At Video Forum, Major Publishers Embrace Programmatic, As Buyers Demand Outcomes

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Mukund Ramachandran, DataXuFor major publishers that built their businesses on print and glossy magazine pages, there is a clear sense that programmatic ad sales methods are becoming mainstream. What's less clear is how to address the problems that programmatic has forced on them, namely, the struggle over developing a common metric and how to define terms like "premium" and "transparency." Also, how do the values of inventory change when costs are shaved thanks to greater automation?

Those problems weren't solved at the video ad services provider LiveRail's Video Publisher Forum, but they did get a full hearing.

"Is premium about context and environment, or is it about the ability to expect certain outcomes?" asked Mukund Ramachandran, GM for advertising solutions at demand side platform DataXu. "For the most part, once you're satisfied you're not buying crap, you are interested in outcomes. That's where programmatic comes in. We're still in a transitional phase. We've inherited a lot of thinking from the previous age. TV had a lot of waste. We've all been focused a lot on delivery metrics, completion rates – not outcomes."

In the first panel of the day, Adweek's Mike Shields attempted to hold a panel of ad tech vendors' and media buyers' feet to the fire on whether programmatic was really best for "remnant" or inventory that wasn't – or couldn't – be sold directly. In other words, why would a publisher want to automate the sale of anything that's truly "premium," however it's defined? If the inventory were really in demand, why wouldn't a buyer accept a transaction done over a fax machine or through a few phone calls?

The general consensus is that even valuable ad placements are not worth putting up with time-wasting manual processes.

"About 30% of people's time is involved in pulling reports, and that's an inordinate amount of inefficiency," said Ari Bluman, GroupM's chief digital investment officer.

Still, for the most part, panelists agreed that programmatic – like online advertising in general – was premised largely on direct response plays, not the kind of lucrative branding plays that generally make up guaranteed or reserved ad sales (aka "premium").

During another panel, Mark Balabanian, senior director of business development at DSP Turn, said "reducing friction" associated with ad sales would save marketers money and inspire them to spend more brand dollars. That's a key reason publishers should pursue more "programmatic direct" deals through tools like private exchanges, which give sellers clearer controls over who sees their inventory and on setting price ranges.

"Programmatic direct is an innovative maneuver in addressing the challenge of reducing the complexity and friction," Balabanian said. "There's still a lot of manual implementation that goes on in programmatic direct. Sadly, about 70% of these deals have an error caused by an operator. When we go into a new area with partners, we think about how to alleviate friction.

The path to reducing friction is usually found in the use of data, he said.
Specifically, it comes in the interplay of third party data and first party data from a publisher or an advertiser.

"Everything we do is rooted in data intelligence, because no one is interested in guessing anymore," said Joe Weaver, managing director of Mindshare's trading desk. "There are tech solutions that will drive business goals, as opposed to just campaign goals. That's an important distinction"

A third panel included ad operations executives from Viacom, CBS Interactive, Condé Nast and the New York Times. The publishers said they've gotten used to the balancing act of direct sales and programmatic, and the need to sell more valuable inventory through programmatic methods, while easing fears over channel conflict and cannibalizing direct sales.

Part of that involved "banishing" the term "remnant ad sales," said Matt Prohaska, the NYT's programmatic ad sales director, and Alanna Gombert,  senior director of Programmatic and Trading for Condé Nast.

Video is a fairly new product for programmatic sales, the panelists said, but is also ripe for automation. Video holds considerable value, particularly with ads that are user-initiated, as opposed to auto-play, because of the clear viewability metric that method implies. Secondly, the lowering of siloes at the agency level in recent years has also made video more attractive to brand buyers.

"We learned a lot of lessons from display," Gombert said. "Video is a very different animal." She added that the company's digital ad strategy achieves particular focus thanks to the " multiple touch points in the sales process, because we have corporate, brand, and video sales teams plus the programmatic team."

Prohaska echoed Gombert's sentiments on the selling of video. He recalled attending an Interactive Advertising Bureau event, where then veteran broadcast media buyer Donna Speciale (who has since jumped to the sell-side as president of Turner Entertainment's ad sales) announced that she's not a TV buyer or a digital buyer, "she's a video buyer." Slowly, others still on the agency side have come around to her way of thinking.

"You'd never get fired for recommending linear TV," Prohaska said. "We could turn that around to say, 'You only get promoted if you recommend programmatic.' And if you do get fired for recommending programmatic, we'd love to talk with you."

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