• by Christian Baesler , Op-Ed Contributor, May 12, 2016

Publishers are smart enough to realize that advertisers want access to their audience and inventory at the lowest possible price. With a direct sales approach, rate cards and sales compensation packages keep prices in line with business requirements.

But on programmatic exchanges, making sure publishers get the right price for their inventory can be a bit trickier. While publishers have a lot of levers they can pull, including a variety of pricing strategies, most are not making the most of any of these strategies. According to a recent publisher survey by Operative, while 80% of publishers use programmatic, they are only earning about 5%-10% of their digital advertising revenue from the channel, as many relegate only their lowest quality inventory to the open exchanges.

Rather than fear the effects that programmatic might have on the rest of their advertising business, publishers should work to optimize a channel that could actually offer more pricing competition and more scale with less work. Advertisers don’t just show up with their best price overnight. There are several important things publishers must do to more effectively “sell” their inventory on programmatic.

Diversify the Offering

The beauty of programmatic advertising is the wealth of choice that it offers media buyers. Creating a richly diverse product catalogue often yields higher prices. Publishers should slice their inventory as granularly as they can, with descriptive labels that encourage high prices. A sports website could get higher location-targeting prices from drilling down below “NBA” or “NFL” by labeling inventory at a team level, for example. Rich-media and video placements earn more than banners, so they should be separated. Breaking news and fresh content might be highlighted separately from evergreen material.

However, granularity doesn’t always earn the best prices. While it might be a good idea to showcase mobile advertising separately from display if it performs better than average, sites with modest mobile performance are better bundled with their display channel.

Be Transparent

Recently revised Inventory Quality Guidelines from the Alliance for Audited Media encourage advertisers to request increased transparency. Many media buyers actually set rules to ignore non-transparent inventory. For high-quality publishers, this is a good opportunity to rise above the fray. AdX and Rubicon offer the opportunity to do either branded or anonymous floors. For a top-quality publisher, it almost always pays to be branded.
To ensure that direct advertisers don’t get a better deal through an exchange, publishers should make sure that they segregate inventory so that their performance on direct deals is obviously worth the higher cost.

Showcase viewability metrics if they are favorable, too. Also, make sure to label the ad placement. Above-the fold might command top dollar at first, while other high-performing placements might get increased competition if performance is particularly good over time.

Pick Up The Phone

There are many reasons why a publisher might have a “programmatic seller” in place. While many publishers empower their direct-sales teams to sell programmatic inventory, a specialty seller will have the time and expertise to identify advertiser interest that usually would not be on the target list for the sales team and help drive not only better CPMs for programmatic but potential new direct business, like a buyer who consistently bids at high volumes, but rarely wins.

Publishers need to think of programmatic as a technical foundation with a human element layered on top. Automation creates scale and lowers manual labor, but the people on the other end make the ultimate decisions. The publishers that marry technology and the art of selling will fare the best