Originally published on Forbes.com – click here to view the original article
By Darren Riley, SVP International Media with Active International, and an expert in global media negotiation.
Across 35-plus years in the media business, I’ve observed changing consumer behavior and the media strategies that follow it. Today’s consumer path to purchase is non-linear and more digitally influenced than ever before. Because of this, many companies have redirected their advertising dollars to programmatic media.
Programmatic is an automated method of buying media used in digital but also includes connected TV, digital audio and out-of-home advertising. The investment in programmatic media is growing. Even during the pandemic, when media spend declined initially, programmatic spending grew and is further expected to climb another 17% in 2021 according to Statista (paywall). This isn’t surprising given the rapid acceleration of e-commerce.
Soon all major media formats will be bought programmatically. eMarketer predicts (paywall) that linear programmatic TV ad spend is expected to climb to just shy of $8 billion in the U.S. alone by 2023. In other words, if your business buys ad space, some or most of it may be done programmatically.
Programmatic media can mean more to your business than a lower price.
Programmatic technology allows for more precise targeting, dynamic creative optimization and the ability to optimize to better-performing ads and audiences in real-time. This means more of your money can be immediately shifted toward ads that drive results and less wasted ad dollars go to people who are unlikely to buy.
Further, the speed and ease that you can implement a campaign, test and learn through real-time data are unmatched. Brands can quickly optimize based on the performance of their placements and creative compared to traditional media buying.
Not all programmatic media is the same.
There are several ways to buy programmatically, and the choices you make have an impact. By understanding these differences, you can achieve a greater ROI.
Here are the options for buying programmatically and some of the main considerations for executives:
- Open Marketplaces (OMP)
Open marketplaces are for audience-based buying with reach in mind. If you need to get your ad in front of the largest possible audience at the most efficient price, consider an open marketplace — with some important caveats. This type of marketplace holds ad space from a vast number of publishers. You’ll get access to a wider array of ad inventory, but with little visibility into specifically where your ads are shown. Based on your targeting preferences, your ad could appear on a website you wouldn’t want your brand to be associated with.
C-suite takeaway: Putting all your ad dollars into open marketplaces can be the most cost-effective and efficient option, but it carries a greater transparency and reputation risk. Not all your ad views or engagements may be from humans, and your brand may show up in undesirable places. These perils can all be mitigated to a degree with the use of third-party tech partners — but at a cost.
- Private Marketplaces (PMP)
More brands are shifting to private marketplaces, and I’ve certainly seen this trend with our clients. Consider a private marketplace if you’re willing to pay a little more in return for more control and peace of mind over where your ad may appear. Private marketplaces are typically made up of select high-value publishers, and advertisers must be invited in. Often, media owners will put “premium” inventory on a private market before the open market.
C-suite takeaway: While this is still a cost-effective choice, you’ll pay a little more to ensure more of your ads are seen by humans in a more controlled space. Further, it may take more time to get the same reach compared to open marketplaces.
- Direct Deals: Programmatic Guaranteed And Programmatic Preferred
Consider direct deals if you want to secure premium inventory at a fixed price. Often, a publisher’s top-tier inventory will be bought through direct deals before they’re offered in the open market. It gives advertisers all of the benefits of traditional media negotiation and placements, with the added benefits of automated buying technology.
There are two types of direct deals to consider: programmatic guaranteed and programmatic preferred. In a programmatic guaranteed deal, both sides make a guarantee: The advertiser guarantees an ad spend amount and the publisher guarantees the number of impressions. A programmatic preferred solution doesn’t guarantee the impressions.
C-suite takeaway: Both direct deal types can help you lock in the most sought-after media before your competitors do. These deals can cost you more, but purchasing programmatically is about 30% more efficient compared to traditional media negotiation. A preferred deal will cost less than a guaranteed deal but isn’t an ideal solution if you have a specific number of impressions you want to achieve.
There are ways to manage the cost of premium media.
Quality comes at a cost; this is as true in programmatic media as anywhere. However, in a cashflow-sensitive economy, there are ways to manage it.
Using a combination of private and open marketplaces is a smart way to achieve your impression goals and get quality media on your plan at a reasonable cost. If you want a high-quality sport or special event presence, use programmatic direct, but marry it with more affordable programmatic options.
To offset premium pricing, some companies are using innovative approaches like trading in unsold products as partial payment (called corporate trade).
Forewarned is forearmed.
Programmatic media likely makes up a significant portion of your digital ad spend. Worldwide in 2021, programmatic advertising is estimated to be worth $155 billion, and it’s expected to account for approximately 72% of all display ad spending. It’s quickly growing beyond digital media for good reason — less wastage, increased efficiency, better use of human capital and real-time optimization and consumer insights. The takeaway is to remember that not all programmatic media is equal; dig deeper, ask questions and embed programmatic into your vernacular. Ensure that your investments have as much impact as possible with the least amount of risk.
Contact us to learn how Corporate Trade can help you offset the cost of premium media.
