Can Programmatic Benefit From Some Vertical-Specific TLC?

While programmatic has quickly become an important term in many marketers’ digital arsenals, widespread adoption still faces challenges. For one, the concept still perplexes some, with a recent poll showing only 23% of marketers understand programmatic buying and use it to execute campaigns. One of the largest hurdles inhibiting wider adoption is digital media’s movement toward a vertical-focused marketplace. For programmatic technology to become ubiquitous within marketing strategies, it must deal with this movement.

Today’s increasing wealth of data has bred an economy of higher accountability where both buyers and sellers are looking for solutions that will enable them to tie spend to ROI. While programmatic has brought benefits to the broader marketplace such as scale and cost efficiencies, to date it lacks a great answer to marketers' more specific vertical needs.



The market has lacked deep domain-level expertise and service for specific verticals since VerticalNet (now VertMarkets) in the pre-dotcom burst. Nearly all the programmatic players that have emerged to date have vertical-based divisions, products or packages, but they lack vertical-specific expertise and teams that ensure ads reach a specific audience.

As a result, buyers lose out on major opportunities to engage with their audiences in a more personal way, and vertical-specific publishers miss opportunities to command higher premiums and revenues. Yes, advertisers can still access consumers on vertical sites through retargeting, and publishers using an SSP can earn more revenue from their inventory, even if the advertiser is only leveraging one small kernel of data to target the consumer.

But there is much more at stake here. Vertical publishers have very specific and actively self-selected audiences. By combining those attributes with other data sets, the publishers stand to profit far more than they would by only using outside third-party data sets. Advertisers would benefit from the same. They’d have a much more detailed audience profile, enabling them to drill down into more detail, almost the same way consumer-facing advertisers use Facebook’s real-time exchange.

For programmatic to get from good to great, programmatic practitioners need to focus on building domain-level expertise in any vertical they do business with. This means not just a passing interest or a site list. Dealing with verticals only on a site-list level is rudimentary; advertisers willing to take their chances on that tactic are better off using a network rather than the full power of RTB.

Advertisers need solutions that better speak to their specific, vertical business requirements, and they are best served by cross-pollinating media within specific verticals. That requires not only domain expertise, but also the manual work to configure campaigns. For all of the attention on programmatic technology, what we’re really describing here is a team of people who know and understand how vertical-oriented publishers work and how to help advertisers reach unique audiences. This isn’t something that gets built with an API plug-in and a brief integration period. It requires accumulated knowledge, which takes staffing, training and practice.

From the publisher side, this combination of domain expertise and skilled staff can lead to higher lead-gen conversions, increased penetration within verticals, higher pricing, higher inventory yield and higher value. Do you know any publisher, larger or small, that would be unhappy with just one of those possibilities? I’m not sure you can find one.

As the online audience continues to fragment, advertisers will increasingly look to reach audiences on highly specific vertical sites. When programmatic companies can combine their technological prowess with a vertical experts, they’ll be able to tap into much rich audience targeting that will benefit everyone in the ecosystem: the advertisers, the publishers, and the companies themselves.
1 comment about "Can Programmatic Benefit From Some Vertical-Specific TLC?".
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  1. Mike Einstein from the Brothers Einstein, May 6, 2014 at 5:20 p.m.

    I think a lobotomy is more in order.

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