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Direct, Upfront, and Guaranteed: Navigating the Inventory Landscape

March 21, 2014

By Joshua Koran, MediaPost

Both buyers and sellers are rapidly adopting marketing technology to enable programmatic buying. Buyers like the visibility and control that managing all media spend through a single interface affords and the higher ROI it produces. Publishers like the increased revenue that programmatic yields by enabling far more demand for their inventory than can be sold via a direct sales team. That said, everyone would appreciate greater simplicity to help marketers navigate the vast programmatic landscape.

So here’s a guide to help advertisers navigate the hyper-competitive ecosystem to engage their desired audiences across devices.

RTB: Efficiency, control, but limited access: Demand-side platforms (DSPs) and programmatic buying have emerged in the past few years, providing marketers with the simplicity of a single interface to target only the audience they want, in the context they want, at the price they want. This automated approach can be incredibly efficient, but it lacks three key benefits of traditional direct-sold inventory:

  1. Access to reserved media like Yahoo home pages, which are currently sold via direct sales teams and are not made available to the indirect sales channel of integrated DSPs (via sell-side platforms and exchange marketplaces);
  2. Access to publisher-provided user data that allows buyers to further refine their spend and reduce media waste; and
  3. The publisher’s guarantee — built into their contracts — that they will deliver the entirety of the buyers’ budget, and offer make-good credits if they don’t.

What’s in a Name? Fortunately for buyers and sellers, our industry keeps innovating to combine most of the benefits of RTB with these three benefits of popular, publisher-enriched, guaranteed inventory. Various names have emerged to describe this new method of negotiating between buyers and sellers: “programmatic premium,” “programmatic guaranteed,” or “programmatic upfront.” However, only the last one accurately describes this new concept, since the majority of direct-sold inventory being automated with technology is neither premium or guaranteed. Buyers and sellers negotiate upfront, rather than in real-time, about which inventory and publisher data will be delivered. Contracts can be guaranteed or pre-emptible. Inventory can be premium or cheap. But in all cases, the insertion order contract is negotiated upfront.

Where Programmatic Direct Fits In: There is yet another term the industry is using to describe these contracts between buyers and sellers: “programmatic direct.” Of course, the vast majority of programmatic direct contracts are transacted over real-time pipes. But to distinguish programmatic direct inventory from standard auction-based inventory, sellers append an additional parameter to their bid requests, a “Deal ID,” to designate which buyers, price points and purchasing rules apply to these bids. The industry seems inclined to settle on “programmatic direct” as the umbrella term for both of these forms of contract negotiation, but I’d suggest that we’d benefit from maintaining its distinction from programmatic upfront buying.

Toward this end, I’d like to propose that all of us in the industry help break through the clutter and confusion of what to call which solution, by settling on the terms that best represent the transactions they describe. The graphic here can serve as a guide to clarify and simplify the complex programmatic landscape for the audience that matters most — our customers.

Source

"Direct, Upfront and Guaranteed: Navigating the Inventory Landscape." Joshua Koran. MediaPost, 03/21/14.

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