Programmatic promises the world; effortlessly finding the right audience, marrying the ruthless precision of machine technology and algorithms with the creative flair of advertising, and serving perfectly targeted content to the people that make or break a brand’s success – and the industry has listened. Recent figures show that 75% of marketers are planning on boosting their spend on programmatic in the next 12 months.

However, beneath the shiny surface, many at the highest level of the industry have only a very basic knowledge of how programmatic works, and even the few who know more may be uninformed about what’s really going on. You probably know this from the puzzled look you get on your non-industry friends' faces when you try to explain what you do! In this piece, Jim Hodgkins, managing director, marketing services at VisualDNA (pictured) discusses one of the main problems: lack of transparency and understanding of the data that programmatic advertisers are using.

Two key issues to highlight are the types of data being used and the specificity of the algorithms.  Firstly, the types of data: behind the slick presentations of much algorithmic-driven trading is a reliance on data that gives a signal that may often miss a huge share of the client's target audience.  Given that display click-through rates are commonly a fraction of one percent for prospecting campaigns, the contribution of the 99%+ of the impressions not responding should be a key factor in a campaigns success – it's the huge majority of people viewing the advert. Whether these are mainly being shown to people who are in your target audience that is defined in your research, or to one that merely shares some detailed browser settings and browsing habits with those who buy your product is unknown to many clients.

It does work, to a degree, but it’s not currently an integrated part of the media mix, as it could be driving engagement with a brand's audience and triggering actions through a purchase funnel, whether on or offline. People are always in the dark to a certain extent about how successful their programmatic campaign has actually been; because all they are given access to is the assurance that a segment is indeed reaching who it’s supposed to be reaching based on clicks and check-outs. Clients need to be able to understand who is seeing their advertising based on a more detailed understanding of the user as a person.

Moving on, there is the second issue of the algorithms. Programmatic advertising is based on data sets, which make inferences about massive audiences. The trouble is, the most heavily monetised, and the focus of most major players, is the American audience. Most of the data used in programmatic advertising is based on Silicon Valley's algorithmic interpretation of a largely American audience, prioritised by American companies' project schedules, on businesses founded in the US. As any marketer will tell you, the US and the UK are two nations separated by a common language – for example, while the Super Bowl is the most important event in their calendar, it barely registers in ours. They are also nations divided by a huge bias in revenue growth and therefore focus to be on the other side of the Atlantic. A reliance on US-centric algorithms means that, ultimately, most of the fanfare about programmatic advertising is misleading for clients targeting UK markets – the data is not truly representative of global, or should we say local, consumers.

Take, for instance, the example of the prized 18-24 demographic segment: many marketers see this web-savvy, highly educated and demanding group as the most important to win over, but in reality the data available from companies at present is ill-equipped to make distinctions between the vast range of personality types and characters this age group comprises, particularly when it comes to making the cultural jump from ‘across the pond’.

Imagine a typical US millennial Ivy League student – driven, ambitious, with a neatly-pressed blazer and tickets to a glitzy prom. Now, compare this to the scruffy and eccentric, intellectual but indifferent stereotype that springs to mind when you picture a British university student. It quickly becomes apparent that, although they technically belong to the same segment, these two millennials don’t have much in common other than their age. In short, compare the aesthetics of Silicon Valley to Shoreditch!

So, while the technology behind programmatic media buying may be impressive, the orientation of much of the data currently available continues to lag behind, and is questionable at best, often focusing on obscure technical differences rather than a deep understanding of the user. However, all is not lost. Slowly but surely, a new wave of data is coming to the forefront of the programmatic landscape. Psychographic profiling of consumers, which targets consumers based on a detailed understanding of who they are and is based personality type, is an entirely different way of identifying an audience; it's based on the proven scientific link between psychology and both advertising engagement and response

When data like this is harvested directly from the countries where the target consumers actually live, the playing field is instantly levelled. Companies are able to provide first-party data that is far more reflective of the region’s unique quirks and characteristics, in addition to having a more granular approach to each individual consumer. Instead of lumping large portions of the population together based on age or geographic location, they are isolating what makes people tick, and what ultimately motivates consumers to engage, and ultimately click the ‘buy’ button. Data that describes who the audience is, and is optimised for the local market.