How publishers and advertisers can take direct relationships programmatic

This post was written by Troels Smit, Head of Demand Sales, LiveRail, a Facebook Company

Spring, a season of renewal and fresh starts, is officially upon us. It’s also our gateway to summer, arguably one of the slower times in digital advertising, making it an ideal time for publishers and advertisers to take a lesson from nature and hit the refresh button. By taking the time to reevaluate their current media relationship strategies now, they can use the summer months to implement changes. Then, when fall hits and the holiday madness begins, they’ll feel ready.

The evolution of relationships is about asking questions. How can we work together smarter, better, and more efficiently? How can we help each other meet our respective goals and address concerns? Despite a lot of conversation among the industry, the reality is that the growth of relationships between publishers and advertisers are stunted by a shared hesitancy to take direct relationships programmatic. But today, many of the longstanding concerns each have had, are becoming less and less legitimate.

Advertiser concern: Poor Quality

Just a few short years ago, programmatic was widely regarded as a channel for a publisher’s remnant, or “low-value,” inventory. This made many advertisers afraid of altering their relationships and increasing programmatic budgets.

The reality: Today, publishers are taking a more holistic approach to monetization by making a substantial amount of premium inventory available via programmatic channels. Many are even starting to provide first-look programmatic opportunities above their direct sold and allow direct sold to compete within their private exchange, further motivation for migrating the relationship. Many major digital publishers, like Dailymotion, have been vocal about the value of this approach.

Advertiser concern: Lack of Transparency

Some advertisers believe that programmatic refers only to transactions occurring in an open exchange, a mechanism that offers only limited transparency.

The reality: When direct deals are executed programmatically, advertisers can get increased transparency and efficiently executed campaigns. Advertisers can and should make it clear up front, during negotiations with their direct sales representatives that they’ll want to see things like site transparency reports and ad verification. Sellers can then put the right controls in place via programmatic technology to ensure their working within the right guardrails throughout execution.

Publisher concern: Cannibalization

Direct sellers have long worried that programmatic will cut into their commission checks by giving buyers another, (potentially cheaper), route to their inventory. That no longer holds true

The reality: To avoid channel conflict, publishers should look at monetization holistically. By housing direct and RTB sales in one technology platform, publishers can compare the price of a directly-sold impression against a real time bid. Assuming their directly-sold campaign is on-track to deliver (or over deliver) publishers can ensure immediately available impressions go for a higher price tag. In some cases, an RTB bidder may be willing to pay more than your direct client.

Publisher concern: Harming the Relationship

Getting past striking deals over steaks and martinis can be scary. After all, human interaction and face time is a vital part of any type of relationship and the last thing a publisher would want to do is risk damaging a valuable partnership.

The reality: Moving to programmatic can actually enhance the relationship by bringing powerful technology and data into the mix. Better, more precise targeting is one of the key improvements that programmatic brings to help deliver better results for both sides.

With eMarketer predicting that programmatic direct will reach $8.57 billion in spend by 2016 and represent 42 percent of programmatic ad expenditure in the U.S., this year is a pivotal turning point. While fear of change, especially the kind that can influence a business’s bottom line, is natural, there comes a time where it has to be embraced or you risk slipping behind.

Sleeping on programmatic can jeopardize buyers and sellers efforts moving forward, as the emphasis on data and technology for demonstrating ROI and increasing efficiency only increases. By taking the proper steps to address hesitancies, advertisers and publishers can successfully “spring forward” and take their direct relationships programmatic, improving efficiency and results.

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