Raj Chauhan is president of Adslot North America, an advertising-technology platform.
Programmatic buying is getting a bad rap. If you listen to publishers, it’s responsible for an oversupply of cheap impressions, low ad quality, channel conflict and declining CPMs. The New York Times placed a fair portion of blame for its most recent quarterly results squarely at the feet of programmatic buying and the downward price pressures exerted on its Web properties. Yet this negativity overshadows the significant efficiencies that the shift to a more automated model for buying display brings to the table.
While it’s certainly not perfect, programmatic buying makes buying and selling ads more cost-efficient and scalable. It’s painstakingly clear to all participants that display campaigns are still too expensive to launch and run manually. So if programmatic buying removes so many inefficiencies, why all the negative buzz from publishers?
All noise, column inches, fear and confusion have been largely focused on the remnant end of the market, which represents only a small percentage of overall display dollars. If we’re to accelerate our industry’s growth from $30 billion to $100 billion, we need to apply the efficiencies of automated buying to the area where most of the display market is being transacted and where publishers can realize the greatest value gains: the premium guaranteed market sold direct.
Guaranteed trading platforms now provide automated direct sales models to existing publisher sites. Often referred to as programmatic direct or programmatic premium, the new sector of GTPs are empowering publishers and enabling them to open up additional lines of revenue by creating a second-tier direct sales channel that creates a high value bridge between the analog relationship-driven, hand-held direct sale and the indirect channels for unsold inventory.
Publishers can lower their minimum spend thresholds and open access to their guaranteed inventory, extending supply to a wider pool of demand. This helps publishers improve revenues and yield and lower their sales operational costs — not to mention improving their site’s ad quality and freeing up time for their sales staff to focus on serving their high-value clients.
Automating the direct sales infrastructure to improve access and unlock latent advertiser demand for guaranteed inventory promises to change the conversation around programmatic buying, shifting the perception from being synonymous with ad exchanges and RTB to a broader and more attractive proposition. The term need no longer invoke distrust in publishers today, as it can — and should –be perceived as an opportunity to build a stronger direct sales channel, regain independence and drive revenues that can be re-invested back into the business.