Study: Programmatic Trading of Premium Inventory is Accelerating Swiftly

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LOS ANGELES & NEW YORK, March 27, 2013 (ADOTAS) — OpenX Technologies, Inc. (OpenX), a global leader in digital and mobile advertising technology, and Digiday, the leading media company and community for digital media, marketing and advertising professionals, today announced the release of an important new white paper: Programmatic + Premium: Current Practices and Future Trends (Programmatic + Premium). The white paper provides an in-depth analysis of the current understanding and perception in the digital advertising industry of what is increasingly known as Programmatic Premium: automated – or programmatic – sales of premium advertising inventory. Based upon results gathered through this year’s State of the Industry survey conducted by OpenX and Digiday, Programmatic + Premium discovered that, for the first time, both publishers and advertisers have a rapidly increasing appetite for programmatic trading of premium ad space.

While industry leaders continue to debate the feasibility of premium trading in automated exchanges, the new Programmatic + Premium research verified that both publishers and buyers are already committed to programmatic trading and that programmatic trading of premium inventory has significant appeal to both the buy and sell sides of the digital advertising ecosystem. Historically, “premium” was considered highly valued ad space that was only sold directly by the publisher through traditional means. With the growth of Real-Time Bidding (RTB) many publishers and advertisers are eager to buy and sell premium ad space in an automated way, utilizing the various efficiencies it provides, representing a fundamental shift in the space.

OpenX and Digiday’s research revealed that more than 70 percent of the advertisers and publishers surveyed are currently trading programmatically and predict double-digit revenue growth this coming year. Of those buyers already trading programmatically, 77 percent plan to buy additional inventory in the coming year. Both publishers and advertisers understand the benefits of programmatic trading and how it can be used for premium inventory with 18 percent of surveyed advertisers already buying premium inventory exclusively while only three percent of their publisher counterparts are exclusively selling it. In fact, many publishers believe programmatic trading provides solutions to the common inefficiencies found in the traditional direct sales process, including: replacing the insertion order workflow, billing and reconciliation, optimization and trafficking.

Other key takeaways from the white paper include:

  • The move toward trading inventory programmatically, regardless of whether or not it is defined as premium or remnant, is well underway. Currently, 35 percent of publishers reported that they already offer both premium and remnant inventory, with an additional 60 percent offering either premium or remnant inventory. The majority of buyers (55 percent) report purchasing both premium and remnant inventory, with 16 percent making no distinction between the two types.
  • Advertisers and publishers are eager to programmatically trade premium ad space, but face challenges. For most publishers surveyed, increased control over pricing, ad quality control and the preservation of their direct relationships were primary concerns identified. Most buyers were primarily focused on the need for more data to inform inefficient bidding, additional exposure to inventory not currently available via programmatic means and “first look” access to inventory.
  • Despite these challenges, research showed that publishers are actively seeking technology solutions that will better monetize their inventory. Of publishers that don’t use an ad server with integrated exchange capabilities, 70 percent are likely or highly likely to convert to one in the coming year acknowledging the importance of a fully integrated platform in programmatic trading. Those publishers say they are looking for an ad tech solution that addresses primarily yield optimization and reporting insights.

“Working with Digiday gave us a unique chance to understand the full breadth of perceptions of Programmatic Premium,” said Jason Fairchild, chief revenue officer, OpenX. “Through our combined research we found programmatic trading is past the tipping point and this disruptive change represents huge opportunities, but also serious challenges for publishers, requiring them to engage with the right partners and the right technology in the most controlled way possible.”

Solutions like OpenX’s unified platform manage all sources of a publisher’s demand including directly sold inventory, RTB and ad networks – enabling all demand channels to compete simultaneously for each impression. This maximizes yield for the publisher and gives appropriate access to inventory to each demand channel.

“We are proud to partner with OpenX on this research that gives deeper insights into the expanding interest in and monetization possibilities from Programmatic Premium,” said Nick Friese, chief executive officer, Digiday. “OpenX is at the forefront of helping publishers demystify this space and providing technical solutions to the issues that publishers identified in this research. Programmatic Premium is fundamentally changing the ad space and publishers and advertisers can no longer ignore its role.”

The survey was conducted between January 25, 2013 and February 9, 2013 and was presented at Digiday’s Publishing Summit in Scottsdale, Arizona on March 18, 2013. More than 800 publishers and buyers of digital advertising responded to the survey, making it Digiday’s most responded to State of the Industry survey to date.

For publishers interested in learning more, please join our Programmatic Premium webinar: Wednesday, April 17, 2013 at 11:00 am (Pacific) or download the white paper here.

About OpenX

OpenX is a global leader in digital and mobile advertising technology focused on unleashing the full economic potential of digital media companies. OpenX solutions provide a unique Software as a Service platform by combining ad serving, an ad exchange, a Supply Side Platform and content valuation.

OpenX Technologies, Inc., a wholly owned subsidiary of OpenX Software Ltd., is based in Los Angeles and is backed by leading investors including Accel Partners, Index Ventures, SAP Ventures and Samsung Venture Investment Corporation.

For more information, please visit: www.openx.com

About Digiday

Digiday — The Authority on Digital Media, Marketing and Advertising.

Digiday is a media company and community for digital media, marketing and advertising professionals. We focus on quality, not quantity, and honesty instead of spin. We cover the industry with an expertise, depth and tone you won’t find anywhere else. The Digiday team strives to produce the highest quality publications, conferences, and resources for our industry.

The Digiday website (www.digiday.com) is our content hub. We support that with our email newsletters: Digiday Daily and Digiday Brands. Our multi-day, destination events include the Digiday Exchange Summit, the Digiday Publishing Summit, the Digiday Agency Summit, the Digiday Innovation Summit, the Digiday Brand Summit, the Digiday Brand Summit – Retailer. Our half-day breakfast forums include Digiday Video Upfront Breakfast, Digiday’s Programmatic Advertising Breakfast and the Digiday Mobile Breakfast. Our awards programs are the Digiday Awards, the Digiday Video Awards, the Digiday Publishing Awards, the Sammy Awards (social) and the Mobis (mobile). At Digiday Content Studio, we help businesses and brands find a voice that connects with your customers. As trained journalists, editors and strategists, we know what stories resonate with people and how to tell them effectively. We use editorial, audio, video and more to tell your story across media and in a way that meets Digiday’s high editorial standards.

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