Explainer: Programmatic Digital Advertising For Politics (Jordan Lieberman & Kate Holliday – Powers Interactive)

Jordan Lieberman:

It's infuriating 'cause some of the, the best known biggest publishers are really doing everything they can to discourage political advertising.

Eric Wilson:

I'm Eric Wilson, managing Partner of Startup Caucus, the home of campaign tech Innovation on the right. Welcome to the Business of Politics Show. On this podcast, you are joining in on a conversation with entrepreneurs, operatives, and experts who make professional politics happen. This episode today is all about programmatic digital advertising. In the political space, you'll learn more about how it works, the risks and benefits, and what new technology is doing to make it more efficient, especially for political campaigns. To guide us on this discussion, we're joined by a pair of industry experts from Powers Interactive, a programmatic media company specializing in politics and public affairs. Jordan Lieberman is the c e o and he boasts a long career in the political advertising industry, including a stint at campaigns and Elections Magazine. We're also joined by Kate Holiday, vice President for Political and Public Affairs, who similarly has been in this industry for a, a very long time, and I've had the pleasure of working with both of them on different campaigns and projects over the years. So very excited to learn more from them. Jordan and Kate, let's start with an explanation for our listeners about what programmatic advertising is and how it differs from some of the other types of advertising they might be familiar with, like connected TV or social media ads.

Kate Holliday:

Absolutely. So just to define what programmatic advertising is, we see it as the process of automatically buying and selling digital advertising space. Before programmatic advertising, all of this had to be done manually. So from setting up to ordering to reporting, it was all an extremely manual process. It's streamlined now through the process of automation, and when we use it for political advertising, we're able to target specific audiences and tailor messages across various digital platforms, including connected tv. So we're just able to maximize ad impact and make sure that we're creating the most efficient media buy possible.

Eric Wilson:

So programmatic advertising isn't a specific type of ad, like a display ad or a video ad. It's more refers to the process of how it's bought?

Kate Holliday:

Absolutely, yes. We're not relegated to just one specific type of ad, like a, a banner ad or a pre-roll video ad. It's just the way that we transact and buy advertising now.

Eric Wilson:

And so can you buy specific websites when you're doing programmatic advertising?

Kate Holliday:

You can. It's one of these things where, you know, just 'cause you can showed you. Okay. and we do, you know, a lot of times clients will come to us and they'll have to be on a, a specific publisher. They have to be on a Fox News, or they have to be on a local newspaper ad in Des Moines, Iowa. And in those situations we will reach out directly to the publishers because the candidate is, that's his, his hometown paper, and he has to see his ad on that specific site. But for, to make the most efficient by possible. And because in advertising now it's all about the audiences. We're com we're becoming screen agnostic. And I know that you've discussed this on your other shows, how the world is evolving. It's a fractured environment. We're streaming more than ever. Covid really jumped that to the forefront of how people are consuming content. So we're not so much focused on the screens as we are finding an audience mm-hmm. In digital advertising. And when we have to go to a publisher directly, it's because the client wants to see their ad on that specific publication or it has some sort of effect on the overall campaign itself. We know we're gonna get a higher engagement on that specific publisher site.

Eric Wilson:

So with programmatic advertising, you're, you're making the strategic decision to say, look, I, you know, within limits, I don't care where my ad appears, as long as it's appearing to the right people the voters at

Kate Holliday:

Out at time. Absolutely. And are we trying to reach these people on sight, sound in motion with video or are we trying to get them to create some sort of actions? So we're gonna give them a banner ad. Are we trying to get them to give a dollar give to a campaign or are we doing a branding? We want them to know who this candidate is, we want them to see their family in the video. So it really just depends on the campaign itself and what those goals are.

Eric Wilson:

So I, it sounds like programmatic advertising definitely offers a lot of convenience and that, that's really where I turn to it for as a, as a media buyer you know, for those of us who are in the political space, we care about the voters that voter file less so about where are we getting them. We, we want to make sure we're getting the message to them as efficiently as possible. And at scale, what are the disadvantages or, or maybe risks that are associated with, with programmatic buying?

Jordan Lieberman:

There are things that you need to be very clo pay very close attention, attention to in the programmatic space. So one is add quality and two is data quality. So there's a lot of people that will replace a high quality data set like L two with something that's cheaper inside the D S P and don't necessarily tell the client. So it's very important to keep an eye on your data. And then the, in terms of ad quality, there's a lot of sites that are either questionable or just not places you want your ads to run because they're not brand safe. So an inexperienced programmatic buyer can do a lot of damage if you're not careful. It's not just a plug and play activity.

Eric Wilson:

I think there's a, the other side of it too, which is you can target too narrowly, right? So obviously the advantage of programmatic advertising is you are, you're going to the specific voters, but as we know, the these match rates aren't, aren't perfect. And so I see a lot of times campaigns will, will over target and so they're actually missing out on a lot of, lot of voters or people that might not even appear in a voter file but are are likely prospects for them.

Jordan Lieberman:

You're completely right. Not just over targeting, but also we see a lot of geofencing where someone wants to target, you know, a a six foot radius <laugh> someone in someone's living room. That's not really how it works. Even though it does it, you know, you, you, you know, people are selling it that way. But, you know, targeting a living room is probably not the best way to do it. And we do get a lot because of that's how people are trying to sell it. We do get a lot of requests for, you know, like I said, six, six foot radius in someone's living

Eric Wilson:

Room. Yeah. There's this again, it's like this, this overcorrection, you kind of have this this goldilocks to, to ads. You know, on one hand we say, okay, TV effective but almost no efficiency. 'cause You're going into other states, other districts TVs that aren't even turned on <laugh>. But, and then, and then digital, it is not the totally waste free ad platform. 'cause That's not how advertising works, right? You, you, you need to reach people with repetition and, and you should sort of target broadly, but certainly more efficiently with digital. But yeah, definitely always have to explain the, the, the limitations of geofencing before people get too cute.

Jordan Lieberman:

Yeah. Yeah. That happens. And I think that comes with experience. Eric, you've been around a long time. Kate. same thing is like, you know, there's certainly people that are just new to this that will over target because they can. And I think it takes people with a little bit of experience to be able to say, well, just because you can't, doesn't mean you should <laugh>.

Eric Wilson:

Kate, what are some other risks or, or disadvantages that we should be on the lookout for with, with programmatic advertising?

Kate Holliday:

Well, certainly the first that comes to mind is, is ad fraud domain spoofing where you think you're getting a particular ad on a, a publisher and it's, it's not that published at all. It's, it's, it's a fraudster. So, but I, I do feel like with the fraud conversation, and I was talking about this earlier with someone in the industry, like where are the mass class action lawsuits with all of this ad fraud going on? Like, why have we not heard about this? There's all this money being made with fraud, but where is the money going? And it feels like you're chasing your tail. So all you can do, you look, you're never gonna get rid of fraud. The best you can do is mitigate fraud. Yeah. So we work with partners like a double verify to make sure that we're on the cutting edge of eliminating as much fraud as possible.

But the actors are always changing so rapidly and it's a problem that will always be out there. It's a persistent issue. Where we're seeing a lot of success with fraud mitigation is with supply path optimization. And with that it's s p o we're trying to eliminate as many middlemen and intermediaries between the publisher itself. So a Fox News and M S N and the, and Advertiser. This is where we're able to control, okay, we're gonna go directly to the publisher itself or we're gonna work hand in hand with a supply side partner, an S S P, like a magnetite to make sure they're getting the most premium inventory without, you know, a long tailed D S p a long tail network being in between.

Eric Wilson:

Alright. There's some, there's some some terms we need to break, break down there. So you talked about a supply side platform and a couple of other terms that I'd like for you to break down for our audience who might not be familiar.

Kate Holliday:

Sure. In digital advertising, a supply side partner and one of the biggest ones in market is Mag Knight. Freewheel is another one. They essentially bring together multiple publishers and house 'em under one roof. And so it's like going to a Walmart, you can go and you can get a variety of different socks, but it's all gonna be housed at Walmart. So Mag Knight is a, a partner that we work with that is able to gather all these publishers together and then we can choose what kind of publishers we want to work with. So we wanna work with publishers that we know accept political inventory. Okay. We'll work with them. We wanna work with publishers in a particular geo in the state of Georgia. So they just set up different package deals for programmatic advertising that you can take advantage of.

Eric Wilson:

So give us a sense of what is the, the scope of ad fraud and and how does that impact political advertisers?

Kate Holliday:

It affects political advertisers because unfortunately you're, you're wasting money. You're not getting that impression that you said was delivered. It was either to a bot, so not a real human that was watching or viewing that particular ad that you spent money on. Or it was, again, I said domain spoofing, your ad appeared on Fox News, but it wasn't actually Fox News. Mm. So it's, it's wasted money and it's an inefficient way to buy.

Eric Wilson:

Do we have any, any sense of, of how big this this problem is? Jordan?

Jordan Lieberman:

There was a study done I think was it by Hopkins Kate? We saw recently. So it's a, it's a, it's a rather large number. But I would say that you know, before you're getting into quantifying how much ad fraud, because I don't think we know exactly mm-hmm. <Affirmative> there's gonna be missed shots in any tactic. So TV's left on mailbox gets dumped robocall get ignored. So, you know, this is one tool of many. I, I don't think there is a specific number out there that's recognized as how much out there is being is going to fraud. It it varies quite a bit by the buying tools you're using. So if you're, so, as Kate mentioned, s p o or supply path optimization does reduce fraud or mitigate fraud. But there's, there's all kinds of think ways that you know, it's, it's really like whack-a-mole.

So there's a very well-known website out there where my friend, I actually have some friends working and they were blocked by DSPs because they were too conservative. Hmm. so what they did was they renamed themselves and I think Kate, that's Kate's getting into that with domain names moving. So there's, this is a, this is a constant fight. And again, that's where the experience comes in and, and figuring out how to rewire the internet or rewire the ad ecosystem so you're not relying on folks in the middle to give you the best inventory relying on ourselves.

Eric Wilson:

And so what can advertisers in this political space be doing to protect themselves from ad fraud? Explain that supply path optimization a little bit more. To us,

Kate Holliday:

We lovingly coined supply path optimization, farm to table inventory. And it is similar to that produce journey. So you have a beautiful tomato that is grown from a farmer and you go and you get it directly from the farmer at the farmer's market. So when we see, when we say this for digital advertising, we would go directly to the publisher itself. There would be no middlemen in between, and we would have that high quality premium ad impression that we're able to deliver. Typically, the supply path for digital advertising has been from publisher to some sort of s s p supply side platform to a network, to a long tail network. There's, you know, multiple stops around along this, this journey. And we wanna make sure that we are eliminating as many stops as possible because when we do that, we have this halo effect of better ad performance, better match rates.

'cause You're getting closer to the actual publisher source and we're seeing less fraud. So there's really this wonderful experience and effect of doing supply path optimization. And frankly, I, you know, it, it boggles my mind that more and more political strategists aren't focused on it in the way that we see consumer. These big holding companies, Eric Ss p o is, is in the contract, it's in the insertion order for each campaign that's launched. But when we with political, we feel like it's, it's almost an afterthought because they're relying so much on their digital partners to do it for them, and they're just not realizing that they're this many middlemen in between the Fox News publisher and the advertiser itself. So it's something that we have, have been banging the drum about and we're trying to bring awareness to because we are seeing better match rates across the board. We are seeing better performance specifically on display and pre-world video when it comes to sbo.

Eric Wilson:

Yeah. And then there's also the challenge of, of political campaigns where we go away on, on election day, win lose or draw. And there's, there's very little after action. And the way the money flows into campaigns, especially at the end is, look, we, we've gotta get it out the door. And so I think there is significant loss to, to advertising fraud. And it, it's, it's definitely something that the industry needs to, to look at. I I, I've seen some estimates that say it's as high as almost $400 million just in the political ad advertising space. And so it, it is something that as we're looking to <laugh>, you know, make our campaigns run more efficiently, make our dollars go further, this is one obvious area that we need to look at. So

Kate Holliday:

The study that Jordan was mentioning was from the University of Baltimore, Eric, and we see that marketers will lose $35 billion to digital ad fraud in 2020. So that's a significant number and this is a real problem.

Eric Wilson:

And then within the political industry, do, do they make an estimate there?

Kate Holliday:

377 million. Wow. In 2020. Yeah. It's a lot of money.

Eric Wilson:

And, and that's likely gotten higher. You're listening to the Business of Politics Show. I'm speaking with Jordan Lieberman and Kate Holiday from Powers Interactive about programmatic advertising in the political space. It seems like every cycle we face some new challenges between targeting and privacy. The, you know, the platforms and publishers are always changing their mind. What's the current landscape of data privacy and advertising and, and how is that affecting political advertisers this cycle? It's

Jordan Lieberman:

Not really new in terms of data privacy, but it's, it's kind of gaining some traction. So really what you have to do is look at two big major players. One is the states and two are the DSPs demand side platforms. So at the state level, there's about 7, 8, 9 states that are very aggressive in terms of regulating not just data privacy, but disclosure. And the reason I, I wanna group 'em together because everyone's, it's kind of a joint problem every, you know, a lot of the states don't really understand the difference between data privacy and disclosure. They're kind of mixing the two. But California has taken a lead on this, not, not as aggressive as, say, Washington State, which makes life really miserable for digital advertisers. If you have any digital advertising friends in Washington state, I'm praying for you <laugh> <laugh>.

But you know, there's, there's, there's a bunch of states. And I think and plus watching what's going on in Europe has been a real lesson for Americans in like, Hey, we really can't take advantage and go too far and make errors, or we're gonna have European level or even Canadian level privacy laws here, which make some of the things we do impossible. Right. Not only is that, is that an issue? It's, it's the enforceability, which is really tough. My favorite story about pri data privacy enforceability is it's doing a geofence project in Canada, which was iffy in terms of legal. And the, the client said, don't worry, they probably won't prosecute you. <Laugh> <laugh>, thanks. Right. but you know, we do, I mean, we've done work in Asia, Europe all over North America and America has the most free data privacy laws coupled with the most internet users.

So it's a really nice, we're kind of in that perfect dorm of really great place to do digital advertising. That said, data privacy is getting more and more attention. I think that people in our business are starting to pay attention. Eric, I don't know the last time someone emailed you a voter file, but I'm, you know, people still do it once in a while, they'll have to do a whole big thing about, you can't do that and here's what we're gonna do to delete that file and protect you. So people, I think all the way downstream in the, in the data space are learning that privacy matters. You know, and it's also important because it does prevent us from doing some of the things that you might wanna do in politics but can't. So collecting debt name and address information and then not, not wiping it the way you should, things like that.

And then the second player outside of governments are the demand side platforms. Dsps are typically understaffed when it comes to data privacy and regulation. So it often relies back on people like us to tell them, here's going on in the states. Hmm. And what I've found is the best way to engage with DSPs in the tech space and also with governments, is to answer their questions and be a partner, not an opponent. So in the world of, hey, having an off the record conversation with a regulator in any state really has benefited everyone. Yeah. it stopped bad laws from being made. It helps us, you know, control our own destiny and saying, this is something you should reg, reg regulate. This is something that's probably not worthwhile. Like the conversation I had with the state regulator last week about ai, for example, was along the lines of, Hey, you really, neither, neither one of us really care about parting rights of artists and copyrights, but we do care about DeepFakes. Mm-Hmm. So make sure you're legislating and regulating the, you know, ladder, not the the ladder, not the former.

Eric Wilson:

Another thing that we're seeing in the, the advertising space that I think is a particular challenge for political campaigns is more platforms and publishers are, are just simply not allowing political ads. I'm encountering it more often myself. And I'm, I'm curious what you think campaigns and, and political advertisers ought to be doing in, in that case, because we still gotta reach voters and if we can't reach 'em in, in some of these places, how, how do we get to them?

Jordan Lieberman:

It's infuriating. 'cause Some of the, the best known biggest publishers are really doing everything they can to discourage political advertising, even if they're not banned. I would argue that Facebook really doesn't want our political ads <laugh>. Like they, they're, they're dest staffing it. They are making life hard. They don't really want it. It's 50% of their headaches and less than 1% of their revenue. And, and the larger folks largely don't understand, you know, how to do this right? Because it is scary and there's a lot of people that scream, you know, big words at, at, at publishers and it's not worth the effort in any cases. How do we combat it as we explain to them, Hey, listen you're gonna make a bunch of money and we're gonna help you, you know, do this. Right. I don't really use the first ame, it, it doesn't, the first amendment really doesn't work here.

It's really about explaining the, the profit margin of accepting political ads and how, and, and protecting them against things that might give them headaches or, or trouble down the road. You know, we've seen, I mean, Hulu changed positions. Facebook's changed positions, Twitter's changed positions. You know, and the more places that you can advertise the better from, from an advertiser point of view because you get more reach. You know, the, the thing that you know, if, if a publisher doesn't wanna accept advertising, fine, that's cool. We'll see. We'll take our business elsewhere. But I will say the thing that's infuriating is when publishers are kind of gray about it and they accept certain ads, and I wishy-washy about certain issues. There's one, there's one network that I'm not gonna name because I do love them at the personal level. They've been really good to us in terms of service, but, you know, they, they allow certain issues but not other issues. And it's infuriating because it's, it's, you can make the case that any ad should be allowed or any ad should be banned and like, I just want, you know, clear

Eric Wilson:

Lines consistency

Kate Holliday:

With political, so fast paced, you're up and running, you know, within hours you don't have time. There are certain publishers we go to 'cause we just know their audit process will take so long that we don't even wanna, we don't wanna subject the clients to that. But I actually wanted to bring it back 'cause I think that this is interesting 'cause we were talking about privacy. Eric, are you, whatcha hearing about with clean rooms? Just in terms of data compliancy and politicals using these?

Eric Wilson:

I'll have to say I'm not too familiar with clean rooms.

Kate Holliday:

So in a clean room, data is anonymized and then transferred to a secure environment. We like these because it's a way to break walled gardens. It gives us access to see, okay, what was the audience reach in frequency on a Facebook versus you know, running on a Hulu. And it's a way that we can see the total big picture, but it's another place where data is completely secure and p i i compliant. So there's no personal identifiable information in it. And I do feel like there's more chatter about clean rooms, more and more of the cycle. I I do know that my friend Billy McBee, that SS l f is always loudly talking about clean rooms and how important they are and how political campaigns need to utilize them because we do need to have a big cohesive picture of what frequency, what audience reaches across these platforms that we don't have access to sometimes.

Eric Wilson:

One of the things that, I mean, you've alluded to already and we've tapped into is this, the online advertising industry itself is very complex, always changing. And so understandably it's difficult for, for decision makers on political campaigns to, to keep up. I, I myself can't even keep up with all of the the developments. So what advice would you have for political professionals who may not be experts in, in digital advertising? They know they've got a devote budget to it, but they wanna make the right decisions to make sure they're getting the most from their digital ad budgets.

Jordan Lieberman:

I think it's acknowledging that this is moving, kinda like you just have Eric, how this is moving so fast that it can be very dangerous to lose your shirt if you're not careful. So it is very important to work with someone who's been around for a while and has a reputation of being honest. That's the most important thing. There's so much change going on in the industry. You've got a whole bunch of large firms banding together, Axiom for one and g P three of course. And it can be very risky if you don't know what you're doing. Large players really just reaching in and doing a, being a little more aggressive than they should be. There's also the problem of margin compression when you're thinking about just how active this place is and how hard it is to see exactly what's being bought and sold. So trust and transparency,

Kate Holliday:

Listening to all my friends on, on the right and even on the left, there are some serious hiring challenges, especially for young hungry digital strategists. You know, fresh outta college, I, you know, I speak to my friends and they're just really having a hard time building out their staff, especially as we go into an election year. So I think there are some staffing challenges on the right and I think that the left doesn't really have the challenges that we do in terms of bringing in young people to work on a political campaign, but we see that sometimes on the right, even when we get into the presidential space. So I do think that's gonna continue to be an issue. And, you know, I even see, you know, data, again, bringing it back to data, it's vital. It's, it's part of every digital campaign, but there are some data segments, data components that are just not necessary and just superfluous when it comes to digital advertising. Just keep it simple.

Eric Wilson:

Pressing that a little bit further. You know, a lot of campaign decision makers may be, you know, uncomfortable asking hard questions or not even know the, the right questions to ask when it comes to measuring the effectiveness of their ads. What are some, some questions or metrics that decision makers on campaigns need to be looking at to make sure that they're, they're doing this effectively?

Kate Holliday:

Audience reach and frequency reach and frequency? That's the biggest k well the biggest K p i that we look at is delivery. Make sure making sure that we deliver in full because there are no extensions, there are no refunds in political advertising, as you just said a few minutes ago. So we're always focused on delivering in full. And audience reaching frequency are, are huge for us. 'cause We're always utilizing a first party list or some sort of voter file or a viewership data file. We wanna make sure that the audience is, is accurate, that we're getting a good match on it and that we're managing frequency and we're doing it responsibly across various screens or platforms.

Eric Wilson:

Got it. Well, my thanks to Jordan and Kate for a great conversation. There's a link to Power's Interactive website. In our show notes, you can read more about their work and some of the writing that they've been doing on programmatic advertising in the political space. If this episode made you a little bit smarter or gave you something to think about, all we ask is that you share it with a friend or a colleague and you look smarter in the process. So it's a win-win for everybody. Remember to subscribe to the Business of Politics Show wherever you get your podcasts so you never miss an episode. You can also sign up for email updates from the podcast on our website at business of politics podcast.com. Thanks for listening. We'll see you next time.

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