Ad Tech's Next Step

Though it was released nearly 80 years ago, Charlie Chaplin’s "Modern Times" remains the quintessential film about technology and its relationship to control. The scene in which Chaplin gets swallowed up by the cogs of an enormous machine is the classic image of technology that was designed to make our lives better but ends up sucking us into its workings.

Like Chaplin, we sometimes find ourselves facing new technologies we do not control, wondering whether this is really progress. Those of us in the advertising technology industry know the feeling. With all our technological innovation, it is sometimes easy to forget that we’re not in the business of creating advanced algorithms and automated processes, but of helping publishers and advertisers deliver relevant content to end users more efficiently. Technology is the key to efficiency, but the trick is developing technology that enhances, rather than erodes, our control.

Both advertisers and publishers are eager for more efficiency through technology: digital advertising dollars continue to flow to programmatic solutions, with direct sales over RTB slated to grow annually by an average 176% to $6.3 billion globally between 2012 and 2017, according to research firm IDC.

What brings so many people to programmatic is its ability to serve all players efficiently. Publishers maximize revenue, advertisers get better value, and consumers get relevant ads. This path started with using RTB for fill, and has proceeded to solutions like Private Marketplace. If the industry is to continue its growth, it needs to follow this evolutionary path, and the next step is programmatic direct for premium guaranteed inventory.

The growth of programmatic direct stands to benefit the entirety of the advertising and publishing ecosystem. Advertisers and media buyers will appreciate a streamlined method for buying, reserving, and tracking inventory and media buys more easily than before.

But automating the execution of premium guaranteed deals is no small step. While nobody is happy with the inefficiencies of faxing IOs or emailing spreadsheets, there is a reason why these manual processes still exist in 2014. Though expensive and inefficient, they afford a great deal of control over the process and ensure that premium branded inventory is bought and sold as such.

Our goal as an industry is to offer technology that eliminates needless manual steps while retaining the greatest degree of control over selling and buying of inventory, creating packages, setting prices, and allowing for approvals and review of new offerings and deals.

But the truth is that the process of moving to programmatic direct solutions is a marathon, and not a sprint. While IDC predicts that by 2017 83% of direct deals will be transacted over programmatic platforms, there is a lot that must be covered to get us there -- not least of all, a shift in the thinking of media buyers and sellers about how platform-based solutions can make their lives easier, and more profitable. Consider this column a single step in that marathon.

Done right, programmatic direct solutions -- especially for premium guaranteed inventory -- should be designed to bolster the publishers’ sales teams by giving them more powerful tools. Rather than trading emails and double entry, integration between buy-side and publisher-side systems can execute deals the sales team worked hard to win.

In other words, when it comes to premium inventory, it is critical that we automate in such a way that we are operating the machine, rather than the other way around.

With our hands on the levers, we can drive efficiency without getting swallowed up by the cogs.

Tags: programmatic, rtb
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1 comment about "Ad Tech's Next Step".
  1. Andy Kowl from ePublishing , August 14, 2014 at 8:01 p.m.
    "Publishers maximize revenue"?? By loosening advertisers' ties to their publishing brands and following readers instead? Compared to selling direct at 5-25x the rate? I'm mostly in B2B where publishers still get $40-$125 CPMs. How much programmatic advertising sells for an eCPM of even $10? Somewhere between none and not much. Let's not pretend this is for publishers' sales teams. This is for the inventory left after they are done selling less ads -- or for those whose business model precludes sales teams.