For years people would shoot me skeptical glances when I suggested that in the near future the majority of display inventory would be transacted programmatically—whether that meant RTB or another automated channel. But these days when I express this sentiment, more people nod their heads and scowl only because we aren’t as close to this goal as they’d like.
This reaction seemed particularly pertinent at an NYC Advertising Week panel I moderated with some impressive folks from the likes of Merkle, Comet (Cox Media’s buying arm), MEC, Time Inc., Hiro Media and The Trade Desk. (Check out some videos from the talk here, here, here, and here.)These were not all programmatic people—the Time guy had an editorial background and was more focused on the creation of branded content. And while challenges overlapped, it seemed pretty obvious early on that we had bisected digital advertising into two camps: branded content and programmatic issues.
We’ve had a major dichotomy switch in this industry. No longer are we chatting about premium inventory versus remnant, but the more encompassing duo of big custom content jobs and transacting “traditional” media. There’s less emphasis on channels and platforms and pipes, but at the same time development and execution is more important than ever.
Am I suggesting that the digital advertising world somehow got a little more complicated? Why, yes I am… But at the same time, trust me—it’s simpler.
A Little Preface
The premium-remnant battle definitely has its roots in print. Just like how we modified spreads, full-page ads, and adjacent placements to our early digital purposes, premium become prominent display placements on home pages, section headers, and newer and popular pages/articles. When video entered the fold, pre-roll joined the premium crowd.
Remnant was… Anything leftover. And so in the early days digital media monetization, direct sales focused on that hot premium inventory and pushed the remainder to ad networks.
RTB players swooped in and displaced the ad networks by offering advertisers better targeting capabilities. But much to the displeasure of the DSPs, exchanges, and SSPs, “programmatic” became the new word for remnant.
Oh, how those parties whined and tried to rename their slice of pie (“second-channel optimization” was one of the wordier entries) or at least squeeze in a third special category of inventory. There were too many thought pieces to count about programmatic premium (so guilty!), but the dichotomy stayed hard in place. The programmatic players were left to stare up the waterfall and weep, “When will we ever get a taste of premium?”
It took header bidding to level the playing field and offer advertisers a much better sense of overall digital inventory. This also enabled holistic yield management, in which publishers could evaluate direct media buys against those appearing from RTB sources.
This isn’t to say that practice is the law of the land—but holistic yield management and competition between direct and indirect channels is truly an option for publishers now. Header initiatives have effectively pulled programmatic into the premium realm.
But I don’t think the word premium makes sense anymore.
Creative Gets Integrated
I’ve long bought into the theory that the transaction and execution of any “mass production” or standard unit should be automated. Occasionally there are variables like government regulations to comply with—e.g., pharmaceutical ads—but even these are increasingly being handled on a programmatic basis.
To get around the increasingly inaccurate dichotomy of premium and programmatic, AdMonsters tried to shift the conversation to direct versus indirect channels. But even this was inaccurate as publishers and advertisers concocted private marketplace and programmatic guaranteed deals that sat somewhere in the middle.
We were noticing something on the direct front too—the creative focus was shifting.
It used to be hard to wrap your mind around the idea of homepage takeovers being sold and executed programmatically, but that’s actually been possible for a long time. However, advances in programmatic have come in tandem with a push toward less intrusive advertising.
This has discouraged over-the-top rich media campaigns, alongside initiatives like the Coalition for Better Ads and Chrome’s looming ad-blocking massacre (think of the interstitials, the poor interstitials!). The current exemplar of good form is highly integrated advertising, be it through native placements or branded/sponsored content.
In the digital age, branded/sponsored content has really developed into its own beast—so much so that it was hailed as “native” to distance itself from its print antecedent, the much maligned advertorial. While that unleashed a world of confusion alongside a new type of dynamic display unit also called native, these products now seem to uneasily fall under the banner of custom content.
This doesn’t necessarily mean “article with a sponsored tag on it”—custom content can be video, interactive features, games, utilities, augmented reality programs, virtual reality rooms, etc. The imagination is the limit! Well, that and the advertiser’s budget.
What’s This Programmatic Guaranteed Then?
So the development of programmatic capabilities in parallel to shifts in advertising preferences to content-based creative has established a new dichotomy in digital advertising: custom content projects versus media (display*). While media is a plea for user attention, custom content actually offers the value exchange that consumers are increasingly demanding. (The value of this exchange, of course, depends on the creative.)
Because the latter tends to require great resources to assemble and execute, it is priced at a premium. The majority of media—as long prophesied—should be executed programmatically, though it could potentially be sold directly.
And that’s where the debate over programmatic guaranteed jumps in—something that the Ad Week panel ended up spending a great deal of time talking about because increasingly complex programmatic deals are causing all kinds of headaches around industry. With custom content it might take more effort to develop the creative in the campaign, but the technology and workflows on the programmatic side has a long way to mature.
What exactly is programmatic guaranteed? Well, no one quite agrees, and it seems to change on a campaign basis. Basically it’s a programmatic deal with some kind guarantee attached. That could be a price, an amount of impressions, or total spend. At the PubForum in Nashville, someone referred to what I’ve long called “programmatic direct” as programmatic guaranteed… And he had a good point.
The goal—guaranteed revenue for the publisher while giving advertisers the flexibility of programmatic—is itself kinda vague; it’s not clear what the end product will look like. Time never slows in ad tech—the shift is already changing job functions and the very idea of campaign optimization. Communication between publishers and advertisers on target audiences and KPIs has never been more critical.
*I’d love to include video, but there is a BIG exception. For in-stream video, the broadcasters in particular have shown a fondness for—possible dependency on—server-side insertion when it comes to the pre- and mid-rolls and dynamically inserted advertising. In a TV-like environment, latency is blasphemy, so they’re unwilling to deal with the potential calamities of client delivery. It’s not clear when and how advanced technology will change this equation.
Brave New World
It’s relieving to declare that we’re entered a post-premium-remnant world. No longer do we have to debate about what premium is—the focus has shifted to campaigns and targeting that engages, no matter the channel or platform.
Sure, there are about 50 dump trucks worth of challenges (see note above about video) in making branded content perform and efficiently enacting programmatic guaranteed, but just recognizing the new dichotomy of custom content and programmatic media feels like a major step forward.