Shani Higgins on Programmatic Selling in the Era of Fragmentation

One would think the automation that comes with programmatic buying and selling would make the lives of publishers pretty simple by speeding up the ad sales process, selling more inventory and eliminating human mistakes. But one would be dead wrong.

These days, a large portion of marketers’ digital spending moves through a multitude of automated and semi-automated buy-side platforms, technologies and managed services. Sellers (i.e.: publishers) must scramble to support these disparate platforms if they want to get the highest value for each advertising impression.  This automation has brought an incredible amount of fragmentation, and both sides of the auction are buried in complexity.

In order to reach marketing objectives, buyers divvy up their budget and employ multi-platform strategies to give themselves the best chance of success. Taking full advantage of the continually innovating marketplace, buyers pick a handful of platform partners to begin working with, rotate off the lowest performing partners, and then bring in another group to test and optimize. In other words, almost nothing about programmatic buying and selling remains the same week in and week out.

After optimizing within and among platforms, buyers often work with optimized data segments across platform partners to meet the scale needs of the campaign. Each player brings their own approach as to how they segment and target audiences.

On top of this, buyers are constantly trying out new technologies, data segments, and partners to better hit their marketing goals. It is kind of like looking for the repeat patterns in a kaleidoscope.

“The many partners at each stage of a campaign’s execution are needed for their individual purposes,” Jim Caruso, Vice President of Strategy at Varick Media has said. “This vast array of partners continue to cause fragmentation and requires the expertise to be able to constantly survey and weigh the value of partners across the landscape."

Fragmentation of demand worsens with source and domain whitelists, sampling, optimization filtering, frequency capping, access to exchanges within exchanges, and the list goes on.  It’s almost impossible for a publisher to truly get every impression exposed to every viable advertiser through the myriad of settings, restrictions and business rules that buyers set up across systems and partners.

To maximize access to budgets, publishers must work with multiple partners, needing to be everywhere all the time.

 Welcome to the migraine publishers face when trying to stitch together the disparate but necessary solutions.

 When working with multiple partners, publishers are faced with high internal management costs in time and resources needed to implement and maintain multiple integrations.  The pain of accessing and consolidating reporting -- much less setting and managing blocks, floors and ad quality parameters -- across the multiple partners can be a major deterrent to adding additional valuable partnerships to their mix.

Sell side platforms were meant to solve this issue, but most are far from neutral. They provide the tech, but also the marketplace (with the majority of their income coming from marketplace commissions).  It’s in their best interest to make their own marketplace stronger and to not level the playing field for their competition.

When they do integrate other marketplaces, publishers feel the commission hit twice (or more depending on how many partners are nested within each other). Marketplace platforms also cater to both the sell and buy sides, limiting their ability to build competitive feature sets for one side over the other.

As more advertising budgets move to programmatic buying -- and innovation and data improve performance for both sides -- a multi-partner strategy only grows in importance. To mitigate the headaches of a multi-partner strategy, the industry will need standardization to help partners work better together and transparency to minimize the inefficiencies and complexity publishers face. Additionally, tools that stay sell side focused and remain neutral to different buying platforms will thrive as publishers make big bets in programmatic.

The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage management or associated bloggers.