Joe Pych is CEO of NextMark, an ad tech provider. Follow him on Twitter @jpych.
There’s been a lot of industry excitement about programmatic premium. It’s already been proven that it’s possible to drive transaction costs and timeframes to zero. But adapting real-time bidding algorithms to direct buying with the thought that transaction costs will disappear is a fallacy. The dirty secret of programmatic premium is that there’s really no infrastructure to support it today.
Digital advertising has a directory problem. Unlike virtually every other media channel, there’s no comprehensive directory of advertising inventory. How can a computer be expected to find inventory without access to a searchable electronic directory that includes all the information it needs to make decisions? And how can a computer start the ordering process without a way to identify the inventory it is buying? This is a showstopper.
The Interactive Advertising Bureau is working to solve the directory problem with the IAB Digital Advertising Directory. (Disclosure: we built and maintain this for it..) So far, more than 800 publishers have contributed. But it’s far from complete; only 7,500 digital media programs are indexed and many of the listings need work.
Digital advertising also has a protocol problem. The industry has not yet adopted a standard electronic order format. Orders today are essentially paper transmitted in a variety of formats via email and fax and re-keyed on the other end. How can a computer be expected to send insertion orders to 20 publishers in a media plan without a standard electronic protocol in place? This is another showstopper.
The IAB is trying to solve the protocol problem with its eBusiness Interactive Standards. It recently published version 1.0 of the electronic insertion order, which is the lynchpin to programmatic buying. But these standards have not yet been implemented by anyone.
And digital advertising has a systems problem. Today’s RTB systems are not well-suited for direct buying. Furthermore, most legacy agency and publisher workflow systems are closed systems that cannot communicate electronically with other systems. How can an agency’s computer system be expected to deliver electronic documents if publishers’ systems aren’t listening? And how can a publisher send a proposal or electronic invoice if the agency’s system is not listening. This is yet another showstopper.
Ad tech vendors are now in a race to develop the systems required to support programmatic premium. Incumbents are attempting a Sutton Pivot, while challengers are starting from scratch on purpose-built platforms. It’s on the close horizon, but nobody has yet made meaningful “first contact” by successfully transmitting electronic IOs from one system to another.
Programmatic premium is a huge opportunity for advertisers, agencies, publishers and their ad tech vendors. However, until the basic infrastructure is put in place, beware: The promise of programmatic premium will remain an empty promise.
Image via Shutterstock
Dentsu’s new Web3 readiness tool shines light on the tech’s potential to complement AI
Dentsu's Innovation Initiative is launching a web3 readiness index next month — at a time when the industry is obsessed with AI. Could the two technologies actually make a good pair?
Digiday+ Research deep dive: Publishers large and small put their resources into first-party data
Eighty-two percent of publishers overall say they're already using first-party data to prepare for the end of the third-party cookie, and nearly half are requiring users to register and integrating first-party data segments into DSPs – indicating that first-party data is the clear path forward for publishers heading into the post-cookie world.
Media Briefing: Why publishers hope chatbots will be the latest retention tool
Publishers hope the chatbots they are developing will be the latest retention tool to keep readers onsite and to get them to consume more content.
SponsoredHow enterprise-grade CDPs are enhancing data processes and improving customer experiences
Produced in partnership with Marketecture The following article highlights an interview between Martin Kihn, Salesforce’s senior vice president of Marketing Cloud, and Ari Paparo, founder and CEO of Marketecture Media. Register to watch more of the discussion and learn how brands are making the most of enterprise-grade CDP technologies. As brands expand across channels and […]
How programmatic advertising will evolve this year on the heels of audio growth and privacy changes
Comscore’s programmatic division Proximic released a State of Programmatic study highlighting the growth of audio and podcasting, other digital advertising channels and challenges around third-party data.
Why podcasters are selling subscriptions through third-party vendors
Many podcasters are turning to third party platforms like Supporting Cast and Supercast to launch or grow their subscription businesses beyond Spotify or Apple.