Programmatic direct demands that publishers take additional liberties to truly make their audience discoverable. You have to make it easier for brands to locate the audience they value. Only then can programmatic direct bidding deliver demand optimized pricing for publishers. Buyers will only demand higher prices if they know they can target audiences with programmatic direct as efficiently and effectively as they can with RTB on remnant inventory.
The Publishers Guide to Programmatic Media Buying and Selling
1. Ian Michiels
Principal & CEO
Gleanster Research
Bill Lederer
CEO
MediaCrossing
Featured Speakers
WEBINAR
A Publisher’s Guide to Programmatic Media Selling and Buying:
Making ProgrammaticWork forYou
4. He might have
said something
more like this…
“I know that half my
inventory is extremely
valuable to advertisers,
I’m just not sure which
half.”
5. Agenda
A look at programmatic media buying in the context of
publishers
What is it?
What does it mean to you?
By the end of this webinar you will know:
Exactly what programmatic media buying is
Transformational trends to prepare for
Key strategies for monetizing inventory more effectively
How to drive relevant audience development cost effectively
6. TheState of
DigitalAd
Spend
IAB’s annual Internet Advertising Revenue Report conducted by PwC
According to Gleanster:
An estimated range of not less than 25% and upwards of 80-
90% of inventory is unsold each year
(depending on the size of the publisher . )
(April 2013)
7. TheState of
DigitalAd
Spend
IAB’s annual Internet Advertising Revenue Report conducted by PwC
Spend on CPM is declining.
Jerry McGuire syndrome runs rampant. Advertisers want ROI.
(April 2013)
-6% CAGR
9. More
Predictions
“Programmatic media buying in the U.S. will grow from $1.99
billion in 2012 to $8.3 billion in 2017. It will go from being 16% of
total Interactive Display Advertising spend to 30% in the U.S.”
“Programmatic media ad spend on RTB will grow from an estimated
$2.2 billion (15% of total display advertising and 44% of total indirect
ad sales) in 2012 to around $8.5 billion (27% of total display advertising
and 78% of total indirect ad sales) in 2016.
“RTB will make up 25% of the display advertising space by 2015.”
“RTB’s takeover of display advertising will rise to 50% of all display
ads by 2017. RTB will hit $7 billion in North America that year as
well.”
10. An Industry
Evolves… but
into what?
Publisher
Owned
• Premium spots
• Limited
understanding of
audience
segments
Networks
Evolve
• Monetize unsold
inventory using
behavioral and
contextual signals
Power to the
DSPs
• Per impression
• Real-time
• Auction based
• SSPs emerge to
bridge the gap
Programmatic
• RTB
• Direct
• Advent of a Supply
SideTrading
Platform
11. 11
What’s
programmatic
mediabuying?
In digital advertising, programmatic media buying is the fully
automated method of buying media executed using data and
typically algorithmically driven systems with direct access to
publisher ad servers, ad exchanges and other auction based
electronic marketplaces.
12. Poll
What is your level of confidence in your understanding of
programmatic media buying and the impact on the publishing
industry?
14. • LUCRATIVE
• MANUAL
• PRECEPTIONOF CONTROL
What does
programmatic
mean for
publishers?
SPONSORSHIPS
PREMIUM INVENTORY
AUDIENCETARGETED INVENTORY
AUDIENCETARGETED (VIA AD EXCHANGES)
REMNANT INVENTORY (WHOLESALE)
WHAT’S COMMON…
Via Direct Sales
15. What does
programmatic
mean for
publishers?
WHAT’S COMMON…
Via Direct Sales
75%
15%
5%
5%
SPONSORSHIPS
PREMIUM INVENTORY
AUDIENCETARGETED INVENTORY
AUDIENCETARGETED (VIA AD EXCHANGES)
REMNANT INVENTORY (WHOLESALE)
PUBLISHER REVENUE
19. Remember
optimal pricing
and efficient
markets in
school...
Illiquidity: Publishers have supply
that can’t find demand.
Inefficiency: Publishers have
limited understanding of target
audiences & limited performance
metrics to let ROI dictate CPM
pricing.
More Supply
∞
20. Transparency
&
Value
Time
Premium
Direct
RTB
Transparency in RTB drives higher
value and therefore optimized eCPM
pricing. Brands will start to demand this
transparency from direct and they will
be willing to pay higher eCPM for
proven value and transparency.
Transparency
&
Value
Time
Premium
Direct
RTB
Programmatic
Direct
Increased value on finite premium
inventory in an auction-based exchange
will drive up eCPM pricing for publishers
while lowering overhead costs and
increasing yield.
Industry trends
are shifting the
balance
21. THE POWER OF PROGRAMMATIC
TARGETAUDIENCE
TARGETAUDIENCE
THEY BELONG IN PREMIUM
MAX
CPM
MAX
CPM
MAX
CPM
MAX
CPM
There’s gold in dem’der hills, but publishers need to find it through
a better understanding of target audiences and efficient inventory sales.
What does
programmatic
mean for
publishers?
24. What does this
landscape of
players do?
Allows buyers of digital
advertising inventory to
manage multiple ad
exchange and data exchange
accounts through one
interface.
Enable publishers to
manage their advertising
impression inventory and
maximize revenue from
digital media.
Match the Seller with a BuyerFind sellers based on bid preferences
Facilitate
the buy
26. What
emerging
trends should
publishers be
aware of?
Independent MediaTraders
Represent publishers, marketers, and agencies with a transparent
trading platform.
Sometimes referred to as “market makers” because they will
actually purchase media from publishers and assume the risk of
creating a market for this media.
What’s cool about IMTs?
The can give you higher CPMs by circumventing some of the costs
associated with the players in the network
They operate extremely sophisticated algorithms and often use
their own data and technology them to direct match advertisers and
publishers- and reduce cost in the process.
They provide transparency and insights into your audience.
In addition to using Programmatic MediaTrading for better
monetization and sell-through, consider using programmatic for:
AUDIENCE DEVELOPMENT
• Engage IMTs to drive
incremental audience
exposure of content and
create premium inventory.
AUDIENCE EXTENSION
• Engage IMTs to target
premium audiences outside of
owned or managed media.
AUDIENCE SUBSCRIPTION
• Engage IMTs to create new
subscriptions (paid or
registered) leveraging
programmatic.
28. Six things
publishers
should know
about
programmatic…
Segment target audiences
more effectively delivering
higher ROI to help
advertisers to justify
increased spend
Demand maximum CPM
rates through auction
based pricing and
advertiser demand
Control premium and
remnant inventory
efficiently
Minimize unsold inventory
Understand subscribers
and optimize content to
grow high value audiences
Target new subscribers
and boost premium
exposure
Programmatic media buying can…
29. What do
publishers
need to do to
maximize
future sales?
Embrace the shift from direct to programmatic, demand will dictate
measurement and transparency in the future
Be open to information transparency with the goal of driving
efficiency and optimizing eCPM.
How do you know your premium couldn’t drive double the eCPM in an
efficient market?
Share data on performance and audience targets with IMT partners
and advertisers
Look for opportunities to elevate remnant target segments
Try audience subscription– it could be used to boost new premium
subscribers.
Staff appropriately for success.
That $36B is largely driven by a fraction of available inventory.If there was an efficient and effective way to monetize this unsold inventory more effectively, would the market be even larger? Are publishers leaving money on the table?That’s where this conversation about programmatic comes into play.Programmatic has the potential to efficiently maximize CPM for all forms of digital inventory.
With that said, let’s look at the trends we are seeing in the marketThis chart show Internet ad revenues by pricing model. Notice how the last 6 years have seen a consist decline in spend on CPM programs.We have to ask our selves why that is. It has a very real and material impact on publisher revenue.For those of you who know a thing or two about Real-time bidding you might argue that RTB has contributed to this decline because transparency and efficiency contributed to more efficient spend on CPMI would argue that that perspective is flawed given the volume of spend on RTB- around 30-40% of publisher sales.So that makes rise in spend on performance based pricing model all the more important. It’s what I call the Jerry McGuire Syndrome. Show me the ROI!Marketing leaders are being held accountable for marketing spend, they need to demonstrate return to justify budgetWhich is exactly why programmatic is so compelling.
Given the sift in traction from performance based pricingThe first thing we sort of want to address is the longevity or staying power of programmatic.Is it going away?Is it something that can be dismissed or ignored?
If we look at the last 10-15 years on the merits of evolutions the industry has had we can sort of classify them in a series of buckets.The era of publisher owned digital inventory. Networks Evolved: They began to understand publisher audiences better than the publishers using behavioral and contextual signals. Power to the DSPs: The network era evolved into the DSP where rich data from online and offline was combined to and paved the way for real-time bidding where per impression, auction based models started to take hold. DSPs gave advertisers tremendous control over optimizing bids on inventory and helped publishers separate audiences from the content itself. Now we are evolving into programmatic, the systematic and efficient offloading of all forms of inventory. What is also just emerging is the supply side trading platform representing publishers.Ian: “Bill can shed some more light on the current and future state as you see it with Programmatic?”
Programmatic is a fully automated method of buying media executed using data and typically the algorithmically driven system with direct access to ad exchanges and other options-based electronic marketplaces. Programmatic uses real-time systems, rules, and algorithms to automate the delivery of data-driven targeted and relevant experiences to the consumers as they interact with the brands many touch points. For publishers this opens up a whole new approach to offloading available inventory. To micro-targeting audiences and matching available supply in an efficient auction based environment that is optimized for the highest bidder.Ian: “Bill can you touch upon how this definition might change for a publisher”You don’t just have to put inventory on an exchange, you can make it available on a server itself.Let’s stop and do a quick poll just to level-set the conversation.
Ian: “Bill can you talk a little bit about how your publishing clients are using programmatic and maybe touch upon the expertise required to do it effectively. What’s been your experience? Share some insights on his perspectives on programmatic in the context of publishers.
Let’s start to define programmatic by looking at the current state for publishers.Imagine this mountain represents yoru inventory as a publisher.The peak of the mountain is your premium content. It’s the real-estate with a view that everyone desires.Beneath this is a huge volume of potential inventory that you don’t know a ton about but it’s there and it’s got potential.
In order to understand programmatic and the problems with a direct model let’s go back to school for a second. If you recall, the optimal price is driven by the intersection of supply and demand. The problem for publishers is you are facing illiquidity. Where supply can’t find demand- at least not at optimized levels.And the inefficiency argument isn’t just about inefficiency in knowledge and insights. Ian: One of the real challenges in this market is the price inefficiency. Bill one of the value propositions you specifically address as a vendor is the price inefficiency that exists. Can you touch upon that briefly:Inefficiency from the price an advertiser pays and the price a publisher getsWe’ll touch upon it later, but the key point:This is a delta publishers should not be willing to accept.
Ian’s explanation.Ian: “Bill can you talk a little bit about what this looks like for publishers. Are there some examples you can give from your publisher clients.
This is the LUMAScape – some of you may have seen this, for others it will be new.It’s an attempt to lay out the various players that are currently necessary for enabling digital media buying and selling.This represents the craziness that exists in the marketplace and the different players
Ian: “Bill I’m going to have you walk though this…”
Bill it would be great if you could elaborate more on this, but we are definitely finding that the research suggests one of the biggest challenges with making programmatic successful is the domain knowledge and resources available on the publisher side. Which also makes it important to look at scalable relationships that can offload some of that burden.