(Part 4 of a 5 part series on Holistic Yield Management) Introduction to Holistic Yield Management
Demand management has become more complex with programmatic… and is still a very powerful activity to generate revenue. We have so many examples of companies doing a fantastic job of managing their impressions and stack but still under delivering vs. others that “play it right” with buyers.
Success now lies at the convergence of leveraging all holistic optimization levers AND managing demand relationships. The goal is to provide the best level of service to buyers to stand out from the competition. A quality level of service for demand management should include providing partners with:
- Pricing information: for example, sharing bid recommendations for Open Auctions
- Inventory recommendations: for example, offering the right inventory/price PMPs based on the past activity and current goal of the campaign in terms of target and volume
- Data recommendations: for example, promoting your 1st party user’s data to improve campaign KPI
- Education: for example, explaining the benefits of header bidding and how to leverage it for a key buyer.
The above collaboration requires programmatic expertise on staff. However, creating a specialist team that will be the only one to understand the programmatic channel might not be the optimal setup. Unifying sales teams, with all people being able to address programmatic and direct use cases will lead to better buyer management over time. While this requires investment in the right people and educating them, it will pay off in the future.
If you stay with two teams: direct and programmatic, you might create conflicts. Each team will compete with the other and try to sell as much as they can on their own channel… even if the other channel would generate better revenue for the same impressions.
For the same reason, you should not incentivize sales teams on one channel vs. the other. This would probably increase the revenue of the “incentivized” channel, but at the cost of the overall revenue. Managing opportunity costs with isolated sales team is a real headache.
Instead, the goal is to make sales think about the overall revenue and about how to best combine channels to generate maximum revenue. Align human incentives to maximize revenue.
As an example, monitoring brand activity on the Open Auction channel should allow to detect leads for PMP or Direct channels. Sales monitoring should also be focused on the buyers that are bringing specific demand (exclusive campaigns) or significant incremental revenue (what happens if they leave?) regardless of the channel. Making sure that they deliver the best level of service across programmatic and direct is key to secure and renew future revenue.
Another idea is to offer full packages to big brands or agencies, for example to combine cheap access to programmatic inventory (via a Deal or an Open Auction bias) as part of a long term Direct contract with a significant commitment on budget. (Note: Do not forget to monitor the opportunity cost as explained in the section above!) The more your sales people are able to pitch, sell and service from one channel to the other and to package them up to meet buyer needs, the better for demand and your overall revenue.
Next post: Part 5: Holistic Yield Management in Practice: Unification of Data Operations