What Publishers Need To Know Now About Programmatic Sales Planning

ed-carey-ddt“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 Ed Carey, VP of sales at The Rubicon Project.

As advertising technology moves from agencies’ back offices to the front — and from auctions to deals — digital publishers are following the money. Programmatic features now permit total control of the sales process, from prospecting to closing, and — as a result — content producers are putting their trust in these features for the first time.

Dow Jones, Viacom, Time Inc., and Hearst Newspapers are just a few of the publishers automating their direct-sales deals via programmatic technology, often at CPMs that exceed $10. To the converted, “programmatic” is just a metonym for selling smarter, quicker and richer.

As a result, more executive publisher sellers are hiring a Supply-Side Platform or an exchange in advance of sales planning for the second half of this year and 2014. Their goals are to sell programmatic to buyers who use Real-Time Bidding in open auctions and to cut direct deals to help lay the foundation for a multichannel sales team next year.

It’s a good idea to get started early. After all, as with anything new, you’re bound to make mistakes. With programmatic, it’ll be important to make those mistakes — and learn from them — before 2014, when the competition is expected to intensify. For executive publisher sellers jumping into the programmatic fray, here are some major trends affecting media sales, the buyer landscape and strategic sales opportunities leading up to 2014 — and important related dos and don’ts.

1) “Up The Stack”

Agency holding companies are planning to use programmatic tools to take back buying control from third parties and automate buying “up the marketing stack,” including deals, response, video, mobile, branding … everything. In response, publishers are selling “up the inventory stack,” such as homepages, rising stars, exclusives and tablet advertising via platforms. Buyers and sellers operate more profitably because workers spend time on ideas instead of on processes and relationships.

“We believe silos work well in farming, but not so well in selling complete marketing solutions,” says Matt Prohaska, director of programmatic advertising for The New York Times. “The same way buyers and sellers moved away from ‘that one person in the cube down the hall’ who knew digital in the mid ’90s, smart publishers are starting to integrate programmatic, along with its relevant data and best-of-breed platforms, into the everyday practices of their organization.”

Best Practice: Hire a few senior programmatic specialists as sales managers, client partner managers, sales engineers and sales-enablement guides for your direct-sales team. Teach your entire sales department about programmatic, as a direct-deal method, before mid-2014.

Poor practice: Separate programmatic and direct-sales forces into separate teams, management and bonus structures. This will disincentivize sales people from offering programmatic products if they don’t have skin in the game. Also, agency trading desks are shrewd enough to ask if sales reps are commissioned on programmatic business. You want to be able to respond that they are.

2) “Everyone Is A Trading Desk”

Holding companies are ready to embed programmatic-trading-desk buying across their media practice, meaning that, very soon, programmatic will just simply replace RFPs, inventory discovery, media kits, email negotiations and the IO — in other words, all workflow processes. The same is true for marketers who are designing real-time marketing teams atop enterprise software. As Magna President Kristi Argyilan told AdExchanger: “The [Cadreon] vision is that we will eventually have something that can be released to all brands to work from on their own, with a central resource responsible for continuing to iterate it.”

Best Practice: Agency sales people need to learn about programmatic from their managers, instead of from their customers or recruiters. Holding companies are moving quickly to change their operating models, and everyone is learning as they go. Lean on your technology partners, vendors and suppliers to teach you what your sales people need to know to sell in this new environment.

Poor practice: Designate operations people to sell the programmatic inventory to agencies. This is tempting in the short term because publisher operations leaders are the only RTB subject experts, but it’s risky because operations people don’t understand the low-hanging opportunities, needs, politics and language of agency buyers. Novice programmatic buyers need plain-language benefits, not technobabble.

3) A Growing Market

The RTB market is worth $3 billion this year, with agency trading desks responsible for about half of that spending, but the incremental market for digital advertising budgets aiming to automate “up the marketing stack” via direct-deal automation comes to a whopping $10 billion. That brings the total potential display market to $13 billion. These five types of buyers are looking to work with publishers on programmatic direct deals “up the inventory stack”: the six holding companies’ agency trading desks (Xaxis, Amnet, Accuen, Havas, VivaKi AOD and Cadreon); agency media-buying teams using DSPs other than that of the agency trading desks; DSPs who operate as managed-service buyers for advertisers; marketers using DSP technology to buy directly (not using agencies); and major ad networks that license or operate a DSP to buy private inventory for retargeting or brand buying.

Combined, hundreds of potential customers — including approximately 500 people working in media, business development, media planning, brand relations, product management and campaign management at North American agency trading desks; people who work at the roughly 100 DSPs; and hundreds of nonagency programmatic buyers (marketers and folks at ad networks) — use DSPs to buy inventory today. As a publisher, you’ll need to decide how your sales people and platform-technology partner (i.e. SSP or exchange) combine efforts to attract attention to your content, placements and audiences. But the bottom line is that ad agencies are not the only buyers out there.

Best Practices: Use technology as enablement tools for your sales team. Consider technology operators as your channel partners, and use them to coach your direct-sales team on packaging, promoting, negotiating, buying and selling. Over time, this work should be brought 100% in-house, but today you should choose your supply platform based on its level of service commitment to your sales planning.

Poor practices: A) Sell passively and expect technology — or your tech partners — to “sell” inventory for you. Tech people don’t sell media; they sell the platform on which media gets bought and sold. B) Call up agency trading desks without a sales proposition or purpose. C) Send noncredible sales teams on discovery calls to “gather information” that waste customers’ time.

4) Agency Trading Desks Seek Quality

Here’s a secret: Agency trading desks want quality content very badly and will pay for it. They want to buy all media (see Trend No. 1), not just cheap media. One of the challenges has been that publishers sell content, while marketers buy audiences. Buyer technology (DSP) and seller technology (SSP) are transforming themselves to support both easily with “programmatic-guaranteed,” or deal-automation, products. If you are a progressive publisher, you already know that you can sell your data directly to buyers.

As Chris Paul, general manager for VivaKi’s Audience On Demand, says: “We are meeting with premium publishers [and] telling them that audience targeting, coupled with quality inventory, is critical to meet performance, delivery and brand goals. AOD is interested in rewarding our best publisher partners who work with us programmatically, because they are helping our clients across Publicis Groupe to automate and our advertisers to get better value.”

A publisher’s goal is to help marketers and agencies grow their business. You can do this by offering them quality brands they cannot get today via auction RTB and offering trading desks your complete inventory “up the stack.” Negotiate quickly and easily or not at all (by using floors instead). If you do all this, you’ll be growing the pie for everyone, not just cutting a bigger piece for yourself.

Another challenge is that agency trading desks aren’t equipped to manage hundreds of sales relationships. Products and technology can help. Therefore, premium publishers can gain an advantage by enabling agencies to adopt new deal-automation processes. Those that do will be rewarded with programmatic-direct deals because they’re easy to work with and can offer quality inventory that isn’t available in the open auctions.

Best Practices: A) Sell what sells already. Make your best-selling products available for programmatic purchase at existing rates, and sell rate cards and high-value placements and sections. Don’t feel pressured to discount. B) Structure “always on” programmatic upfront deals and protect buyers from price fluctuations while tapping larger budgets. C) Offer exclusive inventory, terms, pricing or placements for select buyers. D) Use open-auction lead generation. The best supply platforms offer tremendous insight into which brands value which inventory. This insight can translate into better-paying direct deals, and can also increase sales by sending live advertiser leads directly to your Salesforce CRM, making it easier for sales people to follow up.

Poor practices: A) Block your best advertisers from using RTB. B) Ask buyers for guarantees in exchange for discounts or unique inventory. This doesn’t work well with the way budgets are decided, and it doesn’t gain you any goodwill.

Follow Ed Carey (@EdCarey) and AdExchanger (@adexchanger) on Twitter.

Enjoying this content?

Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

Join Today!