Any time I mention the word ‘programmatic’ in a meeting or on a call, people immediately assume that we’re talking about RTB, and the focus of the discussion will centre around remnant inventory.
For some reason, ‘programmatic’ has become shorthand for ‘RTB’. But this is definitely not the case, as ‘programmatic’ should be, and is in fact, equally as applicable to the premium tier as it is to low-value inventory.
To me, ‘programmatic’ really means ‘making things easier via technology’. Whichever side of the equation you sit, buy side or sell-side, remnant or premium, programmatic is about saving time, automating processes, reducing latency, removing complexities, eradicating mind-numbing manual approaches, and ensuring the whole process runs more smoothly.
The danger of ‘programmatic’ being hijacked by ‘RTB’ is clearly seen with the recent third-quarter New York Times revenues announcement. Denise Warren, SVP and chief advertising officer at The New York Times Media Group and general manager of NYTimes.com commented, “Programmatic buying is driving prices down”.
During a call with investors, Warren went on to say:
We are seeing pricing pressure on core banner display as business confidence weakens and as programmatic buying becomes more robust.
Here the concept of programmatic is seen as having a negative impact and becoming a major threat to publishers, but this is an instance where the terminology needs to be correct and the issue at stake in fact needs to be assigned to ‘RTB’.
The exchanges, trading desks, DSPs and SSPs were highlighted as hurting the business, but these platforms are just one side of the equation and the whole concept of ‘programmatic’ cannot be blamed.
Programmatic is not necessarily the issue here and when it comes to selling premium directly, using programmatic solutions to help deliver it and achieve the objectives of the advertisers are becoming essential.
In a highly complex market such as online display advertising, making it easier to do business is critical. If you don’t make it so, advertisers will look to those players who can – this is one of the reasons they are attracted to the remnant buy-side technologies in the first place.
What this issue with the New York Times highlights is the need for publishers to shift focus and start using the tools and technology that have been developed specifically for the premium arena. In particular, there needs to be a shift in balance from an obsession with volume to a focus on value, with emphasis placed on maximising the value of premium inventory – where true value lies for a publisher – rather than a fixation on low-value remnant, which, at the end of the day, has little real impact on profitability.
However, you need to choose wisely when it comes to offerings focused around premium to ensure they are very much ‘fit for purpose’. What needs to be remembered is that the tools required to help publishers derive greater value from premium inventory are very different from those that help monetise low-value remnant.
This is important as everyone is beginning to claim they have a programmatic premium solution and the very tools they are offering are those designed to solve low-value monetisation. In the blink of an eye they seem to be adjusting their business to embrace this new area but is it really true?
For example, can McDonalds change its model overnight to become a Michelin-starred restaurateur and all it implies? The answer is a resounding ‘no’.
I often hear people asking the question, “Can programmatic exist with premium?” However, as I have explained, I think this is an irrelevant argument – it can and it already does. As advertisers look to work with partners that make their life as easy as possible, programmatic is going to play a major role in helping publishers to deliver to it, for premium as well as remnant.
So what needs to be realised is that programmatic is not just RTB, and that RTB tools are designed to answer a specific need, which are very different from what is required to support the needs of premium inventory.