In a discussion with Steve Sullivan, the Interactive Advertising Bureau's VP of Ad Technology, Scott Spencer, director of Product Management at Google, offered outlines for the company's approach, including assurances that publishers didn't have to worry about cannibalizing their direct sales by turning to programmatic.
"We don't look at programmatic as isolated from direct sales, we see the obvious need for an holistic approach," Spencer said. "Programmatic can actually strengthen the direct sales channel. Publishers need the ability to block certain advertisers, certain domains. They need to be able to see how one channel is working against another. Historically, a publisher may have had the management of the SSP independent from the sales team. We're starting to see blurring, as ad ops bring in more revenue than ever before [and are] being put into collaboration with sales. It's no longer a case of channel conflict; it's now merely a question of optimization, with publishers looking to direct and indirect sales tools to make more money."
Sullivan and Spencer also discussed the meaning of "programmatic" and where the boundaries are in terms of what tools and methods are employed. "We define programmatic buying a little more narrowly than some," Spencer said. In Google's lexicon, programmatic begins when you have a situation that allows the media buyer to define what pieces of inventory they're going to purchase and use for targeting.
"In a traditional buy, for example, a publisher gets to set the inventory the buyer can get. [That] may include a package of geo-targeting as well as specific site placement," Spencer said. "In programmatic, the buyer gets to determine what inventory they get, while the publisher only decides a general allocation of available placements. The buyer can choose whether they want the geo-targeting or not, as opposed to having to take an entire package. Sometimes it's done through real-time bidding, sometimes it's done through a UI-based buy."
Spencer draws the line for programmatic when publishers make their inventory available through a set of APIs. They don't regard that as programmatic, because the advertiser doesn't get to set the target.
The conversation then turned to why a publisher would want to endorse programmatic in the first place. Doesn't it just commoditize their inventory and take the human element out of the sales process? Isn't the chief reason marketers and media buyers like programmatic methods of accessing inventory due to the fact that it reduces cost and allows for the kinds of audience cherry-picking that threatens the whole idea of a publisher's brand equity? Aren't we ultimately talking about a loss of control, since Google defines programmatic as essentially putting the buyer in the driver's seat with regard to pricing and placement?
Again, Spencer returned to the theme of programmatic as a tool to augment direct sales, not replace it.
For example, most publishers have some inventory that has not been sold and can't adequately be sold by hand. It's one thing to offer inventory indirectly to secondary buyers. The challenge becomes if a publisher wants to offer it to more than two buyers, say 10 buyers or even a hundred or more.
"If that's the case, you're going to have a tough time figuring out what buyers to send the offer to," Spencer said. "The idea of these systems of exchanges and supply side platforms sprang up and helped create competition for the inventory. The second part is, if I'm giving the buyer the ability to choose the kind of targeting and they have control over the buying only some of the inventory instead of a whole package, when you have multiple buyers, inventory gets bought at different price points. And that ultimately benefits both the publisher and the buyer."
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