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The Top 5 Programmatic Yield Management Challenges

Posted by Jamie Sacks on Nov 20, 2015 1:22:42 PM

(This is Chapter 9 of the Adomik Programmatic Yield Management Handbook)

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Programmatic yield management challenges are many, but focusing on these 5 will get you on a solid foundation

It should go without saying that RTB and Programmatic have transformed the way media is bought and sold. However, one topic that seems to be missing in many discussions are the challenges that sellers face managing their programmatic strategy. Given how new programmatic yield management is as a practice, there is a very small body of work on the subject (we aim to solve this with the Programmatic Yield Management Handbook). That said, it is amazing to see how far sellers have come with no "owners manual" when it comes to monetizing more and more impressions -- both through RTB and private marketplaces.

With anything this new, there are a plethora of big challenges that publishers face managing their yield in a market increasingly influenced by growing RTB budgets. Since the transition from traditional IO based campaigns to more advanced RTB budgets, publishers have had to change the way they approach selling media and analyzing their overall efficacy. Here then are today's  "Top 5 programmatic yield management challenges" with some thoughts on the right questions to ask as each issue is considered.

1)   Determining the right tech stack
2)   RTB Transition: Managing RTB and Direct
3)   Organization: who do you need to make it work
4)   Extracting Value from your data
5)   RTB pricing

Determining the right tech stack:

As a publisher, one of the first challenges you face is deciding which tech stack is right for you. Your tech stack will be the foundation of your digital business and determine the capabilities you will be able to support immediately and in the future. Depending on your inventory, there are many technical decisions to make including: what publisher ad server should I use?, what ad exchanges should I partner with?, do I need a DMP?, among others. As new technologies are introduced seemingly every week, it is becoming harder and harder to make decisions. Another decision that quite a few publishers are faced with is whether or not to use header bidding. Regardless of the decision to use header bidding or not, publisher exchange integrations are the foundation of all of programmatic yield management, and in order to create an optimal demand ecosystem, sellers must test and re-test available exchanges to understand their relative performance.

RTB Transition and Yield Management:

Once the question of which exchanges to use is settled, sellers then face an ever-present battle with understanding how best to monetize their inventory. Yield managers have to understand the delicate balance between preserving the classic direct sold campaigns with the need to foster and grow RTB demand. This requires yield managers to understand the driving relationship and revenue forces behind direct campaigns and create a strategy that preserves direct campaigns while ensuring the correct mix between direct and RTB impressions to yield the best possible results.

Understanding demand is a significant challenge that yield managers have faced since the inception of RTB. In order to understand demand, sellers have needed advanced reporting tools, tools that allow their teams to look at buyer behavior, from overall spend by buyer on a certain set of inventory to participation rates. Until recently, these sophisticated tools were unavailable to sellers, putting sellers at a decided disadvantage. As competition across the RTB ecosystem increases, yield managers must be aware of their demand opportunities, having a full grasp of all the players interested in your inventory as well as their performance in your auctions will afford a deeper understanding of how to increase RTB revenue. Participation is a great sign of interest, and yield managers need to have the necessary tools to understand who is participating, winning and losing in their auctions and what inventory each one of these buyers is bidding on. Discovering these elements will help internal sales teams sell, and aid yield managers in identifying easy opportunities to increase yield.

What should your organization look like?:

Another fundamental question publishers have to ask themselves is what should their organization look like. Hiring the right people is not only important but very challenging depending on what your goals are. If you want to build a programmatic team, your organization must include a different composition of skills. One necessary thing to consider is your future goals and how to surround yourself with a team that will allow your vision to flourish keeping in mind that it takes different ad opps, sales and yield management teams to scale a programmatic versus a direct sold business. A programmatic team, with data scientists and analysts will allow you to better scale your pricing and understand more about your data, but these hires come with a high upfront cost and cultural shift towards data-driven selling.

Extracting value from your data:

Extracting value from your data can be a difficult especially when you don’t know where to start. Often, a good analytics tool can be the first step to extracting value from your data. Once you understand who is buying what, for what price across your inventory - you will be able to determine what your inventory is truly worth and what data your buyers are interested. In addition to a good analytics platform, a DMP can help publishers segment their audiences and extend these audiences to their direct and private marketplace sales process. However, value is a relative term and in order to put yourself in a position to succeed and derive as much value as you can from your data - you need to surround yourself with people who understand your challenges and products that help your parse through the millions if not billions of daily impressions.

RTB Pricing: One of the most difficult challenges facing programmatic yield managers, is developing a floor pricing strategy. In order to maximize fill and revenue, a robust floor pricing strategy can be a really great tool to achieve goals. However, creating this strategy at scale is difficult because of the time required to understand which floor rules make sense, implementing these floor rules given your business constraints and the creation of hundreds, if not thousands of rules directly in the SSP. It is also difficult to manage CPM goals, and balancing the constraints of Direct, RTB and other internal goals makes RTB pricing exceedingly difficult for publishers and yield managers. What makes RTB pricing so difficult is the fact that it is an evolving process, you are never really done evaluating your inventory, pulling levers and pushing buttons. Since no buyer values impressions in the same way it is important to create a flooring strategy that captures different buying behaviors based on bidding patterns.

Despite all of the challenges that come with yield management in a programmatic world, there is also quite a bit of fun. It may seem scary at times to wade through the endless amounts of data, simulations and strategic decisions but one of the most powerful aspects of being a programmatic yield manager is being able to monitor, measure and explain all of your data driven success.

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Topics: programmatic yield management, programmatic yield management handbook, PYMH

Adomik offers a programmatic analytics and programmatic yield management software platform for digital sellers. If you are a programmatic seller looking to:

  • know exactly whats going on on your inventory
  • potentially increase your revenue by 30%+
  • optimize your private marketplace deals

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