The "Programmatic" Sale

One common theme we have seen in working with publishers is the challenge of understanding how to adapt to the growing necessity for advertisers to “buy programmatically”.  Here are a handful of tips to help guide a publisher as they think through this changing market.

Programmatic is a buyers market:  

Advertising has traditionally been a market where the publisher (the seller) determines and packages what a marketer (the buyer) purchases.  The publisher uses intelligence they have on their audience to package together a media plan that best fits the marketer's goals. With the advent of programmatic, this changes and in fact is reversed.  What buyers are looking for is the ability to purchase users that they find valuable in real-time based on their own data. What this means for a publisher is (let us assume you have a monthly audience of 5 million users) rather than creating a package that reaches a targeted 2 million users and 10 million impressions per month across specific sections of your site, a buyer is now looking for the ability to “see” your entire audience and purchase any of those 5 million users and as many impressions as a buyer sees fit in order to accomplish their goals. Campaign delivery, optimization, and execution, all tasks that a typical seller would support, is now handled by the media buyer.  The seller simply sets up the technical integration of what media can be bought, and the rates.

Metrics matter:  

Programmatic buyers will have a very detailed understanding of engagement, viewability of ads, click through rate, and perhaps other metrics such as demographic or psychographic data. These buyers will have the ability to increase their buying, or decrease their buying in real-time.  Behind all programmatic tools for both buyers and sellers (DSP’s, SSP’s, DMP’s) is data.  The largest brands in the world are creating warehouses where they can understand very intricate details of their customers and potential customers, and they are mapping this information to cookies and mobile phones, and television sets, so that when they buy media, they are actually executing a message against a given person, and in many cases they have a good understanding of who that user is.  As a media seller, this is important to know, as buyers will use very tactical metrics across all media partners to understand who is driving success.  If the media you are selling doesn’t have high user engagement, or isn’t viewable, or is placed on a page where there are many other ads, the buyers will generally buy less.

You already have really good leads!:  

Programmatic buying started primarily with remnant inventory, as media exchanges were born by creating efficiencies and revenue for this unsold inventory.  Today, the technology that supported the remnant inventory is being moved up the stack and supporting sponsorships and top tier programmatic buys. Buyers have become very sophisticated in how they are leveraging their own data, be that users they want to retarget, CRM lists, or other data sets they want to execute against.  If you are a publisher and are looking to increase demand from programmatic buyers, you can get lists of all of the brands, Trading Desks and DSP’s that are buying your inventory in the open exchange (which may typically be your remnant inventory).  This is the ideal place to find leads to up-sell into more exclusive and higher impact programmatic campaigns.  

In traditional media sales a publisher has a good understanding of their audience (ex. females 25-34) and sellers take this broad understanding and go find relevant brands to pitch media programs. With programmatic, you will find that the advertisers are already executing on both broad and narrow audience targets in the open exchange. For publishers that can strategically execute on higher impact ad units and more engaging programs programmatically, you will benefit from targeting marketers who are already seeing an overlap between their desired audience and your audience.

the difference between a retail sale and an auction:

With traditional media sales the “rate card” is the source of truth for a seller.  This determines the price of media, and how a given campaign will run. With programmatic, although publishers can set floor pricing, the dynamics of media execution can vary dramatically.  What does this mean?  

Imagine you are talking to a traditional retailer about a media campaign, as your audience matches their targets (ex. females 25-34).  They may have a few different initiatives they are looking to execute against and, based on the nature of those campaigns, their CPMs and the media they buy may vary.  Once an IO is signed, the publisher runs the campaign, and there are some insights shared on performance once the campaign is over. Ideally the campaign performed well and the marketer has interest in renewing.

With a programmatic campaign, there is no IO, and as a publisher you are holding an auction. You may set up a floor price of a campaign at a $6.00 CPM and what you will notice is, depending on the units that an advertiser buys, the time of day, the size of the unit, the engagement of a unit, and the initiative that a buy is supporting, will all have an effect on the price the buyer pays. You will see certain impressions sell for the floor price of $6, but you will also see other impressions sell at $20+ dollar CPM.  Each user, for each impression, for each unit has a unique value to a given marketer and programmatic allows them to buy inventory in this auction based environment to fulfill their goals.

People matter:  

Programmatic has created an efficiency in the marketplace. Media buyers are strategically buying users they have interest in messaging too.  What is important for media sellers to understand is that each impression is more valuable for that buyer, as they are targeting a given user who is somewhere in the purchase cycle of their product or service. Their entire business now relies on their ability to reach specific users that you (hopefully) have. Instead of creating media offerings that mix some valuable impressions and some less valuable impressions, and packaging it for a buyer, success is found in having far more engaging experiences for a buyer to access.  The role of storytelling on top of the advertising buy/sell toolset is where a person will always be valuable.    

So as you can see with the tips outlined above, media selling, and specifically programmatic, is more strategic than it has ever been.  Due to the fact that the transactions can happen in real-time nature, it is very important to approach the right buyers, and position your inventory properly to align with the goals of a given marketer.  This thinking is not new, in fact it is the foundation of what media sales has always been about.  The difference is that the buyer has more power than ever before, and success of a campaign has a far deeper meaning than simply delivering impressions.  The efficiency being created on the buy side means that even though these buyers may buy ads against fewer overall people, they will want to engage deeply with the users they do buy, and it is the responsibility of a publisher to support this.