Ask 100 publishers what matters most in the current world of advertising, and there’s a good chance many, if not all, will mention programmatic. One of the biggest trends to ever grace the industry, programmatic advertising is at the center of modern digital ad sales.
When ads in newspapers and magazines were a primary source for advertisements, planning placements was a lot easier. But the digital landscape changed this, adding in significant complications for both publishers and advertising sales teams. With a plethora of advertisers and websites to choose from, it’s challenging to sell ad space individually and directly to advertisers in need.
Programmatic largely solves this problem, making it easy for publishers to fill ad spots and drive revenue with less manual effort. This is one of the many reasons why programmatic technologies are fundamental to meeting modern industry demands.
We will examine this further but let’s begin with educating ourselves on what exactly it is and it’s benefits.
What Is Programmatic Advertising?
Programmatic advertising is essentially an alternative to the representative-driven sales model heavily utilized in the past. Instead, advertisers use an automated and data-driven process that places ads based on demographic, contextual and end-user information across a wide variety of publishers with live availability updates. Programmatic is used across many different kinds of digital platforms, including video, mobile, native, and display advertising, based on both publisher options and campaign objectives.
In some ways, programmatic advertising serves as a blanket term for digitized ad placement but is most commonly used to refer to real-time bidding, remnant inventory sales, and open auctions.
Programmatic and Publishers
For some publishers, particularly those with a long legacy in advertising and a preference for an Insertion order (IO) driven ad sales model, the programmatic pill has been particularly hard to swallow. Regardless, a failure to take the digital plunge can mean losing out to the competition.
Estimates imply that as much as 90% of online inventory goes unsold every year, making competition steeper than ever. However, the mechanics of programmatic make it far easier for publishers to maximize opportunities.
Programmatic has a lot to offer publishers, including:
- A simplified mechanism with which to sell advertising space
- Excellent collaboration opportunities between advertiser and publisher
- User relevance due to the demographic targeting capabilities of programmatic placement
- Fast and efficient sales and placement, increasing publisher margins
With plenty of publisher benefits and a range of different opportunities, publishers have every reason to wholeheartedly embrace programmatic.
Why Programmatic is Necessary
There are a few aspects to programmatic advertising that makes this technology absolutely essential for publishers. These include programmatic direct, real-time bidding, and reporting opportunities.
Programmatic direct also referred to as programmatic premium, is an ad sales avenue in which direct deals are brokered between sellers and buyers without ad exchange parties. Under this model, the specific ad-buying system isn’t important; instead, programmatic direct relies on the connection between buyer and seller through any kind of ad-buying system. In 2018, programmatic direct accounted for a whopping 58% of digital ad spend.
Through this model, programmatic deals can be brokered through private auctions, preferred deals, and guaranteed & non-guaranteed deals. This kind of deal usually includes a fixed number of impressions, a set delivery timeline, and a preset price – a great opportunity for advertisers and publishers alike.
Real-Time Bidding (RTB)
Real-time bidding is among the most valuable tools within the programmatic advertising environment. Also known as RTB, real-time bidding uses real-time buying and selling of ad impressions through auctions that occur in the split-second it takes for a website to load. This guarantees on-demand placement, putting ads in front of the right eyeballs at the right time.
Prior to the implementation of this model, it was very challenging for publishers to improve their ad fill rates due to the complications in placing ads. However, RTB has changed this, ensuring that placement can happen in the blink of an eye rather than after laborious deals and back and forth communication with ad sales representatives. This yields greater ROIs as well as higher CPMs.
Historically, reporting has been a challenge in the advertising space. In the days of newspapers and magazines, the only analytics available were limited to subscriber numbers. However, programmatic advertising has revolutionized reporting for both publishers and advertisers, allowing participants access to real-time insights into relevant metrics, from impressions to results from each individual auction.
With elevated reporting opportunities, publishers can better evaluate the deals they’re making, the ad procurement practices in use, and the outcomes of each individual campaign. This can inform future decision-making, empowering publishers to pursue the best possible deals, regardless of marketplace.
To summarize it can be said that programmatic advertising will not address all the challenges facing the advertising market, but it’s a major component of modern digital ad sales. With the ability to place ads in next to no time, maximize ad fulfilment, and open doors to new and diverse advertisers, there’s a lot to love about programmatic advertising. For publishers not already embracing this technology, now’s the time to shed traditional behaviors and embrace the evolving position of the industry.