(This is Chapter 7 of the Adomik Programmatic Yield Management Handbook)
To prosper as you manage yield in a programmatic world, embrace the concept of holistic yield management
Programmatic channel definition & allocation
Understand demand and pricing your inventory accordingly is good, but programmatic keeps evolving and becoming more complex. There used to be only one product: the Open RTB auction. Sellers are now also playing with different channels like “Private deals”, and will soon add new products, such as “guaranteed premium”. And programmatic still lives side by side with traditional premium sales with insertion orders. Programmatic is far from being a one channel game!
Each of these programmatic channels comes with its own pricing models that need to be considered. Open RTB has minimum floors, Deals might have floors or fixed prices, and both can be as a dimension in pricing the other!
As explained earlier, “the programmatic mix” demands that pricing has to be performed for each programmatic channel. Pricing will likely not work exactly the same way for each channel: you do not define a minimum floor rule like you define a fixed price for PMP/Deal ID, but the overall technique remains the same:
- analyze the buying patterns with the relevant metrics per channel
- recognize the value of your inventory per channel
The best programmatic yield managers use holistic or cross-channel yield management
Programmatic yield managers need to pay special attention to how pricing is relevant across different channels. Typically, it is important to understand the specific value of these products vs. each other. This translates into 2 questions you need to answer:
- What are the differences in buying patterns for each channel?
- Example: a buyer might be ready to pay a premium on Deals but will strongly decrease its participation to Deal auctions compared to RTB
- What are the components that are creating specific additional value?
- Example: adding user data to a Deal will increase its value compared to standard RTB. You will need to: assess the value of the concerned auctions in RTB, then understand the “Deal attractiveness” of your user data based on past behavior of buyers on Deals that used similar data, and finally, properly understand the added value of the data.
With answers to these two questions, you will be able to define “price bands” for each channel that reflect their value differences. As in determining pricing, the number of data points to take into account and the complexity of the calculation at the auction level are very high — accordingly using yield technology is a requirement to manage yield across your entire programmatic inventory portfolio.
Beyond its role and necessity to generate pricing, your Seller Trading Data also helps you to improve and better define and sell your inventory. “Buying pattern” insights should indeed allow you to better understand what is attractive to buyers and then leverage that knowledge through better product management. As an example, understanding the targeting behavior of a buyer on OpenRTB and matching this with your 1st party data will allow you to define a custom package for a Deal, which will eventually lead to better prices and/or revenue than if you try to sell a “regular” deal.
Last but not least, do not forget to monitor the behavior of buyers that are active across multiple channels. There is no issue if they move budgets between different channels as long as it does not translate into a general decrease of the buyer activity or price they are willing to pay. If such does occur, this probably means that your strategy is not properly adapted to the buyer or the overall pricing structure does not make sense. In this case reviewing your pricing and taking such an experience into consideration for future pricing exercises is key.
Remember, Adomik’s platform was built for programmatic sellers by programmatic sellers. We offer a software platform to improve programmatic analytics and programmatic yield management for digital sellers.
- Build a consistent pricing structure across your product portfolio that reflect their value for a holistic yield management approach.
- Gain insights on the different product usage from buyer to improve them and sell them better.
- Monitor the aggregate and “breakdowned activity of buyer across your product to be able to adjust your pricing structure if needed.