Publishers Confront Programmatic Challenges

This is the first of a four-part series, “The Future of Automation,” which looks at how smart publishers are reorganizing for the age of the machines. Digiday will explore these issues and more at the Digiday Exchange Summit, Jan. 30-Feb. 1, in Miami.

There’s little doubt that much of display ad buying is moving to machine-based systems. The byword for these systems is “efficiency.” For many publishers, that translates into “cheap.”

Publishers can’t afford to ignore the rise of the machines. That train has left the station. The only option for publishers is to figure out how they adjust their operations, even cost base, to a world where ad buyers can cherry pick valuable audiences in a sea of impressions. The notion that “content is king” is becoming less widely accepted, giving way to the reign of data.

Digiday asked top publishers like Forbes, The Economist and Wired what are some of the biggest challenges they face with programmatic buying. A major theme emerged: not allowing machines to erode value. That value can be people, or direct sales. That value can be content. That value can be relevancy. These challenges can be met, but it first starts with accepting that machine-based systems are not the future but, instead, the present.

Meredith Levien, CRO, Forbes
The biggest challenge publishers face with programmatic buying in the short term will be whether and how to integrate it into their premium, direct-selling efforts. Human connections still matter. Smart publishers take the time to develop personal relationships with their programmatic partners to learn how to best position their inventory for sale on the exchanges. They employ the right people as technologists and yield managers to direct the machines and also encourage (and compensate) their direct-sales teams to foster programmatic buying where it does the best job of solving a marketer’s problem.

Brent Turner, CTO, MIT Technology Review
The marketers who are advanced users of programmatic buying can do some pretty amazing things with their creative messaging and targeting. When a marketer pulls details from data aggregators, brings in creative optimizing technology, obsesses over contextual placement and optimizes their audience targeting, the resulting ad can be exceptionally relevant to our users. Sometimes, too relevant. Where retargeted ads still bother many users, programmatic ads can downright creep them out. Even for a user base as technically sophisticated as ours, sometimes too much relevancy is just too much.

Howard Mittman, publisher, Wired
The downside is that an algorithm is only as good as the people using it and it requires constant and strict oversight — just ask the mortgage industry how well the Copula formula worked out for them! I see this as a part of the future of advertising, but creativity will still be what is remembered and so programmatic buying is only a part of the process for bringing great ideas to life.

Stéphane Pere, head of digital ad sales, The Economist Group
One size does not fit all. There are several approaches to programmatic buying. Picking the wrong one can lead some publishers to another “CPM cliff” and a lack of visibility on revenue. Choosing between private and open ad exchange, deciding whether or not to enable layers of third-party data targeting, letting marketers bid dynamically or not, plugging guaranteed or a floating inventory will depend on the type of publisher you are. Whether you are a broad pure player with a fragmented audience profile or a niche legacy publication with cross-media properties and content-marketing solutions, picking the right solutions is key.

Walter Knapp, gm of media, Federated Media Publishing
In a word: control. It’s a loaded term and can mean a permutation of creative quality, price, ad size, session depth, competitive separation, viewability, section placement, biddable or fixed purchase, and the list goes on. Ultimately, it’s these controls, in the form of business rules, that will also increase both the revenue-yield opportunity for publishers and the type of spend that marketers are willing to flow through the programmatic channel. It’s the machine version of a trusted handshake deal with a partner, where the publisher intentionally exposes inventory on terms attractive to the marketer and both sides win.

Pam Horan, president, Online Publishing Association
Publishers with strong brands, quality environments and great content are often frustrated with programmatic buying because it tries to treat their differentiated product as a commodity. It is the same as treating a styrofoam tomato from a fast food chain as if it was an heirloom tomato from Whole Foods. Ad environments are not a commodity. Great media brands frame the marketer’s ad within a strong consumer relationship. Some publishers are finding that private exchanges can offer a good balance between efficiency and selectiveness providing publishers the ability to manage the entry point, inventory and price.

Matthew Sussberg, vp of sales, Salon
The biggest challenge we as publishers face is allowing it to erode the value of our content. Publishers’ fear is that it dilutes the value of your impressions but only if your chief source of revenue is selling standard banners. More and more, we find that marketers want to be their own media brands, and top-tier publishers can help facilitate that. At Salon, the vast majority of our campaigns involve custom content integrations, something you could never get with programmatic buying.

Joanne Bradford, CRO/CMO, Demand Media
Publishers need to lose their prejudices and fear of programmatic buying. Every publisher should have a good defensive and offensive game plan on programmatic buying. If you have a strong intention-driven audience, you can leverage programmatic buying to improve your yield and measure what your audience is worth. It is especially effective when integrated with direct custom buying because it provides a balance between mechanical efficiency and customized ad solutions.

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