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What the buy-side can do to encourage programmatic buying

The industry has moved well past the debate around television versus online video, and the buzz right now is all about programmatic trading.

But if you attend any industry event about programmatic trading, you’ll quickly realise that much of the conversation is weighted towards publishers.   While advertisers have been quick to embrace the benefits of programmatic trading, many publishers still hold some reservations due to the perceived lack of transparency and control.

It’s no secret that the digital video industry is facing a supply scarcity problem, and the lack of inventory is holding back growth and pushing up prices. It is important to clarify the scarcity is only the portion of the inventory that is in higher demand such as user initiatied, large player on premium properties. Naturally, tips, strategies and plans for getting the sell-side to move faster abound – but the responsibility weighs on more than just the sell-side.  We know for a fact that there are things the buy-side can do, in particular demand side platforms (DSPs), to push forward greater efficiencies in programmatic.

For example, we all know that different media channels are suitable for different marketing objectives. So why do multi-channel DSPs tend to qualify all media channels the same as display, on a referring URL basis? This grossly miscalculates the true value of placements in online video.  Coming back to the earlier point on scarcity of specific inventory, the player size, initiation status, or skip-ability of an online video ad unit affects performance, and these attributes don’t exist in display. Algorithms need to think like media planners, and understand the inherent differences in media channels in terms of how they impact advertiser outcomes.

Advertisers and DSPs also need to think quality over quantity when it comes to supply integrationsThe reality is, integrating 10 different supply-side platforms (SSPs) will get you similar inventory access as if you’d integrated three and leveraged those partnerships to the fullest. DSPs should prioritise using all the features of the SSPs they work with instead of always seeking out more inventory. SSPs in today’s market can offer DSPs loss notifications, vertical categorisation, media channel specific targeting parameters and private marketplace capabilities, which in turn result in programmatic direct execution.

Take full advantage of those tools first and then evaluate the need for additional SSPs. The simple truth is that SSPs can garner more inventory from publishers if they have more concentrated demand, so it befits DSPs to stick with a smaller pool of partners and nurture the relationships they already have before onboarding new partners or even going to the supply source direct, which then provides no value to the Publisher in terms on managing inventory.

While agency trading desks aggregate millions and millions of dollars in demand, that demand is concealed from publishers.  This hurts the programmatic space and its ability to grow. We need publishers to change their initial ad serving decision from “Is this impression reserved?” to “How do I sell this impression for the highest amount?” Until then, we’re still competing with a direct sales queue. So how do we get there?

By implementing a multi-bid process and identifying all buyers in the RTB ecosystem. DSPs today issue just a single ad response for every placement opportunity – typically the highest bid – and they transmit that one bid to the SSP. But what if that DSP had a hundred buyers interested in that placement? Publishers, presented with data aggregated from the SSP, only see a fraction of the total demand for their inventory.

Therefore they undervalue the programmatic opportunity. DSPs transmitting all bids will lead to publishers adding more of their typically direct sold reserved inventory to the programmatic space, as they’ll recognise their paychecks will be larger if they do so. As a result, they can then begin allocating the inventory to open marketplaces and programmatic direct, which is the same end result as a direct sell, it is just managed and executed through a Platform.

Finally, there’s one more thing that both sides can leverage to help grow programmatic trading: Deal ID.  A Deal ID is an insertion order that outlines unique deal terms between a publisher and an advertiser, and they make RTB more effective by adding a universal identifier to specific aspects of an advertising campaign (e.g. homepages, channel sections, contextual targets, demographic, behavioral, etc.).

For publishers, Deal IDs set parameters for the buyers (DSPs, ATDs or client direct), allowing a publisher to drill down to one partner and even reach segmented inventory that they themselves can determine. For buyers, Deal IDs help target this specific inventory against the flood of open exchange traffic, enabling them to spend more on these segments and reach the targets they are looking for, which ultimately means more successful campaigns.

It’s clear that both the buy-side and sell-side have a role to play in ensuring the growing adoption of programmatic trading.  From the buy-side’s point of view, programmatic trading gives advertisers the ability to cherry pick impressions based on demographic, behaviour, price and location and for publishers, programmatic trading is an avenue to better maximise inventory.  Whatever camp you’re sitting in, programmatic trading leads to what we’re all working toward: more revenue and more efficiency.

The writer is Matt Von der Muhll, managing director at SpotXchange Asia Pacific.

 

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