The curation craze has taken over open-web auctions – and now it’s coming for programmatic direct deals.
Curation is a “great way” to shift net new ad dollars away from the walled gardens and toward open web publishers, said Heather Carver, CRO at Freestar, an ad network representing more than 500 publishers, most of which can’t afford to support a large direct sales team.
Freestar recently adopted a new approach to curation developed by Audigent called Premium Priority Deals (PPD) that debuted at the Prebid Summit in New York City last month.
PPDs give buyers a “priority lane” to the middle tier of publisher inventory that wouldn’t typically be sold directly but that has higher viewability and attention scores than most open-auction inventory, Audigent CEO Drew Stein told AdExchanger.
Direct dollars
Advertisers can use the PPD model to curate inventory at scale without having to strike individual direct deals with hundreds of pubs, Stein said. And publishers can attract direct programmatic display budgets, which represent a much larger market than open auction programmatic.
Advertisers spend roughly $450 billion on direct deals every year compared with roughly $150 billion on open web display and in private marketplaces (PMP), according to research by S&P Global Market Intelligence and eMarketer.
Meanwhile, programmatic direct claims 75% of annual display ad budgets, which disproportionately flow toward walled garden ad platforms, Stein said.
That disparity persists because open web publishers can’t match the audience scale of a player like Meta, Carver said, and most also lack anywhere near the amount of direct sales support they’d need to compete. That’s why Freestar’s demand team focuses more on programmatic activation than direct sales, she said.
Plus, buyers often don’t even know what they’re buying on the open web, said Chris Kane, founder of Jounce Media, which is vetting all PPD inventory.
Buyers typically have more confidence – rightly or wrongly – in the inventory they buy from walled gardens, he said.
Being able to curate inventory across publishers and sell it directly using the same programmatic pipes they use for other deals can give smaller pubs without a direct sales infrastructure a leg up when competing with walled gardens, Carver said. It also gives advertisers more transparency into the inventory they’re buying.
Baby carrots
But the value proposition for PPDs only works for buyers if they get access to premium inventory they couldn’t get elsewhere via open auction, Stein said.
Audigent is focusing on high-attention, high-viewability inventory that’s currently being devalued because it’s lumped in with less desirable open auction inventory.
The idea is to repackage certain mid-tier inventory that has value but can’t be sold as top-shelf premium by placing it in a slightly less premium tier – similar to how grocers created the highly lucrative baby carrot market by repackaging broken carrots in a way that highlighted their value, said Audigent CMO Dave Rosner.
To maintain quality, Jounce Media cuts out any MFA inventory and other lower-tier placements, like outstream video, and also evaluates the supply chains so buyers can “make detailed choices about what supply chain boundaries to put around each of these deal IDs,” Kane said.
But this isn’t simply reselling impressions and collecting an ad tech fee without adding anything of value, Kane said, noting that Audigent’s curated deal IDs generate incremental demand for publishers.
Fighting social with social (formats)
In practice, this approach allows a publisher network like Freestar to get more value for inventory that uses custom formats by selling them outside of the open auction, Carver said.
For example, Freestar works with Spaceback to create rich-media inventory that mimics social video, Carver said. Freestar can then make adjustments to its Prebid setup to give certain preferred buyers – such as PPD buyers – priority access to this inventory via its ad server.
Freestar can sell this inventory more directly to buyers that recognize its value, while setting it apart from the standard IAB inventory it sells via open auction, Carver said. And if Freestar doesn’t sell out its rich-media inventory via PPD deals, it can still sell the remainder through the open marketplace.
Freestar is also hoping PPDs can bring the higher CPMs it’s seen from curated deals to programmatic direct, Carver said. Around 30% of its Prebid inventory has a deal ID attached, and the CPMs for these curated PMPs tend to be 2x higher than for open auction inventory.
Many curated deals currently compete with open auctions on pricing, she added, so curating a more premium tier of inventory and selling it as a programmatic direct deal could yield even higher prices from buyers that purchase a lot of that inventory.
For instance, Freestar could set up a preferred deal through one of its SSP partners that allows its PPD inventory to be sold for a $5 bid via open auction, but a $2 bid to preferred buyers, Carver said. That way, Freestar could prioritize a $2 bid from a preferred buyer that has committed to spending $100,000 per month, rather than a $5 open-auction bidder that might only end up spending $100 a month.
“It’s an opportunity,” Carver said, “to double down with our SSP partners and the brands and agencies they work with to capture more budget by delivering something that is truly differentiated.”
