I’d like to say that it's insane.
Imagine walking into a car dealership and then simply telling the salesperson what you will be purchasing a car for. Do you think a dealership would let you walk out with the keys? That’s exactly how RTB exchanges work today.
Publishers, much like the salesmen in the example above, are asked to sit on the sidelines while buyers get to determine the value of their display inventory -- without oversight. Once that’s determined, advertisers embrace the opportunity to purchase inventory at scale.
In an article titled "Header Bidding Killed Programmatic Direct," Jed Nahum (the former head of Microsoft’s global programmatic sales team) makes it quite clear what the priorities of “buyers” are when their needs are prioritized in a transaction (emphasis mine) over publishers and sellers:
“When buyers decide, every buy potentially delivers data to their data management platform (DMP), enriching their knowledge of their audience and making them better marketers. The problem with programmatic direct is that it doesn’t incorporate the DMP in the same way RTB bidding does. And since buyers control the spend, they’re looking for ways to feed the data beast.
I learned this talking to buyers. They told me that the real value of programmatic to them was being able to buy only the stuff they wanted and none of the stuff they didn’t.”
As the quote above illustrates, the real value of publisher inventory, according to buyers, isn’t the eyeballs on placements or even brand recognition. It’s the data that can be used to “feed the data beast.” That’s usually industry speak for buying and selling first-party user information to other third parties to build better targeting profiles for further advertising campaigns.
The exploitation of this information, and its continued misuse throughout the industry, is exactly how we’ve arrived in the present advertising landscape rife with ad blockers and distrust. Yet we’re doubling down on RTB as a model.
Is it shocking that publishers have become skeptical about the prognostications spouted by RTB companies? To publishers, visitor data is sacred, and any mention or attempt to procure that information should be taken under serious consideration.
The reality, however, is that this sales paradigm exists today because robust, direct sales tools platforms have been less than satisfactory, and expensive to build internally. That’s changed. There are a number of companies determined to restore the sales balance and empower publishers to regain control of their future, restoring the value of their inventory by selling directly to advertisers.
Publishers need to work on restoring the publisher-advertiser relationship, separating themselves from intermediaries who stand to gain from pushing them apart. To date, RTB companies have done nothing more than inject themselves into the middle of the process. Just ask mainstream media outlets and journalists how that monumental paradigm shift has influenced growth throughout the industry over the last decade. The results of those inquiries will tell a harrowing tale worth remembering as we take the next step into advertising technology’s future.