There’s no doubt that programmatic advertising’s star is rising. The industry, which didn’t really exist five years ago, is predicted to reach $20 billion by 2016. 2014 saw programmatic ad spend top $10 billion, taking its first real steps into the mainstream spotlight. As with any new and popular technology, however, there are people who want to take advantage of the benefits of programmatic—especially once they’ve seen others profit from it immensely—without fully understanding its requirements. This is especially prevalent with automated guaranteed, a type of programmatic advertising usually used in the premium space, which utilizes fixed pricing, reserved inventory and one-on-one participation. This eagerness to realize the success of programmatic has led to several major misconceptions among publishers, and these misconceptions result in, well, a lack of results from their programmatic efforts.
This ends up hurting everyone. The publishers don’t generate revenue from automated guaranteed and the advertisers don’t get increased budget efficacy from access to programmatic ad space. The reputation of programmatic as a whole then decreases, resulting in unfair criticism of the industry. To realize the true potential of automated guaranteed, it’s crucial that you understand the most common misconceptions surrounding it.
Misconception #1: Programmatic automatically makes money for publishers.
There is this notion among some publishers that programmatic is this kind of “philosopher’s stone” that turns ad space into money, and that all publishers have to do in order to cash in on it is plug in to the programmatic solutions, then sit back and watch the money roll in. Automation doesn’t make success automatic, and when publishers take this “set it and forget it” approach, they’re shocked when they come back to find that no one is buying. Getting your ad inventory hooked up to programmatic solutions is only step one.
Misconception #2: With programmatic, advertisers will flock to you.
To be fair to the “set it and forget it” folks, their concept of automated guaranteed’s requirements—or rather, their assumption that there is a lack thereof—stems from the idea that simply hearing that a premium publication offers programmatic will have advertisers salivating like a wolf in a Tex Avery cartoon. Advertisers, however, aren’t just going to come running at the call of programmatic. Even if the ad buying and placement is automated, they still want to know if the placements that they’re putting their money on will generate conversions. If the only information you offer them is “hey, it’s automated!” then they’re going to look elsewhere.
Misconception #3: Programmatic is the bottom of the funnel.
There’s no doubt that brands are embracing automated guaranteed because it gets them quicker and better access to ads they want to actively buy, but they also recognize that using programmatic technology doesn’t guarantee increased conversions for their marketing efforts. Brands will seek out and buy premium units, such as sponsorships, takeovers, high impact and video via programmatic, but not unless they have a sense of what they’ll be getting for their investment. After all, one of the biggest benefits programmatic offers is budget efficiency, allowing brands and advertisers to stretch their budgets and reduce wasted ad spend, as opposed to just increasing conversions.
So, now that the major misconceptions have been identified, what can these eager-yet-misguided publishers do to get back on the path to automated guaranteed?
Treat programmatic as an extension of your sales team
This shows ad buyers that you’re not just trying to sell them magic beans and that you’re adapting to alternative methods based on their buying preference. It might be tricky to get your sales team on board with this, because it’s easy to see any kind of programmatic as a direct threat to their jobs. However programmatic, and especially automated guaranteed, isn’t competition, but rather a tool that can be used to power a more robust and organized sales team. To be sure, there will be a certain degree of learning in order to utilize programmatic toolsets effectively, but that shouldn’t be a problem for motivated sales teams.
Offer the same inventory through programmatic channels as you do directly to advertisers
The biggest surprise about automated guaranteed for many publishers is that advertisers are eager to purchase the publishers’ most valuable inventory. Advertisers and brands don’t see this as an arbitrage play, they see it as a path to a more effective partnership. They value the efficiency and transparency involved in being able to purchase your most valued digital inventory programmatically. The decreased “TTL” (Time To Live) for programmatic campaigns enables them to execute their plans more quickly. Speed is important to advertisers these days with the other advertising options out there that make it incredibly easy to allocate budget. Automated guaranteed is less about “automating” your digital sales so much so that it becomes a commodity, and more about automating your digital sales to keep up with the pace at which campaign decisions are made these days. Let’s be honest, it’s not that hard to fill out an Insertion Order, print it out, and fax it to confirm a campaign. Anybody can do that. That’s not the main value prop of automated guaranteed. The main value prop is accessibility at scale. Having the full “menu” of available options in front of you to make a decision vs. having to ask the waiter to repeat the “specials” 5 times is what we’re going for here.
Remember that you have to maintain a relationship with the buyer
Building on the concept of treating programmatic like sales, it’s important to remember that questions about desired KPIs, deliverables and quality content still matter in an automatic guaranteed environment. Without that, there’s no reason to believe it will be beneficial. There are programmatic “middlemen” who have a tendency of keeping the waters murky between advertisers and publishers. It’s best to avoid these intermediaries, because any programmatic partner that doesn’t offer the fullest amount of buyer transparency is probably not a great partner and will drive buyers away in fear of wasting their ad spend. The good news, though, is that there are a lot of companies in this space, and if one doesn’t work, there are plenty of options to choose from.
At the end of the day, the best way for publishers to get the most from their programmatic efforts is to remember that programmatic is not automatic money in the bank, it’s a tool that can be used to increase the chances of advertisers purchasing ad space. It’s the equivalent of being a business owner in Las Vegas (the town that never sleeps) who puts a sign on the front door that stays lit all night vs. only being visible during the daylight hours. That tool can help bring in fantastic results, but not by itself. It needs to be operated properly in order to function as intended.
Despite the size of the market, just remember, programmatic is a piece of the puzzle, not the puzzle itself.