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Mike Kisseberth

Why All-Programmatic Doesn’t Work for Everyone

Mike Kisseberth Sales and Marketing - 02/18/2014-09:03 AM

 

Programmatic is still very sexy.

After coming to the fore in 2013, it remains a key—if not the key—buzzword of 2014 (and, yes, we’re only two months in). But beyond buzz, programmatic is a legitimate force in advertising.

Not only will it account for just under 30 percent of all display ad spend by 2017, already, 85 percent of advertisers are using it, in some form. We also can’t ignore the very real benefits with respect to streamlined workflow, cost efficiencies, and transparency between partners. So, it’s not a matter of who will ultimately use programmatic, but how quickly everyone will use it. 

And we’re seeing this play out in the market. Just recently, Federated Media and Demand Media both made headlines, deciding to completely forego their direct sales efforts to focus solely on the still young, but increasingly successful, programmatic and RTB category.

The news fit neatly into the ongoing, polarizing direct versus programmatic debate, while heightening that schism and making the sexy, all-programmatic approach appear to be better suited for the long-term. But, while this was a very compelling narrative, it just isn’t true.

At least not for everyone. And that’s what some of us are forgetting.

All-programmatic as a strategy works particularly well for a certain type of publisher—specifically, those with long-tail networks that don’t sell highly-customized or native campaigns.

For more premium buys, whether in display or native, direct sales is still very much needed to provide buyers contextual grounding and more strategic insight. It’s also critical for campaign optimization. It's worth noting, too, that a premium programmatic relationship requires direct engagement between the customer—usually a trading desk—and an informed sales person.

While the all-programmatic approach works for some players, those with a fuller and more complex mix of inventory still need to rely on a direct sales team to get the job done right.

The technological infrastructure simply isn’t there to leverage programmatic for high-engagement custom or native programs, so it will be some time, if ever, until we see publishers that offer this deeper mix of inventory going all-programmatic.

At the same time, the all-programmatic approach will continue to grow. We will see more long-tail players adopt this strategy over time, with it becoming the norm for some publishers. It’s just a cost-effective business model for them, given the inventory offered.

From my own experience, for premium publishers, the best strategy is a happy medium, employing a combination of direct and programmatic to best serve clients and partners. This dual approach is the most effective, allowing them to have the best of both worlds, as the two models are working together, plugging gaps, providing insights on how to best optimize campaigns, and delivering overall better outcomes for advertisers and publishers.

 

 

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Mike Kisseberth

Native Advertising and Programmatic Buying: Predictions for 2014

Mike Kisseberth Sales and Marketing - 01/10/2014-09:31 AM

 

Native advertising and programmatic buying were all the rage in 2013—and for good reason.

According to eMarketer, native ad spending will exceed $3 billion in just three years. Publishers are trying to take advantage, of course, with nearly 75 percent now offering online native ads across their sites. Any why not? BuzzFeed, the poster child for native, is both profitable and growing at a time when many media companies, new and old alike, are finding it increasingly difficult to do either of those things.

Still, native advertising only shared annual buzzword honors with programmatic buying. Programmatic is expected to account for nearly 30 percent of all display ad spending by 2017—or over $9 billion. That’s because 85 percent of advertisers use it, with 91 percent expected to do so in the next two years. And like native, publishers are going where the money is. 72 percent now have programmatic offerings in place.

Long-term growth for both native and programmatic is clear. But the two categories are still very young. Over the next year, how might the way in which we use them change? Here are a few predictions.

Native Advertising


1. Standardization Is Coming

With the recent release of the IAB's Native Ad Playbook, we’ll see continued standardization of native ads and native ad serving. Remember—while native spending will likely hit $3 billion in just a few years, the concept is, again, relatively new. Implementing structure and a consistent framework will only help both buyers and sellers maximize opportunities and take full advantage of the trend.

2. “Answering” the Scale Question

The next big hurdle in native advertising will be to close the programmatic-native gap. The pressure is on figuring out how to automate native, similar to RTB and programmatic, so that publishers can create custom content quickly and with little overhead, to drive actual scale.

3. Expect Greater Regulation

Disclosure and transparency in native advertising will continue to be top-of-mind for the industry. Expect stronger guidelines and standards to be considered by the FTC in the New Year, with the industry encouraging self-regulation, as seen with the IAB’s Native Ad Playbook.

4. Native will Be More Data-driven

Successful native campaigns will be heavily reliant on the data and insights gleaned from programmatic initiatives. This means that understanding how creative functions and drives programmatic performance will become increasingly useful in planning native campaigns.

Programmatic Buying


1. Buyers will Grow into Tech Experts

As automation and programmatic continue to take center stage, media buyers will become increasingly technology-proficient to interpret data and provide strategic insight to clients.

2. Premium Programmatic will Be Key

The industry is still confused about what programmatic, and especially premium programmatic, really means. As more and more publishers adopt programmatic strategies in 2014, the emphasis will shift from understanding the medium to progressing it. This means more emphasis on “premium programmatic,” mobile, video, etc.

3. Marrying Programmatic and Native

2014 will be the year we see native and programmatic begin to court one another. In 2013, we created a false dichotomy between the two formats, with native on one side, programmatic on the other. Rather than separate the two, we need to understand how they can work together, plugging each other’s gaps—scale and quality, for example—to improve message delivery.

4. Direct Sales will Go Programmatic

With more dollars moving towards programmatic buying channels, I expect greater pressure on the direct sales teams in the New Year. As a result, one of the things we will see is direct sales teams working hard to acquire the skills and relationships needed to drive premium programmatic deals.

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The future is obviously very bright for both native and programmatic. In 2013, they solidified themselves as key growth areas for the long-term. In 2014, however, we can expect evolutions in each category, with more synergy between the two to better deliver for advertisers, marketers, brands and publishers.

 

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