Forecasts predict that as much as 85% of all display advertising will be purchased and sold via programmatic platforms by 2018. Brand advertisers are beginning to test and enjoy the efficiency and scale that programmatic offers, and some are really making an impact with oversized, rich media ad units. The opportunity seems ripe for both advertisers and publishers: advertisers reach customers at scale with targeted, engaging ads; publishers can attract premium advertisers at a premium price point.
And yet, many top publishers are still not offering their inventory programmatically – not even on private exchanges. Peter Minnium of the IAB says that limited inventory is the most formidable barrier the industry faces to attracting more brand budgets away from TV and over to digital. So what's holding publishers back?
What's holding many of them back is actually native advertising. Many publishers are demanding top dollar for unique, customized advertising opportunities that look a lot like their own content. While I'm a supporter of native advertising, I think we can all agree that these customized placements aren't likely to scale and – while they're probably very effective – probably create a whole lot of work for the advertiser and publisher alike.
At the same time, premium publishers are reticent to put any inventory onto the exchanges for several reasons: Not only are they uneasy that they will be risking band safety by showing low-quality ads on their pages, there's a very real concern that their premium advertisers will purchase lower-priced slots programmatically instead of buying better placements directly.
The fact is, there's a happy medium between these custom placements and RTB. Programmatic premium might just be that perfect middle ground the industry needs. It offers many of the benefits of custom placements with the ease and scale of programmatic. With Programmatic Premium, publishers can still offer high-impact ad units. New IAB standard units like the Rising Stars and template-based HTML5 ads can deliver engaging rich media advertising experiences. The "surprise and delight" elements of advertising can come to life through these units in the same way it can with rich, custom overlays. What's more, these units can include custom content by the advertiser, as well as relevant, staff-written, publisher content, to give the units a feeling that truly is "native," as with Forbes' BrandVoice offering.
Furthermore, programmatic premium offers benefits for advertisers that custom placements often can't. Let's start with targeting and optimization: Possibly the greatest benefit of programmatic is access to data at scale. Programmatic offers targeting and optimization tools that typically cannot be matched by a direct buy with a single publisher. Real-time optimization is also possible to improve results on the fly based on real-time campaign data. To what extent can you target individual audience members or optimize based on the responses of certain audience members, with your melting-homepage overlay on Slate? Whether you're buying an audience or targeting contextually, automation wins here.
Reach is another benefit. A custom placement on a single premium site reaches a limited audience, obviously. But place a rich, interactive ad unit across a premium network, and you can reach your audience across hundreds of sites. Networks come in all shapes and sizes, and a buy with a premium network or exchange can place your ad in top-quality, niche content sites that reach the audiences you most want to target with your messaging, at scale.
Many will argue that custom wins this round. They'll say that it's far safer to buy a custom placement on a premium news site than it is to buy across an entire network. I would argue that there's still plenty of premium content adjacent to which you most likely do not want your ad running. There's enough unsavory news appearing on front pages everywhere, and even the coolest overlay for your vodka or jeans brand would suffer by the juxtaposition. With programmatic real-time targeting (and the right partners) brand advertisers can avoid awkward positioning, while reaching audiences with intent.
There will always be a place for beautiful, unique, customized ad placements. But programmatic premium, by combining rich advertising units with the targeting and scale of programmatic, can deliver benefits for both advertisers and publishers. Engagement, cost-savings, relevance and efficiency are just the top of a very compelling list.
Tom O’Regan is a seasoned advertising executive with an expertise in vertical publishing and sales strategy. As President & CRO of Martini Media, he is responsible for company-wide advertising revenue and operations. Tom can be reached at email@example.com.
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