Rise Of The Hybrid Advertiser

brianmikaliseditedThe Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Brian Mikalis, senior vice president of monetization at Pandora.

Looking back about 10 years, marketers either focused on driving brand metrics or worked to achieve immediate direct-response results. The sell side often tried to differentiate these advertisers based on the cost model the advertiser was willing to pay, such as CPM campaigns for brands and cost-per-click and cost-per-action campaigns for direct response.

Publishers and networks primarily focused on building solutions for brand advertisers in an effort to earn higher rates and consistent business from advertisers with the largest budgets. The leftover inventory went to direct-response advertisers looking for scale and cheaper rates to make the campaigns work for their strict return on investment goals.

A few advertisers always had both brand goals and direct-response goals, but often had separate buying teams or agencies representing the different budgets. Other advertisers wanted both in a single campaign – the premium high-impact placements and the scale and pricing of traditional direct-response advertisers. The sell side was left scratching its heads on what to do.

Forward-thinking publishers – more of them recently – have developed solutions for both brand and direct-response advertisers without commoditizing their inventory. They have created teams of specialists, including those who address specific direct-response results alongside traditional brand sellers. I call this a hybrid team.

However, with budgets rapidly moving to programmatic, which has a legacy as a direct-response mechanism, it becomes more difficult for publishers to understand whether advertisers are trying to achieve brand goals or direct-response results. It’s also challenging to price inventory compared to when there was a rate card for guaranteed media and a dynamic rate card for non-guaranteed inventory.

So what should publishers do to ensure they are meeting the needs of advertisers while also managing yield effectively for guaranteed and non-guaranteed inventory?

Transparency And Open Communication

First of all, programmatic cannot be a black box. Transparency and open communication from the publisher and the advertiser is the key. Just because the campaign is going through a new set of pipes and the advertiser has more control of the campaign, there is no reason why the publisher shouldn’t be informed along every step and get suggestions along the way on how they can improve their campaign, whether it is set up to achieve brand metrics or drive an immediate response.

For instance, for the hybrid advertiser, publishers should recommend setting up separate programmatic deals. The brand campaign might be better off running on a certain ad placement while the direct-response campaign could benefit from leveraging a certain set of data.

Price Floors Drive Volume

When a publisher’s team is informed about all the desired outcomes of a campaign, the right programmatic option – preferred vs. private marketplace, for example – and price floor can be recommended to the marketer. If the marketer wants to retarget a very niche audience, the price floor recommendation should be on the higher side so the marketer can win as many bids as possible to reach its target. If the marketer wants to cast a wider net to find new prospects, the price floor can be lower since the targeting constraints are not in place. The goal here is to deliver the right audience to match the marketer’s goals, whether those goals are to drive brand awareness or get a user to fill out a form. Even if the inventory is purchased programmatically in a non-guaranteed environment, the right price floor is critical to deliver the audience at scale.

Marketers have many goals they can achieve through digital marketing, and publishers need to realize they can’t offer a one-size-fits-all solution. Publishers with solutions that meet the needs of traditional brand campaigns and direct-response campaigns, all at once, will have an advantage because they can get access to more budget and form deeper relationships with their key clients.

As more marketers migrate budgets to programmatic, the lines between brand and direct response start to blur, so publishers need to keep a watchful eye on this transition and have a strategy and solution in place to satisfy their clients’ needs.

Follow Pandora (Pandora_radio) and AdExchanger (@adexchanger) on Twitter.

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