The online display advertising industry is already worth a staggering £3.8bn in Europe alone and is projected to reach £6.18bn by 2017, which means it’s becoming more critical for advertising businesses to stand out from the crowd. As the industry continues to grow, publishers and advertisers alike are continually looking for ways to maximise the value of advertising to them, and thanks to ever-advancing ‘programmatic’ technologies, the process of trading online advertising is now becoming an easier and more streamlined process than ever.
Over the past two years we have seen that the process of trading high-volume, low-value, advertising inventory has become far more efficient, due to the emergence of Real-Time Bidding (RTB) technologies. This is particularly so on the buy-side, evidenced by the plethora of DSPs and Agency Trading Desks that have come into existence, offering an effective means of facilitating large-scale, programmatic transactions.
This is all well and good, but what about the critical area of premium inventory? Publishers are increasingly realising that it is vital now to focus on their valuable premium ad space – the low-volume, high-value opportunities that draw in the majority of their revenue – and move away from a fixation on simply shifting low- value, mass- volume advertising.
As technologies are advancing to help begin to make processes more automated, we’re seeing the term ‘programmatic premium’ being used increasingly frequently. In 2013, it is likely to gain even greater recognition, so it is important that businesses understand what it refers to and what this means for technologies.
Programmatic simply means making things more streamlined, and therefore more efficient, via technology. So, instead of relying solely on human transaction and low-level technologies such as the phone, fax, email and spreadsheets to manage the buying and selling of inventory, a publisher or an advertiser can choose to adopt technologies that can automate all, or part, of the process – be it to save time, reduce latency, remove complexities, eradicate out-dated and inefficient manual approaches or generally ensure the whole process runs more smoothly. It’s worth stressing, however, that, in spite of some commentators suggesting everything should be automated, a degree of human involvement is still vital. For example, programmatic campaign optimisation may have an uplift for one advertiser while negatively impacting another. Human intervention is therefore essential to make the ultimate decision as to whether this is a good or bad thing for the business to implement – something that no machine can do.
The important thing to remember is that there are programmatic technologies designed for monetising remnant advertising space, as we see with DSPs, but there are also programmatic technologies emerging designed to facilitate the efficient trading of high-value ad space at the premium end of the spectrum. Fundamentally, remnant and premium are measured differently, driven by different objectives and need to be approached differently. As a result, the technologies necessary to support them must be developed to solve the specific needs of the different inventory types.
In this way, programmatic and RTB are not one and the same. RTB is an example of a programmatic approach, but premium platforms can also be programmatic in nature.
So when people pose the question (and I have heard this on number of occasions now): “Can programmatic exist with premium?”, the answer is simple. Programmatic covers both premium and remnant processes, so yes, it can and it does; it’s a moot point.
There is no arguing that RTB offers an efficient way of monetising and buying large volumes of low-value advertising, but the problem is that the rise in impression-level buying, de-averaging and RTB in general has resulted in an imbalance in the industry by favouring the buy-side. However, the emergence of true programmatic premium technologies specifically geared towards delivering greater efficiencies and value in trading high-worth inventory should begin to address this and swing things more in favour of the publisher.
The industry’s desire to make online a more attractive channel for brands will also help. The emergence of metrics around visibility and interaction provide measures of campaign success relevant to brand marketers. At the same time, the transparency, trust and confidence that premium inventory offers a brand makes this attractive to them.
Brands want to deal with businesses that can make the very complex structure of buying and selling premium inventory somewhat simpler, so programmatic premium will become a key area in 2013. We need to realise that it’s not necessarily a new concept, as programmatic premium technologies already exist. However, what 2013 will see is that these technologies are being embraced more widely as more businesses recognise the value they bring.
