SOTI, Presented by OpenX: Programmatic + Premium: Current Practices and Future Trends
Digiday and OpenX fielded a study among industry insiders to understand the current state and future trends of programmatic premium. During this session, we’ll share the results of the study and you'll discover how committed publishers and buyers are to engaging in programmatic trade, the challenges that need to be addressed and plans for continued investment in the year ahead.
Presenter: Qasim Saifee, general manager, OpenX Market
The debate continues between publishers and buyers about the relative advantages of “programmatic advertising.”Does the convenience and efficiency of an automated media marketplace outweigh any downsides? What’s the value of “premium content” when audiences may be dissociated from their media consuming habits online? What are the benefits of direct relationships between media buyers and sellers? Does programmatic trading benefit buyers and sellers equally? These are the questions Digiday and OpenX tackled in the State of the Industry Survey, Programmatic+Premium: Current Practice and Future trends.Today, we’ll present some of the excerpts from the study.
The survey was fielded from January 25 through February 9, 2013, emailed to over 35,000 senior, digital media and marketing professionals. 843 people in total responded41% were publishers31% were media buyers (the majority (78%) of which were agencies) and28% were intermediaries (DSPs, SSPs, etc.)Given our time today, we’re going to focus only on publisher and buyers who are currently engaged in programmatic trade.You’ll be able to get the complete results of the study from our website openx.com.
Our first question for publishers (do you put your inventory in an exchange) and buyers (do you purchase programmatically) was met with high interest: more than 800 of you participated. It’s interesting that there was complete parity among both publishers and sellers. 71 percent of BOTH said they had engaged in programmatic buying or selling. So the majority of buyers and sellers are in the game.
Because publishers saw an increase in revenue due to programmatic sales, they’ll place even more inventory in exchanges.When it comes to programmatic’s effect on publishers’ revenues, a bit over half said that it is UP an average of 21%. A mere 8% saw revenues shrink. Successful publishers – even those who are only moderately successful – will pursue success from programmatic, increasing inventory available to programmatic trading more or less in line with revenues. JAMES -- ADD STAT ABOUT OPENXMARKET GROWTH
Buyers are even more bullish.More than two-thirds of Buyers said they are acquiring more inventory via programmatic trading now vs. 12 months ago.
With the debate around the benefits of programmatic trade, we wanted to find out publisher’s and buyer’s perception about who benefits more. While 44% of buyersdo not know who benefits more, 45% of publishers do not see equal benefits. When asked who benefits more, 98% of the publishers said buyers.Of the 18% of buyers who don’t see buyers and sellers benefitting equally, opinions were split 50/50 as to whether publishers or buyers benefit more.
We can see from the open-ended questions that our respondents thinks buyers benefit more…read responses
Now, to the heart of our study…programmatic premium.
Because “programmatic premium” is a relatively new term to the market, we wanted to see if publishing and buying respondents are familiar with it.You can see that 57% of publishers are familiar with the term, but only 40% of buyers are familiar with programmatic premium.
For those publishers who were familiar with programmatic premium, we asked them how they would define it.You can see the responses vary widely…as an industry, we’re still working towards a common definition.
Buyers who were familiar with programmatic premium said…read responses
* RTB point connected with point two.Addingpublisher and buyer thoughts to our own at OpenX, here’s our definition of programmatic premium…read definition We encourage you to comment on this definition on Twitter at our hashtage# ___ so we can get a dialog going and develop a baseline understanding
While we’ve seen that publishers are already in the game, neither publishers nor buyers think that programmatic trading is perfect.If specific challenges were addressed, publishers reported that they would make even more premium inventory available for programmatic selling.With publishers, the top concerns around programmatic selling include controlling the CMP or price by advertiser or segmentmaintaining direct relationships with buyersAnd controlling ad quality and running brand safe ads
For buyers, the top 3 challenges that they would like to see addressed include:more data to inform their bidshaving exposure to inventory not currently available to themand a first look at inventory.With these challenges resolved, buyers reported that they would engage in even more programmatic premium trade.
Even with the challenges and concerns about programmatic premium, 35% of publishers reported that they already offer both premium and remnant inventory, with 6% making no distinction between the two.The majority of buyers (55%) report purchasing both premium and remnant inventory, with 18% specifying the purchase of premium inventory through programmatic channels and 16% making no distinction between the two types.Clearly the move toward trading inventory programmatically, regardless of whether or not it is defined as premium or remnant, is well underway.
If you recall our buyer definitions a few slides ago, there was some focus on no longer needing the insertion order process to buy media.Publishers are thinking about this as well with 68% reporting they will be able to replace the insertion order workflow. Other inefficiencies that they see programmatic helping include billing and reconciliation (60%), optimization (59%), and trafficking (52%).
Now, to the heart of our study…programmatic premium.
One of our respondents shared this thought with us about programmatic trading…“The sell side still doesn't have the insight, controls and automation to really optimize yield and manage an integrated direct/indirect strategy.” At OpenX, we think the best way for publishers to be successful with programmatic premium is to adopt the right technology. <<I recommend pointing out the obvious here>>You suspected there might be a pitch in here somewhere, didn’t you!We wanted to know if having an ad server with integrated ad exchange capabilities made a publisher more or less likely to engage in programmatic selling.Of those publishers who sell programmatically, the vast majority reported they use an ad server with integratedexchange capabilities. With this built-in capability, 62% of publishers report they are more likely to engage in programmatic selling.Of the publishers whose ad server does not have integrated capabilities, 70% report they’re likely to convert within the year.
When these publishers look to select an ad tech solution, the top two most important features are yield optimization (88%) and reporting insights (87%).
I know we’ve covered a lot of data today, so I wanted to leave you with our high-level take-aways from the study…<read summary>GO TO LAST BOARD AND LEAVE THAT UP DURING Q&A THE URL IS THERE
<<time check with event manager>>I see we have time for just a few questions…For a copy of the whitepaper, go to open.com/whitepaper/programmatic_premium
SOTI, Presented by OpenX: Programmatic + Premium: Current Practices and Future Trends
2013 State of the Industry Programmatic + PremiumCurrent Practice & Future Trends Digiday Publishing Summit, March 18, 2013 QasimSaifee, SVP Monetization Platform Todd Rosenberg, VP Monetization Platform
MethodologyRespondents Digital Publishers 41% • Fielded Jan 25 - Feb 9, 2013 • Emailed to 35,000+ senior, digital media and Media Buyers 31% marketing professionals • 843 people in total responded – most ever!Media Trader / Intermediary 28%
Publishers and Buyers Are in the GamePercent Who Trade Ads ProgrammaticallyDigital Publishers 71% Media Buyers 71%Q: Do you make your digital display advertising inventory available on either a public or private exchange?Q: Do you purchase digital display advertising programmatically?
Majority of Publishers Saw Revenue Increase, Will Trade EvenMore in the Year AheadRevenue: 12 Month Period Inventory: The Year Ahead 8% Down by 19% 21% No Change 55% 58% Up by 21% Will rise 25% 37% 21% No Change Will fall 19%Q: How has programmatic selling affected your total Q: Given your experience with programmatic selling, how much more or less of revenue in the last 12 months vs. the year your digital ad inventory do you anticipate will be sold programmatically in the previous? coming year…?
Buyers Purchased More Because of Programmatic 77% of Buyers Spent More on RTB Year over Year Substantially More 30% Somewhat More 47% No Change 18% SomeWhat Less 4% Substantially Less 1%Q: How much more or less of your inventory are you acquiring via programmatic trading now vs. 12 months ago?
Does Programmatic Benefit Publishers and Buyers Equally? Publishers Buyer No 45% No 18%Dont know 30% Dont know 44% Yes 25% Yes 38% In its current state, does programmatic selling benefit buyers and sellers equally? IfQ: no, who benefits more and why?
Does Programmatic Benefit Both Sides Equally?If not (benefit equally), why not?• “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.”• “It benefits buyers. Not because it cant benefit sellers, but because sellers just havent figured out how to use it to their benefit yet…”• “The sell side still doesnt have the insight, controls and automation to really optimize yield and manage an integrated direct/indirect strategy.”
Publishers Are More Familiar with “Programmatic Premium”Publishers BuyersYes 57% Yes 40%No 43% No 60%Q: Are you familiar with the term programmatic premium?
Publishers Define “Programmatic Premium”“Buying top tier premium publisher inventory via programmatic means.”“A way to buy premium inventory through automation instead of through a salesperson and a scanned IO, etc.”“Premium inventory sold within structured terms but bought programmatically.”“Programmatically bought inventory where there is no distinction in the inventory from direct-sold, just in the manner in which it is executed.”Q: If you are familiar with programmatic premium, how would you define it?
Buyers Define “Programmatic Premium”“Ability to buy „premium‟ inventory (i.e. guaranteed, rich, by specific position and run date) via an exchange.”"No longer needing insertion orders to obtain premium inventory from publishers. Usually a set floor price or minimum number of quality impressions to buy in a month.”"Defining audiences and objectives then system matches premium publishers who can get to those audiences.”Q: If you are familiar with programmatic premium, how would you define it?
OpenX Defines “Programmatic Premium”Direct relationships between buyers and sellers facilitated throughprogrammatic (automated) means. The two programmatic elements are:- Automated discovery, negotiation and workflow.- Buyer-defined rules governs the inventory that‟s purchased.„Premium‟ is in the eye of the beholder.
To Contribute More Premium Inventory, Publishers WantControl Over Pricing, Relationships Control CPM/Pricing 75% Maintain Direct Relationships 67% Control Ad Quality/Brand Safety 66% Set Different Terms For Buyers 54% Predictable Volume/Revenue Guarantees 54% White List Buyers 47% Maintain Data Security 47% None of the Above 4%Q: What would lead you to sell more premium inventory programmatically?
Buyers Want More Data and New Inventory More Data to Inform Bids 68% Exposure to Inventory Not Currently Available 67% Preferred Access to Inventory ("First Look") 57%Maintain or Expand Direct Buying Relationships 39% More Easily Negotiate Direct Buys 29%Q: What would lead you to buy more premium inventory programmatically?
“Programmatic” Trading of Premium Emerges Publishers Buyers Remnant Only 57% Remnant Only 12%Both Premium & Remnant 35% Both Premium & Remnant 55% No Distinction 6% No Distinction 16% Premium Only 3% Premium Only 18% Q: What types of inventory do you make available via programmatic selling? Q: What types of inventory do you purchase via programmatic buying?
Pain Points that Programmatic Premium Can Solve Insertion order workflow 68% Billing/Reconciliation 60% Optimization 59% Trafficking 52% Price Negotiation 36% Ad quality review 25% None of the above 6%Q: What elements of the traditional direct sales process do you think can be replaced programmatically?
Programmatic Requires the Right PlatformDoes your ad server integrate If no, will you convert within the next If yes, are you more or less likely toexchange capabilities? 12 months? engage in programmatic selling?Yes 81% Highly likely 35% More likely 62% Somewhat likely 35% No impact 33% No 19% Not at all likely 29% Less likely 5% Do you use an ad server…that has exchange capabilities integrated into the platform? If you answered “yes” are you moreQ: or less likely to engage…? If you answered “no” how likely are you to convert to an ad sever that accommodates programmatic…?
Top Ad Tech Requirements for Publishers 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%Q: When selecting an ad technology solution, which of the following are more important to you?
Conclusions• Programmatic trading is growing fast…but most publishers think it benefits buyers more• Significant levels of premium inventory now traded programmatically• To continue to grow, programmatic needs to evolve to provide more controls to publishers, and more quality inventory for buyers• Publishers need to adopt the right ad technology platform to tap into growing revenue from programmatic trading
2013 State of the IndustryProgrammatic + Premium Current Practice & Future Trends openx.com/insights/documentation