Why All-Programmatic Doesn’t Work for Everyone
For premium publishers, a combination of direct and programmatic works better.
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.