How Buy-Side Can Fix Video Supply Puzzle

Programmatic is officially the video ad tech buzzword of the year. But  if you take a look at an ad trade publication or attend an industry conference, you’ll notice much of the conversation is weighted towards publishers. Tips, strategies and plans for getting the sell-side to move faster abound, and rightly so. It’s no secret that the digital video industry has faced a supply scarcity problem for some time now.  Consumers continue to seek online video in an ever-expanding array of places and destinations, yet for a variety of reasons publishers still aren’t meeting the demand.

But the responsibility weighs on more than just the sell-side. There are things the buy-side can do, in particular demand side platforms (DSPs), to push forward greater efficiencies in programmatic, including:

  • Leverage media channel’s specific supply source parameters: We all know that different media channels are suitable for different marketing objectives. So why do multichannel DSPs tend to qualify all media channels the same as display, on a referring URL basis? This grossly miscalculates the true value of placements in online video.  The player size, initiation status, or skippability of an online video ad unit affects performance, and these attributes don’t exist in display. Algorithms need to think like media planners, and understand the inherent differences in media channels in terms of how they impact advertiser outcomes.
  • Think quality over quantity for supply integrations: The reality is, integrating 10 different supply-side platforms (SSPs) will get you similar inventory access as if you’d integrated three and leveraged those partnerships to the fullest. DSPs should prioritize using all the features of the SSPs they work with instead of always seeking out more inventory. SSPs in today’s market can offer DSPs loss notifications, vertical categorization, media channel specific targeting parameters and private marketplace capabilities. Take full advantage of those tools first and then evaluate the need for additional SSPs. The simple truth is that SSPs can garner more inventory from publishers if they have more concentrated demand, so it behooves DSPs to stick with a smaller pool of partners and nurture the relationships they already have before onboarding new partners.
  • Expose your demand with buyer identification and multi-bid: Agency trading desks aggregate millions and millions of dollars in demand, but today that demand is obfuscated from publishers. This hurts the programmatic space and its ability to grow. We need publishers to change their initial ad serving decision from “Is this impression reserved?” to “How do I sell this impression for the highest amount?” Until then, we’re still competing with a direct sales queue. So how do we get there?  By implementing a multi-bid process and identifying all buyers in the RTB ecosystem. DSPs today issue just a single ad response for every placement opportunity – typically the highest bid – and they transmit that one bid to the SSP. But what if that DSP had a hundred buyers interested in that placement? Publishers, presented with data aggregated from the SSP, only see a fraction of the total demand for their inventory. Therefore they undervalue the programmatic opportunity. DSPs transmitting all bids will lead to publishers adding more of their typically direct sold reserved inventory to the programmatic space, as they’ll recognize their paychecks will be larger if they do so.



There’s one more thing that both sides can leverage to help grow programmatic: Deal ID.  A Deal ID is an insertion order that outlines unique deal terms between a publisher and an advertiser, and they make RTB more effective by adding a universal identifier to specific aspects of an advertising campaign (e.g. homepages, channel sections, contextual targets, demographic, behavioral, etc.).

For publishers, Deal IDs set parameters for the buyers (DSPs, ATDs or client direct), allowing a publisher to drill down to one partner and even reach segmented inventory that they themselves can determine. For buyers, Deal IDs help target this specific inventory against the flood of open exchange traffic, enabling them to spend more on these segments and reach the targets they are looking for, which ultimately means more successful campaigns.

We all have a part to play in ensuring programmatic, and RTB continues to climb at the rate we’ve seen over the last few years. By doing so, publishers will hopefully release more inventory and capture more of the programmatic budget, which leads to what we’re all working toward: more revenue!

2 comments about "How Buy-Side Can Fix Video Supply Puzzle".
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  1. Mike Einstein from the Brothers Einstein, July 17, 2013 at 11:14 a.m.

    Alex, with all due respect, the supply scarcity you cite reveals a fundamental misunderstanding of the supply and demand dynamics of on-demand media.
    The fact is, the digital media supply is a mirror reflection of consumer demand, to wit, a pageview is the pure causal effect of a conscious content selection. As such, the media supply and the audience demand are in actuality one and the same, because a pageview doesn’t even exist until a measurable consumer choice triggers its creation.
    Three simple truths bear this out: 1) No one demands more ads. 2) Everyone demands more content. 3) No one and everyone are the same people.

  2. Jason Burke from clypd, Inc, July 17, 2013 at 4:54 p.m.

    Alex, you bring up great point about multi-channel DSPs incorrectly borrowing attributes from another channel. Most of those players started their lives as a DSP in Channel X and eventually expanded into the Channel Y reusing the same technology, strategy, success metrics, etc. The same story is playing out with digital video ad networks and ad exchanges attempting to move into mobile video and more recently into television inventory -- certainly a lot of overlap across the channels, but the differences are stark: the economics and the KPIs are different and in most of the channels, the technical infrastructures differences result in a suboptimal outcome when these players use a tool built for a different job. Both are swung in an attempt to hit a ball, but can't use a baseball bat to play tennis.

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