• by Jeremy Hlavacek , December 18, 2014

I have always loved the holiday season. It’s great to spend time with family and friends, celebrate the past year and get excited for what the next year holds.  But, despite all the joy and merriment, many studies show that anxiety and depression spike in conjunction with the holiday season -- kind of strange, right?

But when you think about it, this dichotomy makes sense. Many conflicting emotions come out during this time of year. Eagerness for a relaxing break comes with unprecedented stress to frantically finish tasks. Optimism and excitement for the new year is accompanied by anxiety about what the future holds.

For online publishers, it’s no different. Rushing to finish strong in 2014 is accompanied by trying to thoughtfully plan for 2015.

And, perhaps nothing is more confusing or conflicting for publishers than their programmatic business. Is it a good thing? Is it a bad thing? How will the year end? What will happen next year?

In the spirit of mixed emotions, here are three facts about the programmatic publishing business that have both pros and cons in 2015.

1.     Fraud is a large problem in the programmatic ecosystem. At this point, no one questions that the promise of the programmatic marketplace has been stained by bad actors. Numerous schemes to bilk both advertisers and publishers have been cooked up in the dark corners of the Internet. The good news for publishers is that major marketplaces are moving aggressively to weed out bad supply and return the focus to premium pubs, which should only help CPMs. The bad news is that some of the bad apples are spoiling the bunch. If you only read headlines, it’s easy to assume that premium pubs are part of the problem and that programmatic, as a whole, is a polluted space. This view overlooks all of the amazing technological advancement of recent years. 

Pro: Flight to quality. Con: Risk of going backwards.

2.     Everyone buys against a data set. In the early days of programmatic buying, many buyers were thrilled that a DSP allowed them to spray impressions across exchanges in search of the cheapest price. However, smart buyers quickly realized that there was more to a campaign than cheap reach. Performance matters -- and one of the best ways to get it is through data and targeting. Today, every sophisticated buyer has layered in data sets to maximize their campaign: retargeting data, first-party data, third-party data, lookalike models, etc. As a result, certain impressions are identified as highly valuable and buyers are willing to pay top dollar for them. The downside is that it is very difficult for publishers to support that multimillion-dollar budget that targets left-handed grandmothers in Omaha.

Pro: Better CPMs. Con: Scaling is hard.

3.     Programmatic is bumping up against the premium space. Given trends #1 and #2 above, it’s no surprise that more and more buyers want to strike “premium programmatic” deals with publishers. Great news, right? No more race to the bottom! Yes and no. It’s great to see higher CPMs come out of the programmatic space, but it also brings the channel conflict issue back to the table. How should sales leaders manage demand through their direct and automated channels? I think the answer is to remember that everyone is on the same team, but there will inevitably be issues to work through.    

Pro: Realizing the promise of programmatic. Con: Change is hard.

So, how can we focus on the pros and minimize the cons?

I’m not sure yet. Ask me next year after we get through the holidays.