Does The Online Ad Industry Need A 'Programmatic Upfront?'

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prog-upfrontBarely two months after promoting its video content among the various other digital NewFront presentations, AOL is now planning a "Programmatic Upfront" for September. As we reported earlier today, CEO Tim Armstrong wants to position AOL as the antidote to the long chain of ad technology vendors that serve as the pipes connecting marketers' online ad dollars and publishers.

Just after Armstrong and company discussed their proposal at a press event Tuesday night, we posed this question to several industry veterans:

"Do digital buyers and sellers need a Programmatic Upfront?"

Click below or scroll for their answers.

Bill Wise, CEO, Mediaocean

"It's a smart move by AOL for a different reason than you may think:  All the real-time bidding intermediary players are now talking about moving upmarket to premium programmatic. However, the premium programmatic market requires a whole new composition of demand than exists in the RTB space. So AOL's move is good in that they recognize this is a demand issue; not a supply or technology hurdle."

Frank Addante, CEO, The Rubicon Project

"Direct order automation (in contrast to the auction market) already allows for the delivery of private, negotiated (“upfront”) orders programmatically. Publishers already use Rubicon Project’s Connect platform to deliver these direct sold orders to the advertiser programmatically, and more and more buyers and sellers are requiring programmatic delivery to any digital component of an upfront or guaranteed order. A programmatic upfront is a natural promotional device to accelerate the programmatic requirement for direct orders. AOL is taking a page out of the Digitas playbook (Digitas started the NewFronts before the IAB made it an industry wide event). They should be credited for this, however this effort should, sooner rather than later, be under the auspices of the IAB as direct order automation benefits all buyers and sellers industry wide."

Brett Wilson, CEO, TubeMogul

"Given that premium digital video advertising is scarce, upfronts make sense because they offer advertisers and publishers alike predictability around pricing and scale. Programmatic buying simply automates the process, and is relevant for both upfronts and non-guaranteed buys."

Tod Sacerdoti, CEO, BrightRoll

"Selling programmatic packages upfront makes a ton of sense in the digital video advertising business, as inventory is naturally supply constrained and certain audiences (such as in-market, retail, key geographies and retargeting) will generate premium rates throughout Q4. In fact, these types of deals are actually quite common in the marketplace today and it is great to see a big brand like AOL using their marketing muscle to promote the benefits of programmatic, rather than creating hype about custom content."

Jeff Green, CEO, The Trade Desk

"I think it will be impossible to get any meaningful Q4 budgets doing something new in September.  However, I don't think they are likely doing anything new.  I think instead of using fax machines to exchange IOs, they are likely using APIs to agree to the up fronts.

While this is progress, and it is good for buying platforms like ours, they're not likely addressing the inherent problems with upfronts -- which is that most people don't know what they're buying.   The forward market is not sustainable as it is because publishers are doing the packaging -- not just because fax machines should be fossils.

That said, if the mechanics are as predicted, it is a welcomed step in the right direction."

Bryan Wiener, CEO/chairman, 360i

"An upfront annual commitment does diminish some of the appeal of programmatic, where the inherent value proposition is centered around real-time optimization and maximum flexibility. This is a highly dynamic market set by buyers and sellers and a long-term commitment isn’t necessarily aligned with what makes programmatic work so well. AOL's offering will have to be very compelling to make this attractive to marketers."

Jordan Bitterman, chief strategy officer, Mindshare

"Generally: I'm favorable.

Programmatic is a big part of our industry and only getting bigger. It could potentially be a galvanizing force for a publisher the size and scale of AOL to take a stand such as this one.

Upfront deals in the digital space have been a moving target throughout the industry: it works well in some cases, but not in others. There are a good number of dependencies that make that so, from ad format to placement type to technology considerations. Programmatic buying naturally removes some of these hurdles, so it may well be a space where upfront deals can gain traction. Mindshare is actively interested in seeing where this marketplace goes and intends to be a part of these conversations."

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