Define It – What Is Programmatic Selling?

Yesterday, we asked industry leaders to describe programmatic buying – and today we explore programmatic selling.

Publishers are reviewing and implementing solutions that address opportunities around audience buying in digital.

In an effort to help bring understanding to the sell-side version of ‘programmatic,’ AdExchanger asked several executives their thoughts on the following:

“What is programmatic selling?”

Click below to read their responses:

Frank Addante, CEO, Rubicon Project

“Programmatic selling is just a fancy way of talking about automation. Simply put, it’s taking similar selling rules that a publisher would give to their direct sales team and having computers automate and enforce them electronically.

There are two types of automation:
a) transactions via private and public “auctions” and
b) individual “orders” between a publisher and an advertiser/agency.

These electronic selling methods are using computers to automate and bring real-time intelligence to what would otherwise be complicated, data-lacking manual human effort.

The overall trend the digital ad market is experiencing is automation. It’s similar to the revolutions that the finance, travel and retail markets experienced as those markets became automated through electronic transactions. We used to live in a world where consumers had to pick up a telephone and call individual airlines and hotels to book travel and send hand-written checks. Now it can be done with a few clicks of a mouse. It sounds insane to us now because it’s a world we can no longer imagine…

Years from now, we’ll look back on yesterday’s advertising market and cringe at the thought of having to use telephones, fax machines and complex Excel spreadsheets to conduct business.”

Tom Chavez, CEO, Krux

“I think of programmatic selling (PS) as the combination of technology and processes that enable publishers and marketers to drive revenue using real-time channels and machine-driven methods. While publishers earn RTB revenue from SSP’s and exchanges, I wouldn’t qualify those methods as PS. This all turns on the old principal-agent distinction: SSP’s and exchanges sell programmatically as the publisher’s agent, but for the publisher it’s an action-at-a-distance phenomenon. The current state of play is really programmatic outsourcing, not programmatic selling.

What’s are publishers’ prospects for PS as principals? For the 80-90% of the display inventory out there, who’s looking at the screen is far more valuable than what’s on the screen. This, in combination with the reality that non-search digital media is still too expensive to transact, makes PS’s machine- and data-driven methods especially attractive.”

Rajeev Goel, CEO, PubMatic

“Programmatic selling removes artificial boundaries between ‘premium context’ and ‘remnant’ inventory.  Instead of letting ads go unsold, they are enhanced with first and third party data to create audience segments advertisers desire. Real Time Bidding enables publishers to respond to instantaneous market demand. Through private marketplaces, another solution used in programmatic selling, publishers can engage in one-to-one sales with their best customers. Also, with programmatic selling, a publisher looks at the range of information on all ads sold, and efficiently manages all direct and indirect sales channels to maximize revenues. While programmatic was developed initially for agencies and advertisers, programmatic selling creates significant value and revenue growth for publishers. Putting a holistic programmatic sales strategy in place right now is essential for every publisher.”

Jonathon Shaevitz, CEO, Maxifier

“In the ad tech arms race, most of the fire power is in the hands of the buy side so the emergence of programmatic selling technologies would begin to give the publishers some new weapons to address the imbalance. For me ‘programmatic’ simply means ‘making things easier via technology’, irrespective if this is on the buy or sell side. Most importantly, programmatic selling should not be seen as simply RTB. The buying, delivery and execution of a directly sold campaign is notoriously inefficient so focus should be on solving this problem. Programmatic selling needs to move some of the margin from intermediaries to the publishers.  It should harness technology to save time, automate processes, removing complexities, and ensure the whole process runs more smoothly, while helping buyers and sellers deliver better performance.

When it comes to programmatic premium selling, you need to choose your technology wisely. The needs of premium are different from the needs of remnant, so the technologies developed for monetizing low value inventory cannot become technologies for helping sell high-value, guaranteed premium inventory.”

Tom Shields, Founder and Chief Strategy Officer, Yieldex

“Programmatic selling is any time a publisher sells inventory without directly communicating with the buyer. Selling via exchanges fits this definition. Buyers like programmatic, because they can efficiently get scale, and commoditization drives prices down. Publishers typically don’t like it, because programmatic robs them of their ability to differentiate, and introduces more middlemen to take margin. One of the most interesting areas of ad tech innovation right now is in trying to capture the best of both programmatic and direct, to preserve publisher differentiation, but still allow efficient audience buying.”

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  1. Ben Trenda

    Fast forward 2 years and re-read these answers. You can tell from these responses who is actually looking forward and who is looking backward.

  2. I’d be interested to hear Brian O’Kelley’s take on this. Per Ben’s comment, I think forward thinking would be the answer we’d see

  3. I personally vote that when we say “programmatic” we use it only in reference to “programmatic reserve”, or as Andy Atherton puts it, “the notion of a delivery guarantee or reservation, while retaining the positive associations with quality and supply-side control”.

    If we decide that all automated selling, whether auction or reserved, is “programmatic”, then so be it… but then a new set of somewhat-differentiating terms will have to be created, along with many conferences, passionate blog posts, over-hyped startups, and investment banker slides. Seen that movie.

    I call upon AdExchanger and ExchangeWire to hold an”exchange terminology symposium”. All vantage points will be heard. At the end of the day, John and Ciaran will decide on definitive definitions for a small list of terms. All others, including “DMP”, will be forbidden from AdExchanger and ExchangeWire permanently. It is, if you will, a brand safety measure for the industry.

    With newfound clarity, investor confidence will return, as will agency spend and publisher adoption. AppNexus will, finally-for-the-love-of-god, declare a clear market position. Companies with real differentiation and value will flourish; those who rely on confusion and hype will go gently into the good night.

    In sum: programmatic is what we, the leaders and editors of the ad tech realm decide it to be. Let’s choose wisely.