Editor's note: If you missed the first article in the series, "The evolution of programmatic," check it out here.
Programmatic media has refocused digital advertising on its original promise: the ability to showcase the right advertiser with the right consumer at the right time in a truly scalable manner. As with most inventory monetization advancements in the arc of the industry, programmatic buying was first viewed as a threat to direct sales efforts by publishers. This being the case, in the first wave of programmatic buying, publishers were only willing to offer up the inventory they had the hardest time selling -- their remnant traffic. This resulted in the stigma of "low cost automation," ultimately relegating programmatic as a bottom-of-the-barrel commodity -- far from a desirable strategy. But as programmatic efficiencies and reliability have gained traction, publishers have become willing to offer up their more valued, or premium, inventory, and higher quality advertisers have clearly shown a willingness to investigate. Now with the advent of premium inventory marketplaces, programmatic has taken a step toward a more legitimized status, becoming a go-to strategy for publishers, brands, and agencies.
Simply offering higher quality inventory at higher price points, however, will not be enough for the automation of digital media buying processes to truly become a preferred method for the highest tier of advertising budgets in the long term. In order for programmatic digital media buying to become an accepted norm, partners will have to widen their view of what a premium offering can really be. The industry will have to offer a hybrid of quality inventory, automation, and real value-add service for both programmatic sellers and buyers of digital inventory -- a true preferred programmatic experience for all parties.
In a preferred programmatic world, automation should not simply be for its own sake. Instead, it should be considered one piece of a puzzle that ultimately helps deliver a more efficient level of trading between advertisers and direct publishers. The needs of both the buy and sell sides must be equally considered to develop a mutually beneficial ecosystem. For publishers, this means fostering relationships that result in the highest yield with visibility into advertisers filling their inventory. For advertisers, the story is similar: clear inventory transparency (including cost and position on the page) so they can make informed buying decisions and exceed the results they expect. Preferred programmatic must be about removing the distinction between technology and service in order to create a preferred way of doing business.
So what would a company focusing on preferred programmatic look like? It would need to leverage industry leading ad serving technology, direct relationships with premium publishers, and significant expertise in inventory optimization in order to automate and maximize yield while providing advertisers with entirely transparent ad placement on top quality publisher sites. Such a marketplace would have to enable users to increase efficiency while choosing partners through a more direct, transparent relationship, according to their unique preferences. It would have to rely on powerful automation to enhance efficiencies while engaging the expertise of experienced media optimization specialists for additional analysis to help facilitate relationships between the highest quality publishers and advertisers.
MAGNA Global estimates that by 2017, non-RTB programmatic will account for 31 percent of the overall digital ad spend. As the programmatic landscape continues to grow, our industry must ensure that excitement about the next new thing doesn't derail us from the most efficient evolution. The expansion from RTB to premium programmatic was an important step for the whole digital ecosystem, but it's not enough. We need to widen our view and ensure that our solutions take into account the balance between the needs of both supply and demand, in order to maximize returns for both sides. The industry must embrace "preferred programmatic," a view that sees programmatic as not just another technology, but a larger philosophy to help us move forward with the business of innovation.
Stay tuned next week for the third article in our series.
Jonathan Slavin is CRO of CPXi.