Let’s Not Expand ‘Programmatic’ To Include Everything

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. 

Today’s column is written by Tom Shields, Co-Founder and Chief Strategy Officer of Yieldex, an analytics tools provider for sell-side, yield optimization.

Over the last three months, the word “programmatic” has been featured in the headlines of dozens of articles, and each one seems to use a different definition. This confusion was a central topic this week at a packed Town Hall held at the IAB’s Annual Leadership Meeting. Is programmatic just for RTB, or does it incorporate direct relationships? Does programmatic include guaranteed impressions, or guaranteed CPMs, or both? What emerged was a consensus that “programmatic” is being used to describe at least two completely different things: RTB, and process automation.

Most people think programmatic equals RTB, and despite heroic efforts by Legolas Media’s Ran Cohen and others to redefine programmatic to include non-RTB delivery, nearly everyone still thinks of programmatic and direct delivery as opposites. Scott Spencer at Google defines programmatic in an RTB context: “In programmatic, the buyer gets to determine what inventory they get,” whether the price is directly negotiated (like a private exchange) or an auction. AppNexus’ Andy Atherton points out on his personal blog that this is a one-way guarantee – the seller guarantees to provide impressions, but the buyer doesn’t guarantee to take them.

The confusing part is when people also use “programmatic” to refer to automation and standardization of the operational processes involved in executing a buy. Standard direct-sold buys, the kind that Meredith Levien refers to as “transactional RFPs“, have cried out for execution protocols for nearly a decade. Of course, process automation can apply to negotiated programmatic buys as well, as the fulfillment process is often arduous. One publisher (who shall remain anonymous) recently lamented the effort it took to execute private exchanges, telling me “programmatic buys are the most manual part of our process.”

If programmatic didn’t already have a strong association with RTB, it would be a good term for this, but given that execution process automation can apply to both RTB and direct buys, overloading “programmatic” just adds confusion and slows adoption. I would submit that “automated” is a better word. Automation implies server-to-server connections and operational efficiency, and can be used to execute buys that are either direct (e.g. Automated Direct) or programmatic (e.g. Automated Private Exchange).

Automated Direct and Automated Private Exchanges are both very exciting areas of innovation today, and I look forward to seeing dozens of other articles explaining them in the future. As ad technologies become more sophisticated, we need well-defined terms to cut through the confusion and grow the market for everyone. Let’s not try to expand “programmatic” to include everything, or the term will become as meaningless as “premium” has become. Instead, let’s keep “direct” and when it is automated, call it Automated Direct.

Follow Tom Shields (@tshields), Yieldex (@yieldex) and AdExchanger.com (@adexchanger.com) on Twitter.

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  1. Roger Williams

    Agree with Eric. The danger is we just keep developing even more labels for the industry to use which just adds more confusion.

  2. We at isocket never liked the term premium, so we’ve been referring to it as programmatic direct for the last few years. It’s programmatically executed, and it’s direct. The word “automated” doesn’t sit well with me because it implies humans are being removed the process entirely, which isn’t true.

  3. John, Roger, Eric: Just curious, do you think there is a difference between programmatic meaning buyer chooses impressions, vs programmatic meaning tags don’t have to be sent by email? Which meaning do you think more people share, intuitively?

    I’m not in love with “automated” either, but I do think it’s better than trying to make programmatic mean everything. Would love to hear your reasoning if you think otherwise.

  4. I totally agree, Tom, and have a similar article coming out on ClickZ next week. Technically, “programmatic” is correct–but unfortunately, it has been over-associated with RTB. I like John’s suggestion–“programmatic direct” or, when strictly talking about the “transactional RFP” business, something like “systematic reserved” or “systematic direct.”

    I also think the word “premium” is a huge problem with defining the term. Who decides what is premium?

    • Chris, I like “systematic direct” as well, it has the same associations as “automated direct” in my mind. Thanks for the suggestion!

  5. Automated, Programmatic, Automatic, Systematic – Not that important. As long as the infrastructure we build will naturally exclude (from the value chain) parties that add no value, our industry will thrive.

  6. My concern guys is that if we start trying to shift the discussion at this point, we slow things down. Programmatic is the term the industry is locking down on at this point. Let’s embrace the term programmatic. If we say Programmatic Direct for non-auction buys, that works fine for me.

    All the companies in this part of the market (and most of them have commented on this article now) need the investment community to recognize the incredible shift that’s happening in the market right now. The venture firms are a bit behind the curve on this change – or they think it’s *only* about efficiency, or only about plumbing. The investments made in the ecosystem technology infrastructure over the last decade (especially the past 5 years) is finally ready to be levered. And we need to focus on crafting a unified clear and simple message that explains this to the folks that invested in the last wave of technology so that they understand the next wave. This is so incredibly critical that I can’t stress it enough.

    We’re just at the moment where investors need to be looking at Ad Tech again, but they don’t yet see why they should be looking. This is the moment. Let’s get the language clear, all agree what to use, and run hard. I suggest programmatic premium for premium bought programmatically, programmatic direct for inventory bought without auctions (e.g. Reserved/Guaranteed and/or any inventory that plugs into the 1st party server directly.)

    • “Let’s get the language clear, all agree what to use, and run hard” – this is exactly what I’m trying to do! You say “programmatic premium for premium bought programmatically, programmatic direct for inventory bought without auctions” – isn’t programmatic direct also premium inventory? Sounds like you are arguing that programmatic = everything except for custom direct executions – fine, but then how to distinguish the two types of programmatic premium (one auctioned, the other direct guaranteed)? This is the problem I’m trying to solve. So again, I suggest we let programmatic premium mean what you seem to imply, premium inventory bought via auction, and use a different word – I suggest automated – to mean workflow automation around the buying process. This actually clarifies what we’re talking about, and will let us all run hard.

  7. Paul S

    Lets please not use the term ‘systematic’ I guarantee it will set us back and create even more confusion. There is nothing wrong with programmatic. It implies software is helping streamline the buying process.

  8. At Shiny Ads, we went through a long process with marketing, sales and the product guys and liked “programmatic guaranteed” the best.

    “Automation” makes sales people run for the hills as the robots descend down to take over their jobs.

    I still like “Premium” though and would love to see “Programatic Premium” as the term.

    But the big problem here is that the traditional RTB players have tried to discredit both of these terms to cause confusion in the marketplace to give themselves time to get into it themselves.

    “Programmatic” doesn’t mean RTB. It means that the process is handled by machines communicating to machines. RTB uses programmatic methods, but it doesn’t equal it. Even “Real-Time” shouldn’t equate to just RTB, since our platform is real-time but there isn’t a “Bid” anywhere.

    “Premium” is still what sales people sell on larger digital publishers and those processes are what need to be improved. Yes, they sell “Guaranteed” and “Reserved” and “Direct”, but really, we are just discombobulating ourselves to get over the stigma attributed to these terms by vendors who don’t play in our space.