Bamboozled by the language surrounding programmatic trading? You aren't the only one. It's time the industry adopt a consistent approach and publishers move to an 'all-in' approach to redefine the future of programmatic. This opinion piece is one-half of a two-part series designed to complement the 'Death of a Salesman' feature in the brand-spanking new edition of B&T Magazine.
The only thing limiting programmatic trading’s potential is the way we’re currently defining it.
As an industry we need to stop labelling aspects of programmatic trading as if they’re different products, like ‘programmatic premium,’ and shift our focus to how we can all benefit from incorporating technology and automation as part of a complete trading strategy.
Programmatic technology will become the enabler that helps advertisers, agencies and publishers execute significantly more effective advertising. As always, buyers will only pay a premium if they see value in the solution. Premium publishers have been trading programmatically for a while now. But we haven’t done a good enough job of differentiating ourselves from the long-tail or demonstrating the true value for advertisers, when their ads are delivered, programmatically, into contextually relevant brand-safe environments.
The Australian market’s approach to programmatic is still quite inconsistent. At one end of the spectrum you have some media agencies with trading desks operating like an old ad network, where “a cookie is a cookie” so, why pay $15 CPMs when you can get the same user on $0.50 inventory and make more money from it? At the other end you have premium publishers who will only make their “less premium” inventory available at a certain point in their monetisation waterfall, but at rates well below their direct sales channels. Then we listen to panels at industry conferences talk about the fact programmatic is commoditising the industry and asking the question “when will premium come to programmatic?”
The fact is, it’s already here – but publishers and agencies have not yet been able to show advertisers how effective programmatic trading can be when combined with all that Australia’s top premium publishers have to offer.
Publishers need to lead the industry with an “all in” approach, working from the top down instead of the current strategy focussed on monetising unsold inventory. What’s becoming clear is; a programmatic strategy that involves only making some inventory available at the bottom tier in your sales hierarchy is no longer the best strategy. If you recognise how quickly the channel is growing, this approach means you’re actually encouraging the commoditisation the industry fears.
Mi9 was certainly guilty of this when we first launched our exchange two years ago. In fact, you could say we pioneered the bottom-up strategy. Fear of price erosion, loss of control and choosing the path of least resistance meant we continued with the wrong strategy for too long and now we’re faced with the challenge of how best to pivot the business as quickly as possible.
Programmatic buying has evolved, and so at Mi9 we’re fast moving away from a vertical waterfall structure, where value is dictated by the point at which the impression is utilised, to a horizontal structure where programmatic technology will allocate inventory across channels, in real time, based on a list of sophisticated variables and rules. Where we’re headed means remnant inventory becomes a thing of the past.
Mi9’s vision is to redefine the way programmatic is viewed by opening it right up across channels so we can establish the true value of premium solutions, regardless of how you buy them.
As premium publishers, we invest heavily in content so brands can reach their customers in the right context. Why have we allowed the industry to think the value of this premium context is any less just because technology executed it? We need to pull ourselves up from the world of undifferentiated, commoditised digital media where fraudulent clicks and masked URLs are the cost of doing business – to a world where technology is simply the enabler that, in fact, helps us drive more value for our advertisers than ever before.
Patrick Darcy, Mi9 Director of Programmatic Trading