Programmatic publisher confidence in programmatic channels will drive market balance and growth
Its no secret that programmatic trading of digital media has grown dramatically over the last few years. Last year, programmatic’s share of display media volume rose to 42%, up from 24% in 2011. As is well known, most of the growth to date has come from the volume of ‘remnant’ inventory (inventory that didn’t sell via traditional insertion order direct sales) being placed into real-time bidded (RTB) exchanges and bought for performance deals. Recently, brands have been expanding their programmatic buying. Yet as the efficiencies of RTB have become more pronounced for buyers, a deeper hunger has emerged for more inventory to be placed into programmatic.
While the move to programmatic is a logical evolution for the media ecosystem, the transition has presented challenges to publishers and advertisers alike. Publishers fear things like reduced margins and lack of inventory control. And until recently, publishers have lacked affordable and sophisticated analysis and optimization software to stay on par with the buy side and help them manage these threats and stay in front of the market. Advertisers worry about brand risk associated with exposure to poor sites, wasting investment on poor quality traffic, and overpaying for audiences.
Magna Global predicts that global programmatic spending will grow further to reach $53 billion by 2018. Most of the estimated growth will be from brand advertisers that require high quality inventory, at scale, from publishers they trust. If publishers aren’t prepared for this new reality and can’t confidently commit their quality inventory to programmatic, brand dollars will stay on the sidelines — and market growth will slow.
Brand advertising presents additional challenges for publishers seeking optimum yield from their traffic. To prosper in the new programmatic landscape, publishers need to master their trading data, know how to evaluate the value of each impression, and understand private marketplace deal mechanisms to create beneficial long-term dialogue with buyers.
Publishers that have these capabilities and understanding will confidently allocate higher volumes of quality inventory into all programmatic channels. With the commitment of more quality inventory, publishers will generate more confident brand spending. As more quality impressions are bought at higher prices when they drive higher brand performance, publishers increase revenue and profitability while brand ROI increases…and market growth continues.
Obviously at Adomik, we have a horse in this race and are biased toward our solutions to help the market grow. We provide the tools to empower publishers to take back control, and master programmatic selling of all inventory — including the premium inventory traditionally kept out of RTB. Publisher control and mastery is critical as the market continues to shift.
As programmatic media continues to mature, growth for the next five years will be driven by more brand dollars moving into the space…if brands can become more confident in the quality of the inventory sold there. As brand buyers become more confident and transition their dollars into programmatic, more robust buying will occur across all digital channels: digital TV, display, video, mobile, private marketplaces, and guaranteed programmatic.
When buyers can access quality inventory across all these channels programmatically, publishers will reap the benefits of programmatic’s promised efficiencies as they become more profitable from digital and can focus on the business of creating great content.
Note: A draft of a similar post first appeared on vivaki’s meet the inventor blog series.