• by Seth Demsey , October 17, 2013

While the tsunami of buzz around “Programmatic Upfronts” reached new heights during the recent Advertising Week events, questions about what it really means remain. To some degree, I can see why — the industry is accustomed to the tradition of “TV Upfronts,” where advertisers come to schmooze with celebrities and check out the broadcasting goods, and it’s all about scarcity. But as the consumption of content on computers, smart phones and tablets continues to surge, TV is far from the only place to reach an audience at scale. Why, then, should broadcast be the only medium with an “Upfront?”

Below are the top five most common myths surrounding programmatic technology and the value of a “Programmatic Upfront.” I address the naysayers and make the case for a new advertising tradition that’s modern, tech-enabled and ready to evolve the definition of “prime time.” 

MYTH VS. REALITY 

1) Myth: Programmatic inventory isn’t scarce – there’s no reason to buy “upfront.”

Reality: Upfront buying is about securing an advantage, while maintaining control of your campaigns. In some cases it’s about securing premium inventory in a scarce environment (i.e. TV), but beyond that, a programmatic upfront is about improving the resources in shortest supply: time, money, people, inventory and results. 

• Time: setting up once and letting technology do the work thereafter
• Money: negotiating power earned with upfront commitments
• People: fewer bodies needed to manage day to day
• Inventory: access to reserved impressions via a programmatic engine
• Results: improved with always-on and optimized media

2) Myth: Programmatic and Real-Time Bidding (RTB) are the same thing.

Reality: Programmatic is synonymous with automation, not a specific media purchasing model. Real-time bidding is just one feature within this automated environment that also includes robust publisher offerings and other value-added offerings such as private exchanges, first right of refusal, and automation of previously manual ad buying and serving processes. 

3) Myth: Programmatic = remnant inventory. You’ll have to negotiate directly to get the premium inventory.

Reality: Programmatic = automation of buying processes that were previously manual. There’s a misperception in the market that programmatic buying is only for non-reserved or remnant inventory, and that’s based on outdated thinking and the historic norm that remnant inventory makes up the majority of network and exchange inventory. Technology has changed the way digital inventory can be bought and sold, and today through DSPs, exchanges, and SSPs, premium inventory is increasingly being traded in a programmatic environment and commanding premium prices. Publishers and advertisers alike are seeing true financial results and resource benefits, and because of that, we expect more publishers to make reserved inventory available via programmatic buying. The net gain is efficiency and yield, whether bidding in real-time or automating a premium reserved buy. 

4) Myth: Direct sales are the only way to get top dollar for premium inventory. 

Reality: Programmatic tools expose publishers to a wider pool of buyers competing for placement on their properties, while providing for significant controls on that demand, including price floors and advertiser “blacklists.” This does mean that increasing demand and competition from advertisers who want an automated buying process can coexist with publisher-controlled parameters and pricing. In this environment, publishers can choose to sell directly or programmatically based on the desired outcomes for their campaigns. 

5) Myth: All inventory will be sold programmatically.

Reality: Absolutely not. Programmatic buying is and will continue to grow at a rapid pace. Inventory that is experiential or a marketing service (a large market) will continue to be sold directly, driving significant awareness and brand life for marketers.