The hot potato in display advertising right now is definitely real-time bidding, something that goes for both the supply side and the demand side of the now famous display eco landscape originally created by LumaPartners.

But to the wider digital marketer, the term “real time bidding” can perhaps be somewhat misconstrued.  

Digital media doesn’t need to be traded based on a auction and for this reason, the term ‘automated trading’ is becoming increasingly popular instead and something we are beginning to use more readily when communicating the benefits to agencies, advertisers and publishers.

The current market

The potential for automated trading across the display industry is huge, which is the reason why so many companies and so much venture money fighting to deliver every single impression through automated trading.

Automated trading for display has been oversold for some years now and has yet to get full traction outside the US.  

Yes, the market is growing but not fast enough. The upside is that we now have some really exciting companies with proven technology on both the supply side and the demand side, reducing the amount of “people time” required when negotiating and trading inventory.

Demand side is more than ready

Agencies and advertisers are already using platforms like demand side platforms (DSPs) and trading desks for automated trading; they are even testing several side-by-side to figure out where to find the best uplift for every single campaign.

The inventory available for trading is accessible through the usual suspects: Google, Yahoo, Microsoft and then a couple of SSPs, which are aggregating, inventory across publishers. Nonetheless, agencies and advertisers are still screaming out for yet more inventory across all categories including premium. Put simply, they need supply to obtain reach, which big brands inevitably need in order to achieve their marketing KPIs.

With this in mind and in a world where digitalization is happening all around us, why are publishers still trying to hold on to trading media inventory as we did in the mad men era? Does it make sense and who is stepping on the brakes? 

The Google and Facebook advantage

You can be an early adopter and get an advantage or be a late adopter and be one step behind.

It´s not a big secret that publishers are losing advertising dollars to Google and Facebook every single day. Google and Facebook are one step ahead and can offer better targeting options and higher efficiency due to the fact that all media sales are automated, which in the end increases performance, efficiency and transparency for both agency and advertiser. These are the benefits of automated trading in a nutshell.

It seems to me that the publishers are locked in the past. They are still holding on to the term “premium” as being the differentiator even though we all know that premium is equal to manual.

Publishers, the mad men days are over

I attended many seminars, fairs, meetings and discussions regarding automated trading across Europe during the last year and continuously heard three arguments from publishers as excuses to why they haven´t really started to embrace automated trading:

  1. It´s important to have meetings and close relationships with our key clients. If everything is automated, does it not make sense to build relationships.
  2. CPMs are too low for RTB and automated trading.
  3. Increased efficiency is not really important for us.

Here are my answers to those three arguments:

When old routines are being automated, it is more important than ever to maintain and develop customer relations. Instead of spending time negotiating a million impressions for a 300×250 placement, you can now discuss much bigger opportunities like exciting rich media, video, cross-platform solutions for mobile, sponsorships, data partnerships with other media houses etc.

The only way to develop and create new opportunities is by having extremely close relationships with your clients and partners and that is done through dialogue between people.

CPM for RTB is low if you compare it to CPM for premium, but that is not really a valid comparison or argument for holding back. The seller or publisher can set a minimum sales price per impression. You are never forced to sell at any given price.

Another important factor why prices are low is actually the publishers’ own fault. Publishers have for too many years been selling their remnant inventory for a bargain to networks. The networks have then been good at reselling it at higher prices with added value through automation and technology, including retargeting. 

If you as a publisher want a higher price per CPM through automated trading then stop selling your inventory cheap to networks. Open up the gate for the public so they can buy your inventory through automation. You can protect the price, you will gain more insights in regards to what is working and a new customer group will all of a sudden appear which is the long tail. New customer group will increase the demand and the price will follow.

Efficiency is important for every single company no matter which industry they’re from. Enabling automated trading removes a huge amount of a publisher’s ad operating costs and increased efficiency not only saves money but also creates new opportunities. 

Automated trading is a major opportunity

In the words of the late Steve Jobs, “Innovation is the ability to see change as an opportunity – not a threat”.

In the same vein, it’s time for publishers to take a leaf out of his book – opposed to continuing to debate the whys and wherefores and adopt a new perspective to how online inventory can be bought and sold in the automated age.