• by Skip Brand , July 2, 2013

Tom Shields, the co-founder and chief strategy officer of Yieldex,  is concerned about the huge misconception many in our industry have regarding programmatic. “Many people still assume programmatic equals RTB,” Shields notes. Of course, it doesn’t. There is another side of programmatic, he says: “The process of automating the sale and related processes that are still handled manually.” It’s something that publishers should be eyeing to streamline internal processes, but most aren’t.

In fact, regular readers of this column know that automation and programmatic aren’t favored by many top publishers. For most premium sites, direct-sold, custom ad programs still deliver the lion’s share of revenue. Some will put unsold inventory on the exchanges, but many are reluctant to even experiment with this and will leverage their sales team to sell even standard inventory.

Shields and I agree that the two revenue streams can be seamlessly augmented with premium programmatic. “There are two primary flavors: the private exchange or marketplace, and programmatic direct, which is the guaranteed buy,” explains Shields. “The private exchange creates a mechanism so advertisers know who they’re buying, but it’s still RTB. You’ll still bid on each individual impression and decide whether or not to take it. Programmatic direct, on the other hand, takes all the manual work the sales force does and automates it.” While selling custom programs will always require skilled sales professionals, many publishers have their sales teams selling run-of-site ads on a CPM basis.  “That shouldn’t take a salesperson’s time,” Shields contends.  “Run-of-site sales should be a standardized process, executed much more efficiently and effectively.”

Shields has spoken to several comScore top 100 publishers, who are eager to participate in programmatic, but are concerned about maintaining their differentiation.  “They want to make sure that people understand they’re different and therefore worth more,” he says.  In his experience, publishers are viewing programmatic direct as an interesting compromise. “Publishers can actually differentiate themselves,” Shields says.  “Advertisers know they are buying NBC and what they’re getting on that site. But as a publisher, I can transact efficiently and effectively using an automated process that enables me to accept more buys, more quickly, with less overhead.”

Another advantage for publishers is that they make their first-party data available programmatically while retaining its value. Generally, if that data is on an exchange, it’s not differentiated. Buyers may not know it’s available or recognize its value. “But if you come directly to the New York Times to buy small-business owners, the value is higher because the publisher knows who those small-business owners are,” says Shields. “If you can make it easy for advertisers to buy a million small-business owners next month, why wouldn’t you automate that whole process?” Ultimately, it’s all about making it easier to buy and sell high-quality inventory.  Shields wants to complement the process so that it’s equally simple for buyers to take advantage of targeted data.  “And that,” he finishes, “should be much more valuable than anything you find on the exchange.”