives.”

Either way, he said, “relying on performance metrics in programmatic is not going to cut it any more moving forward”.