How can publishers benefit from premium programmatic?
Contributor, November 18, 2014
Publishers who embrace premium programmatic will discover big revenue expansion opportunities. One of the most powerful benefits of the private market place is the ability to segment target audiences more effectively and by doing so, justify increased advertiser spend. The idea of dealing with a new technology at first can be daunting, but is not hard to solve with some customization. The question is, are publishers willing to invest in the short term, even if it means hiring outside help, to benefit from the programmatic market place in 2015?
Programmatic buying is the flavor of the day for advertisers. More advertisers are demanding it and are earmarking it as a priority in their 2015 budgets. Publishers on the other hand have shown distinct signs of discomfort in this new and open online arena. Anxieties over inventory quality and a fear of lack of control have kept publishers away in droves.
But programmatic isn’t going away, rather its predicted to grow exponentially in 2015. According to a study from eMarketer, RTB spend is expected to double between 2014 and 2017, moving from $4.6B to just over $9B.
So how can publishers benefit from the programmatic boom in 2015? What can be done to gain control over transparency, inventory quality and identity management?
Programmatic has the potential to hugely benefit publishers.
Estimates suggest that anywhere from 80-90% of the available online ad inventory is unsold each year. Publishers are working in an illiquid environment where supply often can’t find demand. Regardless of how many direct sales reps are hired inventory often remains unfilled.
Private programmatic fares well for publishers willing to adopt a long term approach.
Programmatic when managed expertly enables publishers to:
- Minimize unsold inventory
- Control premium and remnant inventory more efficiently
- Segment target audiences more effectively to justify increased advertiser spend
- Increase content exposure at the audience segment level
- Target premium audiences beyond the publisher site (audience extension)
- Optimize content to grow high value audiences
- Systematically sell paid subscriptions leveraging programmatic marketing
- Demand maximum CPM rates for narrowly defined target audiences
Moving premium inventory more efficiently.
Premium inventory to date has been the bread and butter of the publisher’s advertising model. It created a safe haven for building brand relationships. It came with no transparency options to drive down costs. In this private garden, the publisher owned the keys. Even though to date the model depends on large sales teams, it is still lucrative for publishers. Conveniently, the burden of optimization is offloaded to the brand – it’s up to the brand or the agency to segment, target, and manage the advertising strategy.
But this practice of throwing all the weight on the brands and agency’s shoulders came with a hidden price. Publishers were less reluctant to innovate and seek higher yield on premium inventory.
Programmatic premium turns the table for publishers
Programmatic premium (or programmatic direct) works on rules-based algorithms that automate and simplify publishers’ sales process. On the buy side, advertisers can buy premium inventory with the same guarantees they got when dealing with the publisher’s sales team.
Ironically, many publishers fail to recognize that the same factors driving higher CPM on remnant RTB traffic can drive higher bids on premium inventory especially if the publication and audience targeting criteria are exposed.
So what can publishers do to make programmatic premium scale successfully?
Programmatic premium requires publishers to make their audience more ‘discoverable’. It encourages publishers to make it easier for brands to identify the audience they wish to target. These pre-conditions must exist to deliver optimized pricing for publishers. Buyers will only accept premium prices if they know they can target audiences as effectively as they can on remnant RTB inventory.
One of the most powerful effects of optimizing sales with Premium programmatic (or programmatic direct) is the ability to grow the total amount of revenue a publisher can generate.
To optimize premium programmatic, ensure brand safety and avoid price erosion, publishers need to keep their antennas up for better solutions.
They need to provide more granular audience targeting on premium ad inventory. They need to work with trusted partners to increase the value of their data and user and ensure their inventory yields maximum ad revenue.
At Oraki we welcome the opportunity to explore strategies for growing publisher revenues.