Digital media buyers (advertisers) and sellers (publishers) both want to capitalize on programmatic advertising. Advertisers want more affordable, laser-focused digital strategies. Publishers want more revenue, particularly from low-cost, long-tail archival content. Both sides of the digital ad equation are embracing programmatic direct deals to get what they want from their campaigns, inventory and targeting. Here’s a beginner’s guide to programmatic direct deals, and how to make them work for you:
First: What is ‘Programmatic?’
Your Spotify playlists are programmatic. Out of Home can be bought programmatically. Even Consulting firms that analyze the profitability of perishable produce logistics are doing programmatic. But what exactly is programmatic, and is all programmatic media inherently performance media?
We define programmatic media buying as demand-side media buying which uses automated algorithms to aggregate media (whether digital, addressable TV, audio or other), filter by datasets (1P, 3P, etc.), bid, purchase, analyze and optimize digital media buying, whether in real-time (as in RTB), or near-real time.
Let’s Make a Deal
How are programmatic direct deals set up? What should advertisers consider when approaching programmatic direct through their demand side platforms? Publishers enjoy programmatic direct because of the additional control over which advertisers are purchasing their inventory. Advertisers embrace programmatic direct to control inventory exposure and to simultaneously layer on targeting capabilities made possible by programmatic ad buying through 1st party, 3rd party and modeled data.
Not all programmatic direct deals are created equally, as the cost structure and campaign setup greatly depends on the type of programmatic direct deal arrangement is reached with a publisher. Top deal types include:
- Preferred Deals
- Private Exchanges
Preferred deals provide advertisers seeking specific site placement with layered audiences a set negotiated price for that placement. In a preferred deal, the buyer chooses its audiences and impressions to bid on, the inventory is guaranteed, and the deal is executed using a deal ID and delivered programmatically.
On the other end of the programmatic direct spectrum is a private exchange deal. If an advertiser is looking for inventory in a premium context, but at a potentially lower CPM than a preferred deal, a private exchange may make more sense for that advertiser. A private exchange can guarantee inventory URL, but winning bid CPMs can fluctuate greatly, and there is no guarantee on acquiring inventory.
The Economics of Programmatic Direct
When establishing programmatic inventory prices, it helps for an advertiser to put themselves in the shoes of the media inventory managers to help them negotiate best prices. Questions that media sellers often ask themselves when negotiating with a buyer (advertiser) include:
- Is the inventory they want highly sold through or scarce?
- Does the buyer want predictability and forecasting on delivery?
- Are the audience targets based on publisher data or geo-targeting?
- Is the buyer contextually related to the site (endemic)?
- Does the buyer have a brand objective vs. a direct-response objective?
If answers to these questions are a “yes,” then the seller (publisher) might be pushing for a preferred deal at higher CPMs. Alternatively, insightful advertiser should think about the goals of any campaign and see what inventory can be acquired at the best possible rates, which might lean on private exchanges for inventory acquisition.
Regardless of the type of programmatic direct deals chosen, the ability to layer on a brand’s targeting criteria on top of select inventory presents advertisers with unparalleled digital advertising precision.