Dive Brief:
- Belkin International, the electronics firm known for Linksys routers among other products, announced it is reducing programmatic advertising spending from 20% of its budget to 10%.
- The main reasons for the shift in its digital ad approach include lack of visibility into where automated ads actually appear, how the ads render on websites, and the actual cost of those ads, according to Kieran Hannon, Belkin’s CMO.
- Hannon stated, “There are too many unknowns.”
Dive Insight:
Programmatic ads, due to being automated, offer some level of marketing simplicity and cost benefits, but there are also issues. Belkin International took a look at those issues and decided to cut its programmatic spending from 20% of the budget to 10% based on what CMO Kieran Hannon described as "unknowns," such as lack of visibility into where automated ads actually appear and actual cost of those ads.
Even though some marketers like Belkin have concerns about programmatic, spending in the space is expected to grow by almost 50% this year in the U.S., accounting for 55% of the digital display ad market according to eMarketer.
Belkin intends to spend more of its “tens of millions” in annual marketing budget on premium publishers and in creating ads that are site-specific. One example is a video ad created specifically for Hulu called “Wheel of Death” that extols the virtues of Belkin’s Linksys home router and how it can provide a better streaming experience for users.