Contributed by Julian Sonego, CMO of Adslot
Much has been written about digital publishers moving to trading-style ad platforms, utilising real-time tech to streamline how impressions are individually bought and sold. This is great news as it illustrates that years of talk about improving processes between media buyers and owners is finally bearing fruit. However programmatic solutions come in many flavours and one approach will not typically scale across all sales channels, where buyer requirements can vary widely.
Generally speaking there are two types of programmatic models; programmatic direct and real-time bidding (RTB). They both solve the same set of broad problems in simplifying transactions, increasing yield for publishers and helping advertisers reach their audience more effectively. The fundamental difference is that Programmatic Direct, as the name implies, handles direct sold, guaranteed inventory which can only be sold in a forward market and not in a real-time auction environment.
Programmatic Direct automates the manual processes managed by sales teams. It differs to real-time models in important areas such as pricing control, where publishers set the sale price (different to a floor price), transparency over an ad’s page placement, ad quality controls where publishers can reject advertisers before going live and impression volume guarantees which give advertisers confidence and publishers predictability over revenue. These elements are the “known knowns” of Programmatic Direct: known price, known publisher, known placement, known dates, known advertiser and known volume. And significantly, any advertiser can access inventory sold via a Programmatic Direct platform.
The certainty and brand safety from these known knowns attracts a price premium from advertisers. Right up until the last day where, if unsold, publishers can then trade the impression in a real-time auction to advertisers bidding via Demand Side Platforms (DSPs), complete with cookie-based audience data to make each impression more attractive.
Publishers like eBay Australia employ this two-tiered model, providing the opportunity for thousands of their merchants to purchase premium, guaranteed ad products targeting categories that can be self-served through Programmatic Direct while offering granular audience targeted inventory through private marketplaces operated via RTB.
However large the strides we’ve made, we’re still in the first inning of the evolution of programmatic buying. As Programmatic Direct’s planning tools mature to include richer audience targeting capabilities, it will become an even more attractive proposition to media agencies and large advertisers. Not only will a simple and efficient channel to guaranteed inventory exist, but its planning, buying and execution will leverage the strengths of combining context and audience targeting in a single buy. This is where campaigns outperform, when brand and performance requirements are not only balanced, but work together.