Why publishers need to embrace automated ad selling

Programmatic buying has already changed the publisher mix on most plans shifting budget from ad networks, but there are still big opportunities to shift even more budget for other inventory we categorize as “standard.” Pre-roll, display and a lot of mobile inventory should all be bought using automated methods through programmatic groups. But since a lot of this inventory is classified as ‘reserved’ and commands higher CPMs than are not typically found on the open exchanges, instead private marketplaces have to be constructed. These marketplaces protect the agency (questionable inventory) and publishers (around CPMs). In fact we’ve been working with our trading desk partner, Varick Media Management (VMM) to construct dozens of private marketplaces for Media Kitchen’s clients.

Currently only about 20 percent of Media Kitchen’s non-search digital media is bought programmatically and that’s not for lack of trying. Some of the non-programmatic inventory will never be an automated buy, but much of it could be if the inventory was available. Often our chefs (what we call the people that work in TMK) bemoan not having access to the rights kinds of inventory through exchanges via trading desks. Private exchanges will remedy that complaint. In fact we’re betting on it.

Over the last six months The Media Kitchen, in partnership with VMM, has been meeting with dozens of publishers including all the usual big suspects like The New York Times, Conde Nast, and Time Inc. to develop private marketplace relationships. And all of them have been very exciting meetings. All the publishers are excited to work with the trading desks and start getting some good agency case studies around programmatic upper funnel buying strategies. In fact some of these meetings have been the most forward thinking and optimistic meetings I’ve been in for a long time. It seems like the publishing industry is starting to really commit to a programmatic future. While programmatic buys don’t represent a significant portion of their revenue they are all willing to commit resources to learning, which is very refreshing.

Now when we meet with a publisher the discussion quickly becomes how will we access the inventory, how much we’re willing to pay, what will it take to buy transparency to the publisher level (rather than the parent company) and who should they send the deal ID to. The days of having to explain audience buying, APIs and programmatic are long gone.

As a result of the private marketplace relationships being set up for The Media Kitchen through VMM, all of the chefs will shortly have a rate card from VMM detailing a menu of private marketplaces. Once we decide that a particular publisher or audience is important to our clients we’ll be able to see what higher funnel, reserved inventory is available through VMM before we reach out to publishers directly. Inventory bought this way will be much smarter inventory since it will benefit from VMM’s data-management platform and will complement the open exchange buys VMM is already making for many of our clients. PMP sourced inventory may not be the cheapest inventory around but we think it will be some of the ‘smartest’ because of the data we bring to the marketplaces.

We believe that incorporating private marketplaces into our planning process will go a long way toward accelerating how quickly we can get into the market with much better insights about the audiences we’re buying. In 2014 we think we’ll be able to shift as much as 20 percent more budget to DSPs from direct site buys using private marketplaces and that will save everyone time and money.