The Future Of Programmatic, According To Publishers

catherinemarketersnote“Marketer’s Note” is a regular column informing marketers about the rapidly evolving, digital marketing technology ecosystem. This week it is written by Catherine Oddenino, Analyst, AdExchanger Research.

I’m currently finalizing a report focused on the state of programmatic media from the publisher perspective. As part of the research I’ve been asking publishers what they see as the future of programmatic in the next one to two years. The conversation has been extensive and interesting, so I wanted to share with you some of the trends and predictions.

Many of the publishers I spoke with expect that in the next couple of years:

  • All standard display will be sold using programmatic pipes. Publishers expect that there won’t be a need for direct sales of most desktop display ad units. “Ultimately all banner transactions will become programmatic.” – Executive director of revenue operations at a large magazine publisher.
  • Programmatic ads will no longer just feature below-the-fold and standard ad units. Many publishers are already making more premium inventory available programmatically. “The spend will be greater but I think it will be different [in terms of] the types of inventory that will be available. Rising star units are inevitably going to happen.” – Senior yield manager at a cable company.

  • There will be more integration into custom and direct buys. Our conversations with publishers suggest that as advertisers shift budgets to programmatic, they are also coming back to publishers with requests for additional value. “We have programmatic advertisers asking us for more of the things they usually get from direct buys, custom content, etc., that can’t be bought via a DSP.” – EVP of sales, web-only publisher.
  • A slowdown is coming. Many publishers experienced revenue growth in triple-digit percentages over the past two years. But publishers believe that will have to slow down as the market matures. “There will be a nuclear winter of inventory because of viewability and the shift to mobile. There is going to be a year-long contraction of desktop inventory as the fraudulent and non-viewable inventory gets flushed out of the system.” – Head of display advertising, ecommerce company.
  • But viewability is on everyone’s minds. All of the publishers we spoke with are dealing with the challenge of the relatively new “viewable impression” metric. As the VP of yield management and programmatic at a magazine publisher told us, “The big challenge for us is making sure we can deliver on viewability.” The head of display advertising at an ecommerce company put it this way: “It’s an evolving space, and we support the trend for a viewable impression. That’s where this world should end up, but it’s a growing pain. We don’t have consensus on pricing, and the measurement tools aren’t there.”

Living as we do in an age of innovation in the name of self-interest, when marketers, publishers and agencies all frantically experiment to create advantage in a fast-evolving media trading environment, one might expect publishers to take an increasingly entrenched position vis-a-vis their advertisers. However the publishers I spoke with are working hard to meet the needs of marketers and agencies, developing new products and embracing evolving modes of measurement.

For marketers, now is the time to partner with forward-thinking media sellers to advance the programmatic opportunity. Rather than just wait and see how many of these predictions come true, you can impact the future of programmatic with your marketing programs.

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