Digiday’s State of the Industry Studies reach out to literally tens of thousands of senior, professional, digital media and marketing professionals. This particular question – essentially, can “Programmatic and Premium” co-exist in today’s ad market – was met with high interest; more than 800 of you participated, so thank you. Given this wide reach, we were either lucky enough (or good enough) to achieve astonishing parity among both buyers and sellers who participated in this survey. 71 percent of BOTH our Publisher and Advertiser/Agency category said they had engaged in programmatic buying or selling. (We didn’t ask media traders – DSPs, SSPs, Exchanges, and Networks that question because the assumed answer would have been 100%).
When it comes to programmatic’s effect on publishers’ revenues, a bit over half say that it is UP an average of 21%. A minority see revenues down 19%, and 37 percent see no change. Successful publishers – even those who are only moderately successful – will pursue success from programmatics, increasing inventory available to programmatic trading more or less in line with revenues. Those that aren’t seeing revenues from there efforts may in fact withdraw some inventory from circulation. This is something advertisers and their agents need to think about going forward. If you muzzle the ox who grinds the grain, your bread will have holes in it.
Interestingly, roughly the same number of publishers who predict a rise in their commitment of inventory to programmatic selling say the only inventory they commit to a platform rather than a pitchman is non-guaranteed or REMNANT inventory. But, looks can be deceiving. Premium inventory is actually included in just under 44% of publishers who sell their inventory programmatically. A very small percentage of publishers appears to be exploiting machines for just premium inventory, probably in the form of a private exchange.
Ask to choose from a list of what defines premium inventory, 2/3 say it’s either custom or guaranteed.
Half say slight decrease or none at all. 1/3 say increased somewhat or increased dramatically (expanding the circle)
Other: perceived and subjective content quality - ie NYT digital vs. lolcatzQuality of the publisher overall i.e. brand name that is associated with quality
Programmatic + Premium: Current Practice & Future Trends Digiday Publishing Summit, March 18, 2013
Both Buyers and Sellers are Committed toProgrammatic Ad Trading• 71% of Buyers and Sellers in our study are “Doing It”
71% of Both Buyers and Sellers Trade AdsProgrammatically 41% Digital Publishers 71% % of Total 31% Respondents Media Buyers 71% % of Group that Trade Ads 28% Programmatically Media Trader / Intermediary N/A *843 Digiday respondents over 2 weeks inJan. 2013
What we found:• Both publishers and buyers are committed to programmatic trading.• Publishers and buyers are using all channels to sell/buy online ads – and some achieve markedly better success than others. Overall, the percentage of display revenue to the whole is small, but poised to grow by double digits in the coming year.• Neither side thinks the current system is perfect• Even with these challenges, both publishers and buyers plan to invest more in the year ahead than they did in the past 12 months
What we found:• Publishers, as well as buyers, are trading both non-guaranteed and guaranteed inventory programmatically, but “Programmatic Premium” is a term more familiar to sellers than buyers.• Publishers need the right technology foundation in order to engage in programmatic trading. Of those publishers who engage, in programmatic selling, 81% report they use an ad server that has exchange capabilities integrated into the platform.• There are elements of the traditional direct sales process that publishers feel can be replaced programmatically, including insertion order workflow (68%), billing/ reconciliation (60%), and optimization (59%).
What we found:• Neitherpublishers nor buyers want to give up their personal relationships and the benefits they engender.• There is some work to be done before publishers feel good about programmatic selling – they see themselves at a disadvantage. Encouragingly, many buyers acknowledge this fear and are concerned about this perceived imbalance adversely impacting programmatic trading.• Also encouraging: both DSPs and SSPs recognize these fears and appear willing to evolve to provide publishers as well as buyers the protections they desire.
Of the Publishers NOT Currently TradingProgrammatically, 30% Will Within the Year Series 1I dont know 38% No 33% Series 1 Yes 29% 0% 10% 20% 30% 40% While the majority needs to be convinced.
And most newbies will move beyond“remnant” once they commit Together, theGuaranteed / Mix 18% 21% 14% combination > Remnant (53%) Premium Both No DifferenceNon-Guaranteed 46% /"Remnant" 0 0.1 0.2 0.3 0.4 0.5 0.6
For Publishers Who’ve Made the Leap, theAMOUNT of Programmatic Inventory is low• 48% trade 1-10% on PRIVATE exchanges• 34% trade 1-10% on OPEN exchanges• 31% trade 1-10% on Ad nets, etc.
But, taken together…• Publishers as a group are using every kind of programmatic channel available to them, even if it’s only a little to test.
There’s a wide swath of “middle of the roaders” for whom programmatics pay the bills• 96% of respondents have a direct sales force; the largest group of these say direct sales accounts for 61-70% of sales.• 44% of digital publishers’ direct sales are spread evenly between 40%-80% (a wide swath of “10 percenters” across this broad range)
Pubs: How much more/less inventory isprogrammatic NOW vs. a year ago? Column1 Somewhat More 37%Substantially More 29% No change 24% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Going forward:Anticipated INVENTORY contribution: – 21% Predict it will fall an average of 19% – 21% Predict no change – 58% Predict it will rise an average of 25%
Publishers: Comparing REVENUE with likelychanges in inventory AVAILABILITYYear over year REVENUE contribution: – 8% Down an average of 19% – 37% No change – 55% up an average of 21% (answers ranged from 1%-200%, 10% most common answer)Anticipated INVENTORY contribution: – 21% Predict it will fall an average of 19% – 21% Predict no change – 58% Predict it will rise an average of 25%
Publishers: How much of your programmaticinventory is… Series 1Non-guaranteed inventory / Remnant 57%Both Guaranteed & Non-guaranteed 35% No Distinction 6% Guaranteed / Premium 3% 0% 10% 20% 30% 40% 50% 60%
How Do you DEFINE Premium Inventory? Series 1 Custom inventory (e.g. 68% sponsorships)Guaranteed inventory (e.g. inventory 66% held in reserve) By section (e.g. home page) 52% By context (e.g. most popular 50% content) By audience segment 41% By ad unit type (e.g. leaderboards) 34% 0% 10%20%30%40%50%60%70%80%
Comment:• High ecpm inventory• I define "premium" as above-the-fold placement(s) on engaging content pages.• above-the-fold• All the above• the word premium is nonsense, only a pricing indicator for publishers, there is simply high value and low value inventory based on what value you add to the advertiser
Familiar with “Programmatic Premium”? Series 1Yes 57%No 43% 0% 10% 20% 30% 40% 50% 60%
How do YOU define “Programmatic Premium”? “Baloney from exchanges.” “Nonsense, a term coined to persuade publishers to move into automated.”
Definitions, Summarized• Involves means, access and audiences• Uses automation or technology, typically via exchange or “machines”• In real time• Informed by data, and pre-defined terms, either regarding price or a “guarantee” involving the inventory’s placement and/or delivery timeframe• It implies quality, premier placement and results• Buyers may be the ones best able to define it• At the end of the day it has to benefit every one to work
…OrAs One Publisher Put it:• Programmatic premium is good for both advertisers and publishers. Marketers can serve the right message to the right consumer, reducing waste and improving returns on their guaranteed media investments.
Does your ad server integrate exchangecapabilities into the platform? Series 1Yes 81%No 19% 0% 20% 40% 60% 80% 100%
If Yes, are you more or less likely to engage inprogrammatic selling as a result? Series 1More likely 62% No impact 33% Less likely 5% 0% 10% 20% 30% 40% 50% 60% 70%
If No, how likely are you to convert to an adserver that accommodates programmatic orexchange selling within the next 12 months? Series 1 Highly likely 35%Somewhat likely 35% Series 1 Not at all likely 29% 0% 10% 20% 30% 40%
Preferred ad-technology solutions (top 2choices averaged) Series 1 Yield optimization 88% Reporting Insights 87% Set price floors by buyer or segment 79% Transact directly w/terms 76%Manage guaranteed and non-guaranteed 74% Content optimization 73% Sell inventory in real-time markets 68% Overlay audience data 67% Screen out certain buyers 58% 0% 20% 40% 60% 80% 100%
Elements of traditional direct sales processthat can be replaced programmatically? Series 1Insertion order workflow 68% Billing/Reconciliation 60% Optimization 59% Trafficking 52% Price Negotiation 36% Ad quality review 25% None of the above 6% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Publishers Want Control Over Pricing, Relationships Series 1 Controlling CPM / Pricing by advertiser or segment 75%Maintaining direct relationships with advertisers / buyers 67% Controlling ad quality / brand safety 66% Setting different deal terms for advertisers / buyers 54% Predictable volume / revenue guarantees 54% Blacklisting / whitelisting advertisers / buyers 47% Maintaining data security 47% None of the Above 4% 0% 10% 20% 30% 40% 50% 60% 70% 80%Q: What would lead you to sell more premium inventoryprogrammatically? (Please check all that apply.)
What else would impact programmatic selling?• More demand• Competitive CPMs with direct sold• Seeing an increase in net CPMs flowing to the publisher.• [Better] margins• Getting higher prices from current remnant sources, which weve been unable to achieve via programmatic selling.• Im interested in learning about programmatic selling.• Building out our capability• I am currently prohibited from doing this well because I use DFP through WordNow. Once I move, there should be more opportunity
Bottom line: In its current state, doesprogrammatic selling benefit buyers andsellers equally? Series 1 No 45%Dont know 30% Series 1 Yes 25% 0% 10% 20% 30% 40% 50%
Who DOES Benefit?• Buyers “win” hands down: – As a premium publisher [I believe] the advantage goes to the advertisers that are buying our inventory at below market rates. Until the eCPM starts climbing to match direct sales eCPM the advantage will never be to the seller. – Buyer, currently. Theyre calling the shots on price, and you play the game or dont get the volume. Buyers are biased too much towards audience and not enough towards context. – Benefits buyers more, because it allows them to use their 1st- party data to identify valuable audience and buy it cheaply -- because the seller does not know the value. – buyers are benefiting more, as they are able to get massive reach on top sites for bottom dollar. meanwhile, publishers are playing catch up & struggling to optimize the balance between direct sales & programmatic buying in their yield strategies, & in particular trying to limit cpm erosion.
Who DOES Benefit?• Publishers… for now – At this point, publishers have more leverage as they hold back inventory from these new platforms. But, that will change. It depends… – I think that publishers with premium inventory need to make sure they can still command a price closer to premium than public. Buyers need to know the benefit of this. – The sell side still doesnt have the insight, controls and automation to really optimize yield and manage an integrated direct/indirect strategy.
Nearly all buyers still buy direct…Butsubstantial inventory is going programmatic• 97% of buyers do still buy media directly from publishers, or through an agency, but nearly 60% say this accounts for less than half their inventory.• 84% of buyers have bought from a private exchange – but greater than 70% of these buyers say this accounts for less than 10% of their purchases.• 91% of buyers buy on open exchanges and 93% from networks or other intermediaries. They think they’re buying as much as ¾ of their inventory from both networks and programmatically through exchanges – though this obviously can’t be true for both channels.
Nearly 80% Say They’re Buying More InventoryProgrammatically Than Last Year Series 1 Somewhat More 47%Substantially More 30% No Change 18% Somewhat Less 4%Substantially Less 1% 0% 10% 20% 30% 40% 50%
How Has Programmatics Affected Buyers’Digital Spending?• 51% see an increase of 14%• 47% see no change• 2% see a decline of 17% More than half of digital ad buyers say they’re spending MORE because of programmatic buying.
In the Coming Year, Programmatic Spending Could Increase 30%• 86% of buyers say they’ll increase their programmatic buying over the next year by an average of 31%• 15% of buyers say they’ll likely decrease their programmatic buying over the next year by an average of 21%
Buyers Aren’t Shopping for “Remnant”Inventory Guaranteed / Mix 18% 55% 16% Guaranteed Both Guaranteed & Remnant No DistinctionNon-Guaranteed Inventory 12% / Remnant 0 0.2 0.4 0.6 0.8 1Q: What kinds of inventory do you buyprogrammatically?
Publishers, Rejoice…• 70% of buyers would rather buy “premium” inventory direct than programmatically.• WHY? – Confidence, Control, Customization, Creativity, Collaboration, Contextual Relevance – Human touch, direct relationships – MORE efficient pricing, and – “Because much of the premium inventory is not yet available to buy programmatically”
Why Deal Direct?• Ability to more custom creative/programs that take advantage of the publishers unique position and relationship with their audience. We only work with publishers in this capacity that have such relationships.• Able to include custom inventory and sponsorships• Added visibility and transparency• Because much of the premium inventory is not yet available to buy programmatically• Better control• Better integration opportunities• better placements and more control over frequency• Better placements...better tie in deals with other media (print, tv)
Why Deal Direct?• Bigger brand experiences• brand safety, brand value• confidence in delivery, quality of publishers• Control over specific placements tends to produce more quality engagement• Customization, Ad Format Choices, etc• define premium though. what is premium? premium that has a higher conversion rate for DR or is it premium because it is more expensive??• depends on the channel and other opportunities, but its more contextually relevant
Why Deal Direct?• Direct relationship, want to ensure best pricing, want to ensure dedication to managing the buy/customer service.• Feels safer• for specific sponsorships/placements generally a more custom solution that requires more sales support• High Impact ad units• I feel like there greater control and pricing flexibility as well as more creative options.• I work in LatAm, where data market is immature. Publisher targeting is often the highest quality data we have.• If we know it works and exchange supply is low• it depends on the brand objective and metric
Why Deal Direct?• Maintains direct sales relationships Many times, premium inventory requires custom build, something that requires a human touch and direct relationships• Media promotions, editorial integration, and account management• Monitoring ease and guaranteed target alignment• more comfortable with exact placements from publisher• More confident in the inventory my client will receive• More control of where you run.• more direct control over the ad experience• More efficient pricing• More trust with direct pub than exchange
Why Deal Direct?• Premium Space (i.e. Sponsorships) require collaboration between the agency and publisher teams. Therefore is not valued as just "real estate".• pricing & control• Pubs are also now layering data at efficient rates plus guaranteed content• quality-sensitive clients• Satisfies the media strategy• security reasons• Seems more reliable at this point• Sense of security
Why Deal Direct?• The ability to develop custom programs• This depends on the clients objectives.• To ensure a guaranteed placement or volume• Transparency and custom integrations• Transparency and trust• Trust when we buy premium we usually attach more to it - rich creative, specific placement and audience combinations, custom elements, etc. that are usually better handled person-to-person instead of programatically• Why not? In this case it is still streamlining operations. And if you can do it on an ongoing basis, even more efficiency.• Yes for sponsorships or out of the box ideas
Why Buy Programmatically? Difference inPerformance? Series 1Programmatic performs better 35% Not Sure 31%Direct Buying Performs Better 19% No Difference 16% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Define “Premium” Inventory Series 1Custom inventory (sponsorships) 79% Guranteed inventory 72% By Section 56% By Context 43% By Ad Unit Type 27% By Audience Segment 26% 0% 20% 40% 60% 80% 100%
Other Definitions of “Premium”• higher quality content• Top tier sites instead of long tail sites• It really could be all of the above - whatever the key targeting criteria are combined with the media tactics, where those things come together are "premium”• I dont think there is such thing as premium. its a phrase publishers and exchanges alike like using to inflate CPMs, raise floor prices. premium is a kind of inventory that offers more information than other which then leads better buying decisions i.e Im willing to pay £3-7 CPM for that inventory because of the wealth of information (this will probably result in conversion as well)• Above the fold, first impressions, known publisher• Placement, clutter, content quality• all of the above, situationally• Any kind of fully integrated, native sponsorship or advertising program. Typically, these are done on a publisher by publisher basis.
Familiar with “Programmatic Premium”? Series 1No 60%Yes 40% 0% 10% 20% 30% 40% 50% 60% 70%
Buyer Perception of “Programmatic Premium”• Guaranteed: Sites, placements, audience, date/time• Brand -- the publisher-- matters and may be the negotiated seller• Exchange or DSP facilitated -- could be private Involves discovery: "Defining audiences and objectives then system mathes premium publishers who can get to those audiences"• Quality -- not "run of site junk"• Accountability, e.g. "defined data points"• Convenience: "No longer needing insertion orders to obtain premium inventory from publishers. Usually a set floor price or minimum number of impressions to buy in a month."• Preference: "premium is first pick of inventory on sites and programmatic premium is second pick"
Detailed Responses: “Programmatic Premium”• A guaranteed, selective site list where you know you will be served• a premium or direct buy, leveraging audience targeting to define and measure and negotiate against true audience reach• Ability to buy "premium" inventory (ie guaranteed, rich, by specific position and run date) via an exchange.• Ability to buy premium inventory through an exchange.• Access to either non-exchange inventory or guaranteed inventory.• Simply inventory that is not offered in the open market.• Audience buying that occurs on premium sites that have strong composition of our demo• Brand recognized purchased through automation usually including audience data
Detailed Responses: “Programmatic Premium”• Buying inventory such as video through DSPs or exchanges.• Custom targeting or sponsorship purchased on a trading platform• Defining audiences and objectives then system matches premium publishers who can get to those audiences.• Buyers and sellers negotiate through the platform. Buys are then executed like a direct buy, with delivery monitored against the desired audience and objectives.• Guaranteed above the fold inventory• Guaranteed placements by publisher• Guaranteed Programmatic Impressions• high quality, first tier placements on top publishers with guaranteed inventory• I assume it means being able to buy premium invnetory but in a similar fashion to curent programmatic (non guarenteed) buying
Detailed Responses: “Programmatic Premium”• I equate it more to a private exchange. It isnt run of site junk, its likely unsold inventory in better locations (above fold - section 1st pages etc.).• Inventory on private exchanges that come with defined data points• Inventory that has more structure around it (limited types of sites or specific site categories) but is still purchased programmatically vs. direct.• inventory that is allowed to carry some level of restriction/selection• Inventory that is guaranteed by date, time, and location, that you can purchase and execute through a programmatic platform like a DSP.• it defines itself.• it is using programmatic tools to execute a "premium" program, that is often, but not necesarily negotiated outside of those tools• n/a
Detailed Responses: “Programmatic Premium”• No longer needing insertion orders to obtain premium inventory from publishers. Usually a set floor price or minimum number of impressions to buy in a month.• Pre-selected or guaranteed content with data driven audience layers for impression decisioning• Premium advertising you are able to buy in a programmatic fashion.• Premium inventory available through exchange• Premium inventory not available on public exchanges that can be purchsed programmatically via direct publisher relationship.• Premium inventory that is set aside by the publisher but sold through an exchange, typically as a subset of the overall inventory or through a private publisher exchange.
Detailed Responses: “Programmatic Premium”• Premium inventory within programatic (non human) buys.• premium is first pick of inventory on sites and programmatic premium is second pick• Programmatic buying that uses additional criteria such as safe content, specific publishers, guaranteed inventory, or enhanced controls over delivery (R/F/or Visibility are ex). These criteria typically yield a higher price per contact, hence "premium"• Publishers open up premium inventory (sponsorships, premium sizes, etc.) to be purchased via real-time bidding.• purchasing premium inventory through perhaps a private exchange, allowing this inventory to be added to our overall frequency structure and comprehensive platform.
Detailed Responses: “Programmatic Premium”• Purchasing top placements through networks and exchanges not directly from publishers.• Refers to premium environments where we can reach audiences.• Restricted programmatic selection• Securing space on premium publishers in highly visible content (homepage, etc.) just purchased through programmatic platforms instead of direct. top tier sites• Using data and programmatic techniques to purchase user-targeted impressions on specific Web sites or channels
What would lead you to buy more premiuminventory programmatically? Series 1 More data to inform bids 68% Exposure to inventory not currently 67% availablePreferred access to inventory ("First 57% Look") Maintain or expand direct buying 39% relationships More easily negotiate direct buys 29% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Other factors…• premium buys go beyond automation, so anything mentioned in this question would help us buy more premium ads programatically• transparency, trust and client needs• Transparency• transparency and ability to optimize by publisher• better conversion rates• all of the above
How likely are you to replace your direct publisherrelationships with programmatic ad buying? Series 1 Depends on successwithprogrammatics over next few 34% years Not at all likely 30% Somewhat likely 27% Highly likely 8% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Why “Highly Likely” to Displace DirectRelationships?• This is the future of advertising; pulling together media planning .• If 100 publishers called me in a week (not unusual) I bet fewer than 5 have something unique or different to say.• We have better data on what drives the client business results vs publishers• More efficient operationally• In LatAm, we have lots of forms of indirect buying. Programmatic buying will first take over the other forms of indirect before treading onto direct territory. DSP Programmatic will though take share from large platforms like FB and Google this year.• we need to keep on building better supply, more data seeding, and better metrics• we have purposely developed no direct publisher relationships
Programmatic buying impact on the number ofpublishers / suppliers for your campaigns? Series 1 No change 27% Decreased Somewhat 24%Increased Dramatically 18% Increased Somewhat 17% Dont Know 7%Decreased Dramatically 6% 0% 5% 10% 15% 20% 25% 30%
Which Exchanges Buyers Use• “All of them,” 95% of them”, 30+, DSPs manage this (20 responses) – “we don’t tend to buy exchanges individually.” – “we use the agency trading desk. The exchanges that participate are blind to us…assumption is it is most if not all of them.”• Custom Exchanges / DSPs – Appnexus, InviteMedia (9 mentions each)• DSPs like TURN, AOD, Cadreon, Criteo, Xaxis, DataXu, GroupM; Network DSPs like RocketFuel – TURN (10), Xaxis (5), MediaMath (4), Vivaki’s AOD, DataXu (3 each); RocketFuel (3)• Private / Dedicated exchanges – AOL, Bing, Yahoo, Facebook, Google ad words, Microsoft *75 responses
Which Exchanges Buyers Use• Actual Exchanges (# of mentions) – DoubleClick (10), Adx (6), Google (5), AdMeld (4) – RightMedia (10), Yahoo (2) – OpenX (11 – Most popular independent) – Rubicon (9); Pubmatic (7) – Faceboox Exchange / FBX (6), Microsoft 4, Bing (1) – Adap.tv, AdBrite (3 each) – Accuen, Brightroll, SpotXchange (2 each) – AOL, Brand Exchange, CDX, Chango, Collective, Lijit, Max, Mbuys, MIM, Mojiva, Mopub, Nexage, Orange, Pointroll, Pulpo, Pulse, Taobau, Where (1 each)• Marketing analytics, data, platform facilitators (some blurring of the lines here) – Datalogix, Mediaplex, MediaOcean, X+1 (1 each) *75 responses
In its current state, does programmatic sellingbenefit buyers and sellers equally? Series 1Dont Know 44% Yes 38% No 18% 0% 10% 20% 30% 40% 50%
Who DOES Benefit?• 58% said Buyers benefit more: – Buyers as the sellers are likely receiving lower CPMs per impression, depending on the sell-through rate of direct buys – Buyers benefit more because exchanges do not provide enough tools for publisher balance – Currently buyers benefit more as they bypass direct sales and obtain low CPMs however as publishers get better at selling programmatically premium inventory will command rates consistent with the value and reduce the need for direct sales – It benefits buyers more than sellers. Until publishers wise up and stop creating ad avails, their inventory will continue to be undervalued. Less inventory means more quality to the exchange. Greed is keeping the price low for buyers. – it benefits buyers. not because it cant benefit sellers, but because sellers just havent figured out how to use it to their benefit yet, as the benefit for buyers is directly in the buying activity, while the benefit for sellers is less direct, more in the information and data management side, which is less easy to leverage quickly. – It causes the sellers to have to give their premium placements away if I know I can buy it through the exchanges. Publishers need to stop selling their premium inventory on the exchanges where I can pick the publisher if they are wanting to sell direct at a higher cost.
Who DOES Benefit?• 58% said Buyer benefits more: – It greater benefits buyers as sellers will need to move quickly to adjust their models for them to continue to be competitive and keep up with trends. – Right now, it is a buyers market and likely to remain so as inventory is essentially endless. As buyers become more advanced in understanding what they are buying, they are likely to become more demanding in what they buy (lets face it - almost nobody is doing really advanced tracking and measurement with RTB today, flat CPA, CPC, CTR. These are not good metrics). I believe this will benefit "quality" publishers (ie NY Times, etc). – sellers have less control over content of ads – its a great time to be a programmatic media buyer – There are not yet enough buyers of programmatic ads to form the market pricing. Exchange buying is unrealistically cheap today. That will change as more buyers move to programmatic tools
Who DOES Benefit?• 26% said Buyer benefits more: – Effects sellers more than buyers. Less need for more sales reps – I think publishers, the seller side has always been progressing faster then the buying side. the programmatic buying enabled publishers to sell their inventory more efficiently, with less overhead. the double whammy of efficiency increase could have quadrupled their revenue just by switching from direct sales to an exchange model. – I feel the seller has a greater advantage, and greater visibility – Publishers are benefiting more, but also losing marketshare to lesser known digital properties. Publishers are now able to gain additional profit from inventory that would have been remnant or even unsold – Sellers• 16% said No one / Not Sure – no one benefits. buyers dont understand the landscape other than cost efficiencies, and sellers dont understand how to sell effectively other than cost. – I cant say it benefits one more than another, but it is a slippery slope than hurts the quality of all media, so end users suffer – The sell side need to invest in their people, data and infrastructure in order to fully manage yield and supply.
Move to Programmatic Buying• 31% of buyers who don’t currently buy advertising programmatically say they will in the next 12 months.• But NONE of that inventory will be non-guaranteed• 46% who don’t engage currently don’t because of philosophical or strategic reasons; 36% because they lack the financial resources to convert and 1/3 because they lack the technological know how
What’s Holding Back Programmatic Buying?• Not that familiar; 76% of non-participating buyers say they don’t know whether programmatic buying benefits buyers and sellers equally• Client acceptance low• Its very new and theres a lot of client education that needs to happen.
What capabilities would lead you to purchasepremium inventory programmatically? Series 1 More Data to Inform Bids 58%Exposure to Inventory Not Currently 47% Available Maintain or Expand Direct Buying 44% Relationships Preferred Access (First Look) 36% More Easily Negotiate Direct Buys 33% 0% 10% 20% 30% 40% 50% 60% 70%
What Else?• Capability to buy "Premium" media units that are currently not even sold via exchange• more buyers• Cost and results
Benefits of direct relationships w/sellers youfear may be lost by buying programmatically?• PERSONAL, LONGTIME CONTACTS WITH TRIED AND TRUE PROS• negotiating power for CPMs for an agencys entire spend w/ a media seller, as opposed to optimization of bids for each individual placement• I have direct contact and can negotiate directly.• Sometimes the sellers can offer insight into which buys are better deals• Integrated (360) marketing opportunities• The negotiation and activation of more complex, more engaging, and more robust sponsorship/partnership opportunities• Custom opportunities, sponsorships, maintaining expected SOV levels within set content channels on publisher sites. I work on B2B clients. As with most ad formats, it is easy to craft them to work for consumers. It takes time to make the effective for B2B. Programatic just isnt there yet for B2B advertisers who have a very complex story to tell.• Context, Best Opportunity to intercept consumer engagement, Tangibly Unknown Destinations
Benefits of direct relationships w/sellers youfear may be lost by buying programmatically?• The opportunity for added value and/or premium placement.• Perks Integration• Special Deals• Ability to learn of new ideas, tips, avails based on a frequency of information. Not all personal relationships are equal and good ones can tip the favor our way.• When issues arise I need/want someone to directly contact to resolve the issue• Client leverages virtually all spends for editorial and promotional elements and requires hands-on contact• automation of the media efforts lead to decrease effectiveness and lack of visceral knowledge of the effect of the creative• Control over premium inventory• content control• Control and quality• Quality
Benefits of direct relationships w/sellers youfear may be lost by buying programmatically?• loss of control• Flexibility• automation of the media efforts lead to decrease effectiveness and lack of visceral knowledge of the effect of the creative• Cohesive placements or larger campaigns that fit with overall strategy• High Impact Opps• AV elements can largely be determined and negotiated via real people in real scenarios• Less work for me• As long as the buyer and seller still keep in regular contact to discuss performance/efficiencies and the seller is as transparent about the data, inventory and analysis/methodology used to purchase inventory and reach certain consumers there shouldnt be a problem.
DSP Practices• 54% of DSPs in our study said that 91-100% of their inventory is transacted via Real-Time Bidding• 89% of them say they support both open and private ad exchanges• 53% say that less than 10% of their transactions are publisher direct, and 46% say less than 10% of their deals involve private exchanges. 44% of DSPs said 91-100% of their transactions are programmatic via open exchange.• 81% of those who don’t currently trade with private exchanges would do so if they had exposure to inventory not available elsewhere.
What Is Holding Back Spending on Exhanges?• Publishers’ Fault – Publishers are still hesitant and afraid of the open market and need to become comfortable that large brands have shifted their spend to RTB, and publishers need to follow suit if they want to capture these buyers. – Publishers not opening up more of their inventory to the exchanges. – channel conflict – Premiumness of inventory. – Lack of super premium inventory made available to exchanges – Inventory quality and transparency – transparency of inventory, client fear, quality of inventory in the long tail – Lack of transparency. – The nature of the available inventory - long tail content such as "Pimple Popper" app that is not seem as desirable to advertisers
What Is Holding Back Spending on Exhanges?• Advertisers’ Fault – Education from advertisers – A lack of education of the landscape as well as a tendency for buyers to resist change. – Lack of client understanding, education, adverse to change ...• Agencies’ Fault – Agencies not utilizing the DSP platforms properly and thinking that they will solve all of their clients’ DR Campaigns within a week. The platform needs time to test and learn if they are a new advertiser to the programmatic space.
What Is Holding Back Spending on Exhanges?• Everybody’s Fault – 1) Belief that RTB is only suited for remnant inventory 2) Lack of awareness around how 3rd and 1st party data can enrich exchange- based buys to offer better targeting for buyers and premium CPMs for publishers – Brand safety Custom ad units beyond IAB standards – brand safety issues and guaranteed separation from competitive advertisers – Stereotype that there is no high quality inventory on the exchanged. – Blind domains, grouping many domains into 1 visible domain – Tradition – quality of inventory, no predictability, no creative freedom, no relationship.
Does programmatic buying benefit buyers andsellers equally? Series 1 Yes 58% No 31%Dont Know 12% 0% 10% 20% 30% 40% 50% 60% 70%
Who DOES Benefit?• Buyers – Buyers benefit more based on market pricing – Sellers can be at a disadvantage due to the lack of data they have regards to their own asset – Has brought down CPMs of publishers over past few years by decoupling audience from context. – buyers – performance – On the RTB exchanges clearly buyers benefit as the quality of their content is not considered. an article on NY Times is equal to my mother blog. As a result and to balance it - premium publishers will make available on the RTB environment the lowest quality and hence this is not a good environment for brands.
Who DOES Benefit?• Some sellers – It has hurt premium sites because now advertisers have access to a massive long tail in a way that wasnt being serviced by networks, and those long tail sales are eating into premium sales. Long long tail sites benefit because theres never been an easier time to get a site onto a mainstream buy – sellers--cut out sales and features and benefits of specific publishers – As long as the audience is correct according t the algorithms then we as a DSP will pay more for it
DSP Customers Define “Premium” Inventory: Series 1By Context (Most popular content) 50% By Section 46% Guaranteed Inventory 31% Ad Unit Type 23% Custom Inventory 23% Audience Segment 19% 0% 10% 20% 30% 40% 50% 60% *Both write-ins: Content Source / Publisher brand name
77% of DSPs Say They Are FamiliarWith the Concept of “ProgrammaticPremium”
“Programmatic Premium” DSP Definition• Quality: – non-remnant – Bid on specific impressions in real-time for the opportunity to show an ad on "privileged" inventory – Ability to secure and provide tier 1.5 inventory – Still executing through RTB, but for pre-negotiated quality inventory – Ad decisioning on premium inventory. – Higher priced higher quality impressions available for bid.• Source / Access – inventory on the private exchange – The ability to buy programmatically premium inventory, inventory that is not available through the open exchange. – Premium inventory that is reserved to sell to buyers in a programmatic way.
“Programmatic Premium” DSP Definition• Means – Different people have different perceptions. The one I least like is the concept of buying inventory through a platform - programmatic BUYING, but not auction. The best answer for programmatic premium in todays space is premium through a deal id in an auction environment (non fixed price). – a programmatic manner to reserve and deliver ads on premium content. From the buyer side premium also require creative freedom, guaranteed delivery, viewable placement and quality placements. – Taking the tools developed to make remnant media buying more efficient and applying them to the guaranteed buying space, which is still mostly face to face, paper-based, and manual. – Programmatic access to inventory that wouldnt be available on the open exchange. Also likely sold on a fixed CPM rather than an auction model, this is more of an sales process efficiency play than a value play
“Programmatic Premium” DSP Definition• Real-Time – The ability to buy/sell ad inventory that has normally been the exclusive domain of guaranteed buys via programmatic means, including but not limited to RTB. – The ability to purchase inventory in an RTB ecosystem that is traditionally only available via direct sales. – Programmatic Premium is just a subset of RTB. Each advertiser defines it based on the goals of their campaign. – It is using algorithms to purchase inventory only on what the industry deems premium• Cost • Paying a higher CPM to buy media programmatic but of the benefits it offers over traditional network-style buying (i.e. higher percentage audience on-target is higher, more efficient, less wastage)
DSP Exchanges in Use• AdX (12) / AdMeld (9) / Google (4) / DoubleClick (2)• Pubmatic (11), OpenX (12), Rubicon (13)• Nine: Appnexus• Six each: RightMedia / RMX / Yahoo!; FacebookExhange / FBX• Four each: Lijit, Nexage• Three each: All major, Brightroll/BRX• Two each: Adap.tv, AdBrite, Casale, Collective, CPX, LiveRail, Mobclix, Mopub, Pulsepoint, SpotXchange• One each: Adrise, Auditude, Flingo, Glam, Microsoft Ad Exchange, Private exchanges, Smaato, Technorati, Trialpay, YouTube
Are you interested in an “audience futures” exchange capabilitythat would lock up inventory from publishers targeted againstyour proprietary data on a guaranteed basis? Series 1 Yes 58%Dont know; need to understand it 35% better No 8% 0% 10% 20% 30% 40% 50% 60% 70%
SSP Practice• The largest group of SSPs (21%) generate between 31% and 40% of their revenues from RTB.• 76% of them can support both open and private exchanges• 39% of SSP conduct less than 10% of their transactions as publisher direct deals• The majority – 53% -- derive only 1-10% of their revenues from private exchanges• The “sweet spot” for SSPs to drive revenue is from open exchanges, where 45% derive between 41% and 80% of revenues.• 67% are familiar with the term “Programmatic Premium”
SSP Customers Define “Premium” inventory as: Series 1Guaranteed Inventory 54% By Context 47% By Section 44% Custom Inventory 40% By Ad Unit Type 33%By Audience Segment 30% 0% 10% 20% 30% 40% 50% 60%
Programmatic Premium Involves• Guaranteed Delivery – Automating guaranteed delivery – Programmatic premium is selling guaranteed inventory to ad buyers, for a premium price, through a system that handles the handshake between the advertiser and the publisher vs. the typical spreadsheet intensive manual process. – Reserved / Guaranteed• Brands – A Network (ABC, CBS, etc.) or band name site (WSJ) with quality ad placements. ATF, prominent placement for display and large player user-initiated video content – Inventory delivered on premium websites via programmatic technology – Programmatic buying platforms such as demand-side platforms (DSPs) have become the most powerful tools for marketing in a digital world. While programmatic buying was proven on ad exchanges using real-time bidding, advertisers are now expanding the tools and techniques to a much bigger part of the media plan: guaranteed buys on premium publishers.
Programmatic Premium Involves• Pricing – Exposing the inventory that is typically sold by a direct sales team to real time buying with the stipulation that all the inventory will be purchase at no less than the floor price. – fixed price bulk buying for particular segments in front of RTB – Using programmatic capabilities to transact buying and selling media thats deemed to be premium based on buyers and sellers criteria. And allowing the bidding for this inventory to compete with non premium inventory.• Selectivity of participants – Directly sold inventory sold programmatically. – Premium content sold through an exchange to a select group of buyers. – Running top of funnel direct sales through the programmatic channel
Programmatic Premium Involves• Selectivity of content – ability to leverage programmatic channel for premium non-direct inventory – brand safe inventory available via programmatic buying – High value inventory sold thru programmatic pipes--as opposed to the type of inventory generally associated with thru-the-pipe buying, which is generally considered remnant. – Premium inventory available to be purchased on the exchange – Programmatic premium envolves the establishment of custom segments of inventory, that would traditionally be acquired via direct campaigns, but are now leveraging programatic plumbing. Opening up the doors of control to the buyers and directly from their access points. – specific slots or "pools" of inventory
Programmatic Premium Involves• Audience targeting – Ability to target and reach the audiences that Advertisers and Brands are looking for at internet scale, using machine learning combined with human insight and reasoning to deliver maximum ROI. – Using programmatic framework and systems to funnel brands dollars to specific audiences.• Automation / RTB – Automating the media buying processf for any available inventory. – fixed price bulk buying for particular segments in front of RTB – Technology (as opposed to IO) to buy and sell professionally prodeuced video (RTB. Platform etc) – The ability to buy premium inventory in an exchange environment. – Trading premium inventory programmatically w/o a race to the bottom
Just One Definition…• Programmatic premium is nothing but making high-quality publisher inventory available into automated sales channels (with direct and controlled access to buyers and similarly, to sellers) so that inefficiencies in planning and buying digital media are improved. Premium buyers define their desired audiences and the system helps them find premium publishers to reach to those audiences. Similarly, premium publishers can define their premium inventory packages and reach out to buyers. Buyers and sellers can negotiate through automated platform and agree on an optimal media plan. Such buys/deals are then executed like a direct buy/deal, with delivery monitored against desired audience in desired frequency along with pre- defined metrics. Finally, it is reduction (and not elimination) of human decision-making in the serving of digital ads. Programmatic premium needs tremendous efforts in educating buyers and sellers. Once the concept is validated, it will bring more money, drive innovation and drive display space in next few quarters. However, the concept itself will evolve in next few quarters based on how buyers and sellers see benefits.
What factors restrict spending on exchanges?• Fear / Publisher Perceptions – Fear of downward CPM pressure. Fear of data leakage. Perception that there is no control of your brand, pricing, data. – Fear, lack of resources, lack of innovation strategy. – Perception it commoditizes inventory. – Perception that theres a decline in CPMs for publishers... advertisers feeling that they dont know where their money is going. – Publisher price protection and brand safety – transparecny, pricing controls, publisher hesitance – Transparency, price, margins• Buyers lack control – Although this is quickly changing, i dont believe buyers have enough control over the inventory to move their budgets the exchanges yet. – Non-transparent audiences, inadequate framework to facilitate buy/sell
What factors restrict spending on exchanges?• Poor quality inventory – Not able to buy "High Impact" placements....pushdowns, interstitials, etc. – Access to guaranteed inventory, transparency, relationships with publishers that go beyond just a standard banner buy. – lack of premium content and knowledge – Lack of quality supply from publishers. Typically only remnant inventory is available.• Lack of brand safety• Lack of vision – Buyer vision. Certain advertisers (like Kellogs) are putting a majority of their spend on the exchange. Others have most of it tied up in direct deals. In the future we can expect more to shift to the non-guaranteed market. – Legacy industry inertia
What factors restrict spending on exchanges?• Lack of training / education (Too complicated) – Ease of use Information exchange and bidding – Education on buyer/seller side Lack of Transparency Inefficiency Controls Actionable insights – Education, availability, adoption. – knowledge, ad quality and transparency – Lack of awareness of the controls that exchanges can offer publishers. – technology is still new integration is not familiar to ad ops teams there is a lot of buzz and not enough actual action – Transparency and complexity
What factors restrict spending on exchanges?• Too impersonal• Duplication, Lack of Differentiation – duplication and confusion between exchange and ad network aggregation• Lack of Standards, Measurement – Its new, lack of standards, lack of targetable inventory in scale (in mobile) – lack of standard content classification and taxonomies across all sources to help create fluidity in market by eliminating guesswork and mismatched targeting. – Lack of standards between exchanges. – Limited TV like metrics – predictability/accurate forecasting - ability to spend budget ability to measure results/effectiveness
Does programmatic buying benefit buyers andsellers equally? Series 1 Yes 68% No 28%Dont Know 5% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Who Benefits?• buyers• Buyers have better tools• Buyers. Commoditizes inventory.• Buyers. It waters down the content of the publishers.• Currently no, it definitely skews to the buy side and drives pricing downward instead of fair market value, but publishers and SSPs are finally coming up with their own solutions to remedy this.• Sellers often dont know who is buying their product• Still primarily benefits buyers. The buyer benefits more as they are able to pay a more accurate rate for the impression. Sellers would like to see higher CPMs• Today the buyers have the advantage because publishers have not invested in yield management technology or expertise.
Who Benefits?• Pubs benefit more as it allows the publisher to capture a higher share of the value of an impression.