Thank you to everyone who participated in our Programmatic + Premium: Current Practices and Future Trends webinar, associated with our white paper of the same name (which you can download here). We had a great conversation with the hundreds who joined and, clearly, its a hot topic in our industry. If you missed out, here are some of the questions that I answered during the webinar.
If you have a question that I didnt answer, please share it with us on Twitter #ProgPremium or email me at progpremium@openx.com and Ill be answering those next week.
Now to the questions:
1. What is programmatic buying, and does it apply to Real-Time Bidding (RTB) only?
2. What does €œfirst look€ mean?
3. Now that publishers are getting more sophisticated with yield management, how do you see Programmatic Premium working in concert with those new strategies?
4. How can publishers bridge this data divide and be better equipped to get the full value of their impressions?
5. Can we use OpenX Market with our non-OpenX ad server, or do we need to use OpenX ad serving technology?
6. Whats future of programmatic trading, where will it go next?
Q: What is programmatic buying, and does it apply to Real-Time Bidding RTB only?
A: First, lets begin with defining programmatic trading, which to us includes both the buy side and the sell side. Programmatic trading provides an automated way for buyers and sellers to connect, eliminating the time-consuming, highly manual and error-prone insertion order process used by sales teams. Lets face it, the I/O process relies too much on spreadsheets and fax machines and is extremely inefficient. So automation is the defining element of programmatic trading. Programmatic buying, then, is a highly efficient and automated way to connect with programmatic sellers by automating and improving discovery, negotiation and workflow.
RTB is one way of implementing programmatic trading, but its not the only one. RTB is simply a protocol that enables real-time discovery (in the sense that the buyer is made aware of a buying opportunity), negotiation (in the sense that buyers can submit bids for an auction), and workflow (in the sense that the creative to be delivered is part of the buyers bid response). That being said, there are other platforms, such as isocket and Adslot, which also connect buyers and sellers in an automated fashion.
Q: What does €œfirst look€ mean?
A: First-look essentially means the publisher gives a specific buyer the right of first refusal. In other words, a buyer can decide whether or not to purchase an individual impression before its offered to other any other buyers.
First-look resonates with buyers who are interested in obtaining exclusive inventory for their campaigns, and theyre willing to pay premium rates for the privilege. First-look allows them to ensure they get 100% share of voice for the particular impressions they value most.
Theres another notion known as exclusive first-look. With exclusive first-look, buyers have right of first refusal for 100% of the publishers inventory.
Q: Now that publishers are getting more sophisticated with yield management, how do you see Programmatic Premium working in concert with those new strategies?
A: This gets at the heart of what we believe here at OpenX. In our view, publishers lose money when they make selling decisions in silos, which is the way theyve made their decisions historically.
Publishers cordon off a portion of their inventory for their direct sales teams to sell, which means all other demand channels are barred from getting access to this so-called guaranteed-inventory. However, at OpenX we believe that its in both the publishers and the buyers best interest to allow all demand channels to compete for inventory simultaneously.
Heres why: lets say a publisher sells a direct campaign to an advertiser at a $15 CPM. The ad server sends impressions to that campaign automatically. But what if an RTB buyer is willing to pay a $30 CPM for a particular impression? Should the publisher make an exception for those high bidders?
We think there are certain situations in which the publisher would be better off taking the $30 bid now with the full knowledge that theyll be able to meet the commitment that they made to the direct-sold advertiser later.
When publishers bifurcate the demand between guaranteed and non-guaranteed, overall yield decreases, which is why we believe publishers should centralize all of their demand channels within one platform, allowing all demand to compete simultaneously for inventory.
The single platform environment allows publishers to increase their level of sophistication they apply to managing yield by identifying which buyer values its inventory the most on an impression-by-impression basis. And it ultimately benefits the buyers by ensuring they get broader access to the impressions they desire for their campaigns.
Q: How can publishers bridge this data divide and be better equipped to get the full value of their impressions?
A: This is a pretty important question. Buyers leverage first-party and third-party data theyve gathered about users and publishers in order to inform their bidding decisions. As a result, they may bid $10 for a particular impression, $4 for the next impression and nothing for the third impression.
To the publisher, these buying decisions are a mystery, and that needs to change. Publishers need insight into historical bidding behavior of buyers so they can better understand who buys their impressions and under what conditions. Moreover, insight into buying behavior can serve as a lead-generation tool for publishers in that theyll know which advertisers to pursue for direct relationships. Of course, this benefits buyers as well because it encourages premium publishers to make more of their inventory available to those buyers.
The second piece of this is how publishers can apply that information. Once publishers know who values each segment of their inventory, they can negotiate more custom deals with those buyers, such as first-look or custom price floors. The buy-side also benefits, because they have access to more of the impressions they value most.
Q: Can we use OpenX Market with our non-OpenX ad server, or do we need to use OpenX ad serving technology?
A: You can access OpenX Market, OpenXs global ad exchange, using any ad server. Our goal is to help every publisher increase yield €“ regardless of their ad-serving environment.
That said, we do believe there are advantages to our end-to-end platform because weve seen the value of centralizing all of your demand in one place. Yield goes up, and inefficiencies go down.
<a name="q6">Q: Whats the future of programmatic trading, where will it go next?
A: Were just scratching the surface of programmatic trading, and believe that the vast majority of ad spend will ultimately be traded via automated means, rather than the highly manual I/O process that accounts for most ad spend today.
Programmatic trading unlocks demand, which is a good thing for publishers seeking to increase yield, which is why we see a future in which most media is traded programmatically.
Now that doesnt mean your sales force goes away. Sales teams are very important for crafting relationships with buyers, and working with buyers to identify packages that are most attractive to buyers. But, ultimately, the execution of that needs to be more automated. Its hard to argue against the value and efficiency of automated workflows, automated discovery, and automated negotiation.
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