Tag Archives: Programmatic Buying

Programming Surprises

I come from the world of advertising sales. Strike that: I come from a world that no longer exists even though there is one with the same name still out there. It’s called advertising or media sales except there isn’t a heck of a lot of selling going on – just a lot of buying.

I dislike programmatic buying for a number of reasons, but the one I’m going to discuss today has implications for your business, even if your business isn’t media. Your brand may be using programmatic to purchase ads. Certainly digital ads and, soon if not now, TV, print, and even outdoor. I completely understand the efficiencies of this system and from the buy side the system is great. From the publisher or content distributor side, it has had the effect generally of pushing pricing down. Zero-sum games do that. However, that’s not today’s beef.

In a word – transparency, or lack thereof, is my issue. Many brands have no clue where their ads are served nor do they know for certain which creative is being used vs. which targets. They don’t really know how fees are being taken along the way and they’re not really sure what their budget is getting them in terms of placement. In short, the last thing you want as a marketer – or any businessperson – is a surprise, and this system has the potential to deliver many of them, most of which are bad.

If you think you can mitigate the surprise issue with a Service Level Agreement, think again. Most of those contain a cure period. Even if there is an hour during which your ads run on an unapproved site, the damage is done. Surprise!

When the bills come in and you find out that your $250,000 budget bought you $175,000 of inventory due to fees, causing your effective CPM‘s to rise significantly, surprise!

Ad spending in the US for programmatic TV will rise to nearly $4 billion in 2016 according to some estimates.  That kind of honey attracts a lot of flies, and I suspect we’ll see an even more fractured technical landscape supporting this buying.  No matter what your business, you can’t work with partners who are hiding something, at least I can’t.  Can you?

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Are You A Premium Brand?

I read something that the folks at OpenX released the other day in conjunction with Digiday.  It’s the results of a study on Programmatic Buying and how it affects premium publishers. Since 71% of publishers and buyers trade ads programmatically it’s a big deal. You can read the paper here.

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Having been a publisher of premium content I can tell you that I hated selling anything programmatically.  I wanted my sales folks involved directly with the buyer.  Not just so that we could get the premium CPM we felt we deserved but because we needed to earn that higher rate by doing a better job of meeting the needs of the client and delivering perfect service.  The study sums it up nicely:

Publishers, fearing the commoditization of the inventory surrounding their expensively produced content and painstakingly nurtured audiences, have every right to guard their investment. They want to make sure that any system that removes “friction” doesn’t also remove the distinction of their brand and the quality of their adjacencies, as measured by audience engagement. And, understandably, they want to preserve the professional relationships that forge the bedrock of their sustainable revenue growth.

Exactly.  But as the Digiday article states, premium is all in the eye of the beholder.  Which raised the issue I’ve been considering:  how do you define a premium brand?  Is it scarcity?  To a certain extent it is although there are plenty of Lexus cars around and that’s a premium brand.  Cost?  Maybe relative to other products in its class but coffee can be premium and it’s still relatively inexpensive.  One factor involved is positioning.  If you usually fly first class, being in business class seems cramped.  To a coach passenger, however, business class is premium.  Another is authenticity of some sort.  I was a publisher of hockey content – there are lots of people who do that.  I was the only official league outlet, however – that meant scarcity, authenticity, and in our minds a greater worth.

I could go on here for another 1,000 words but the notion of “premium” is one that’s going to become even more front and center as content becomes more commoditized.  I mean that not only in media buyers‘ minds but also in consumers’ minds.  It’s hard to ask consumers to pay a premium, either in money or in attention,  for an app or content or anything else if we can’t establish that premium status in their minds.

What do you think?

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Filed under digital media, Thinking Aloud