Commentary

Publishers Unite: Ad Tech 2.0 Has Officially Arrived

It's official. Ad Tech 2.0 is here. And if you needed more proof, look no further than the recent coalition of Microsoft, AOL and Yahoo -- which have joined together to create a common set of API specifications for their premium programmatic sales efforts.

Ad Tech 2.0 is all about bringing the same tools and technology to sellers that once resided almost solely in the hands of the buyers. The fact that the premium publishing giants in the industry are actually leading the charge to make these tools accessible and speed adoption with the industry marks a true paradigm shift from the Ad Tech 1.0 era.

Some of the pillars of this new world order:

  • Programmatic and premium are not diametrically opposed. This has never been the case. But in the early days, programmatic buying was often associated with lower CPMs. The reality is that programmatic does not equal remnant. Nor is programmatic synonymous with RTB. At its core, programmatic is any machine-to-machine selling and buying that improves efficiency in execution, distribution and scale. For publishers, programmatic also helps optimize yield by mathematically determining the best impression to serve to each ad request based on forecast modeling.

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    In truth, data-driven, programmatic media selling that surfaces and allocates highly sought-after audiences often brings upwards of 30% increases in CPM for publishers. This is a win for publishers who can use programmatic technology to extract the most value from their audience, and a win for advertisers who can reach their exact consumer target with minimal waste.

  • Open technologies open up markets. Closed technology fragments and impedes growth. Even rivals will sometimes work together to create a seamless, standardized way for demand sources to buy their wares. Working together to get the pipes flowing must come before competing for share. Whether talking about the Open API technology being developed by MS, Yahoo and AOL or the OpenRTB technology used by some supply-side platforms, the trend is for cohesive integration between operating systems.
  • Publishers still want control over their inventory. Solidarity by three of the largest publishers in the industry to take a leading role in shaping the rules surrounding programmatic technologies shows that they are all agreed on one thing -- they want to be in control of how and where their inventory is monetized. Any ad technologies developed for supply-side media company must begin with this premise. Publishers may want tools to help them sell, but they clearly do not want to be told how to sell.
  • Technological innovation on the supply-side will likely start with display -- as is primarily the focus on the MS, Yahoo, AOL partnership -- but will move quickly into video, followed by mobile, and linear television. Just as programmatic ad technology began with display on the demand-side, the same will follow for programmatic adoption on the supply-side. However, as we are seeing across the board, the market speed of adoption by the supply side is being accelerated. As a result, the movement of programmatic into these other channels will be swift. The pace is being partially driven by buyers' demand. Advertisers' interest in programmatic buying is increasing dramatically across all media, all screens and all formats. As a result, media companies need to make their inventory available in this way, or risk losing share to those who do.

This move by three major publishers to take the lead in setting industry standards and developing shared protocol around premium programmatic selling sets a great precedent for the industry. We have seen time and again that a lack of standards -- whether talking about the definition of viewability in video advertising, or the complexity of technologies surrounding linear television -- holds back progress. It is our hope that momentum for this initiative spreads more broadly across publishers, and that its success sparks other such initiatives around the myriad standards yet to be agreed upon.

1 comment about "Publishers Unite: Ad Tech 2.0 Has Officially Arrived".
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  1. Jason Burke from clypd, Inc, October 4, 2013 at 5:08 p.m.

    Brad, great points. Supply-focused inventory protection tools and standardized/open communication protocols are necessary to remove barriers to entry in this world.

    However, I'll argue that the majority of the innovation in this space will be more prevalent in some of the more premium mediums (video & linear television) than in display. The economics of these channels and the technical & operational challenges with programatic sales in these environments more than justifies the effort to innovate.

    Innovation needs to come not only from the major publishers and inventory owners, but also from the ad tech platforms that are facilitating these transactions. All of the major players, competitors or not, need to work together to move the industry forward.

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