The Revolution Will Be Served Programmatically

Brian Blondy, August 6, 2015

Programmatic Rising

The importance of the programmatic revolution currently taking place for online publishers cannot be understated. Programmatic advertising is now estimated to be $15 billion of an approximate $60B of total advertising spent in 2015.  Whereas once non-allocated ad inventory was simply left to burn, programmatic technology now serves as an essential solution for publishers aiming to make ad impressions available, and eventually, purchased and served to eager advertisers in real-time.

publishers-premium-programmatic

The programmatic model for selling ad units enables publishers to make their online ad inventory available on exchanges for advertisers and agencies to buy impressions, or ad views, through real-time online auctions from the publishers.

In contrast to the programmatic model, the traditional model publishers have managed the majority of direct or traditional sales themselves, with agencies and advertisers buying an agreed-upon volume of impressions for an agreed upon price directly from the publishers. This process can also involve auctions or fixed prices within the transaction, traditionally a demographic limited to exclusive high-end, premium relationships between agencies and the publishers themselves.

Direct sales though has always been problematic for advertisers because they were never sure which inventory they were actually buying and often, the actual ROI for the ad purchase was low due to the inefficiencies of blindly purchasing inventory.

In contrast, within the direct sales approach, programmatic carves out an efficient ad buying cycle in which ad units are filled more efficiently and immediately than buying direct. Estimates suggest that anywhere from 80-90% of the available online ad inventory is left unsold each year.  By selling direct, publishers have to accept that their supply will not find enough public demand. Regardless of how many direct sales reps are employed by a website to sell available ad inventory, ad units will inherently go unfilled.

 

Next Steps

The industry itself is predicted to grow by leaps and bounds as more and more marketers choose to invest more of their budgets (think $30B USD by 2020) to programmatic media buying rather than directly. It would be shortsighted to interpret programmatic advertising as an exclusive solution strictly for remnant inventory, as more and more publishers are allocating significant chunks of their once premium inventory onto the exchange.

double-click

In order to control a site’s available inventory and revenue management, publishers are empowering themselves with Google DoubleClick for Publishers (DFP) to possess the ability to optimize, monetize and deliver available ad units across all demand sources by managing the ecosystem themselves.  More commonly, hundreds of thousands of publishers are connecting the bulk (both premium and below the fold placements) of their inventory to DoubleClick’s AdExchange (AdX) to globally connect with premium advertisers, trading desks and global DSPs all bidding and competing on the open market for available ad placements. When unified, DFP and AdX offer the best marriage for managing direct and programmatic sales together

 

Looking Forward

publisher-slide

Publishers that fully embrace programmatic advertising on their websites will hugely benefit from opening their site to new revenue streams online. Programmatic, when expertly managed, enables publishers to have control within all essential areas of programmatic advertising.  Specifically, publishers can modify the CPMs, floor prices, minimums, and generate real-time revenue and value to their websites so as to maintain the precise value of their traffic.

In the coming years, savvy publishers would be wise to begin learning how to begin adopting programmatic into their revenue earning portfolio.  Embracing the dynamic shift in how advertisements are served will put websites on the forefront of the growing $15B USD industry.  While a new set of skills and knowledge for optimizing and expertly monetizing the ad placements will need to be undertaken, in addition to realigning their current monetization philosophies, embracing the current towards a programmatic dominated industry is a wise decision for increasing revenue by filling all available ad units

If you are considering taking on DoubleClick DFP or DoubleClick AdX onto your website, our trained experts at Total Media are available to consult with your team in order to build the most optimal mix of programmatic optimization and monetization for your website’s ad units to increase your monthly revenue earned from web traffic.

 

Brian Blondy is the Marketing Manager at Total Media.  You can contact Brian by email at [email protected] or on LinkedIn