programmatic buying
JANNEKE NIESSEN CIO, Improve Digital, The Netherlands
How is programmatic advertising helping media owners?
Real-time bidding and ‘programmatic’ media sales help media owners and marketers connect more efficiently. Media owners use programmatic advertising to access the considerable market demand beyond the reach of their ‘direct’ sales team. Experience in this field has proven that this truly is an additional channel to sell advertising space. Solution providers like Improve Digital provide the technology and services media owners need to tap into this marketplace, monetising their inventory and audience, while allowing them to maintain full control over who can access the inventory and the price at which it can be sold. Among the many benefits for publishers and media owners, programmatic advertising offers a process that is effective and efficient at reaching advertisers, reducing paperwork and the strain on internal teams. This brings down the cost of sales for media owners (improving margin) while freeing up their sales teams to focus on enhanced customer service and higher-value sales of strategic, premium, and non-standard products and packages. And evidence shows that RTB eCPMs are increasing, indicating agencies are prepared to pay premium prices in an automated environment. This highlights the advertisers’ demand for greater efficiency and reinforces the core value of publishers’ first party data, consumer access, quality content, and intimate audience relationships.
what challenges does programmatic present to media owners?
Improve Digital recently conducted research into UK publisher views on the programmatic market, and we’re rolling out research into Germany and The Netherlands this spring. Our research showed that old habits die hard, with the main resistance to change being structural. Some publishers are locked in a fear of cannibalising their direct sales channels and compromising the considerable value created by their direct sales teams.
fipp.com
These fears are not unfounded, but with the right solutions for market segmentation and sales channel management, the risks quickly fade away. At Improve Digital, we deliver technology that allows media owners to manage and control their yield impression-by-impression, protect their precious audience data, and maintain advertiser blocklists (controlling who can buy what inventory via which channels). Further, publishers can set price floors for certain higher-value placements that are pushed out via automated sales channels, ensuring ‘direct sales’ pricing is not undercut and that advertiser quality remains high. Ultimately, the media sales environment is becoming equal parts art and science, marrying the traditional sales, pricing, and packaging skills of the publisher with new technologies that streamline processes, provide access to greater demand, and reduce the overall cost of sale. Media owners are embracing the fact that they now can (and always should) keep control of who buys their inventory, at what price, and through which sales channel.
is rtb destroying the ethos of selling a brand?
Not at all. What we are witnessing is a revolution in digital media – the market is becoming data-driven and highly automated. Advertising’s goal of connecting consumers
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custom solutions to reach their goals. Ultimately, programmatic is just about
making the process of buying and selling easier and making audience targeting more precise, always ensuring – for buyer and seller – that the right ad is placed in front of the right person, at the right time, in the right place, and for the right price.
how has the service evolved recently?
The biggest change in is how leading publishers are adapting it to their own needs and, in some cases, modifying their go-to- market strategy to take full advantage of the sales efficiency and market access it can enable. Most still think of programmatic as a ‘remnant’ solution, the evolution of the ad network and exchange. That is no longer the case today. Programmatic is becoming a strategic channel and is taking a role up and down the publisher’s ‘yield stack’. Most publishers work with a private
Evidence shows that RTB eCPMs are increasing, indicating agencies are prepared to pay premium prices in an automated environment
with brands will never change, but we are now able to start retiring fax machines and hand-written IOs. Against this backdrop it would be entirely unrealistic for premium direct sales and the importance of brand to be diminished in the least bit. Brand, in fact, cuts two ways. One, the
brand of the publication in which an ad appears will always matter. You need only compare the relative value of the FT with an amateur blog about the finance industry. Similarly, brand advertisers are, first and foremost, building a relationship with consumers, and how/when/where they reach them matters. There is almost always important interplay between advertising and content – think about a Nike ad within a premium football publication. That premium environment matters to Nike as much as the ad placement and audience reached. At the same time, by reducing the amount of operational work, sales teams have even more time to engage with brands to work on
exchange where they have full control who is allowed to buy their inventory and audiences against what price. In addition to the private exchanges, publishers often setup Deal-id’s/ Private Market Places to provide selected buyers with additional possibilities to buy certain ad sizes and formats (e.g. take overs/expandables), provide additional data against a higher price or any other agreement that is made. This is a great example of where processes are automated but sales are still key. The publisher sales team closes the deal with a buyer but the execution is done by the automated platforms. You can imagine the unique opportunities this might provide in supporting short-term highly-competitive sales of some of the publishers most premium inventory - or be used in managing ‘upfront’ sales models like one sees in the annual broadcast advertising sales process. While this may sound advanced, it’s actually a pretty fundamental channel management practice, and, as noted before, one that is here to stay. We see the most significant aspect of
programmatic’s evolution in how it is creating new sales channels and, ultimately, giving publishers direct access to even larger pools of advertising spend than ever before.
will it become a permanent part of publishing?
Put simply - yes. A 2013 eMarketer report revealed that RTB digital display ad spend will grow from US$1.9bn in the US in 2012, to $8.5bn by 2017. And as a percentage of total digital display ad spending, RTB will grow from 13 per cent in 2012 to 29 per cent by 2017. We are seeing explosive growth in Europe ourselves. At Improve Digital, we have experienced 68 per cent growth in programmatic revenue over the past six months alone. This rapid scaling is positive proof that programmatic sales are durable market trends and are reshaping the media landscape.
issue 81_2014 | Magazine World |25
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