What Will It Take To Unlock The Value Of Programmatic Direct?

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

Today’s column is written by Clayton Tarics, VP of product management at FatTail.

Increasing privacy regulations and anti-tracking measures are making it harder, riskier and more expensive for advertisers to reach target audiences. It’s also getting harder for publishers to monetize their inventory.

Enter programmatic direct. Private auctions, preferred deals and programmatic guaranteed all give publishers and advertisers more insight into the ad buying process without jeopardizing the efficiency of programmatic.

But programmatic direct is not as accessible as it could be due to technical and cultural limitations in the market. So what’s holding it back and how can advertisers and publishers overcome the obstacles?

Programmatic direct promises premium inventory

Programmatic direct’s core value proposition is that it provides advertisers with greater access to premium inventory and audiences. It also allows publishers to maximize value while reducing technology fees and removing intermediaries. 

While private auctions have long enabled selective access to inventory, less commonly used forms of programmatic direct, such as preferred deals and programmatic guaranteed, go one step further, offering fixed pricing and inventory commitments. The appeal is clear: Many advertisers will welcome the opportunity to take advantage of price guarantees and inventory commitments to reach their target audiences.

Meanwhile, for publishers, programmatic direct offers an opportunity for differentiation based not only on audience size and type, but also service. Collaborative, higher-value deals will enable publishers to get the most out of their inventory after years of having to choose between efficiency and maximum ROI.

For programmatic direct to take off, culture and tech must align

Despite its potential, technical and cultural forces are preventing programmatic direct from becoming a more common advertising practice.

On the technical side, advertisers need demand-supply integrations to discover advertising products, inventory and pricing. Buyers and sellers also require infrastructure to advance deals directly within DSPs and SSPs. This will lower costs, which are currently too high.

Finally, supply and demand platforms need a standardized way of publishing supply, discovering it electronically, negotiating a deal electronically, then executing the deal. In today’s market, these standards are elusive.

On the cultural side, publishers are unaccustomed to putting their product, inventory and pricing into the market without publishers communicating directly about those offerings.

Advertisers, for their part, are also unfamiliar with programmatic guaranteed and other direct deal types. They are not used to self-service. A better programmatic direct ecosystem will require publishers to embrace automated access to their premium inventory and the buy side to become more familiar with their options.

People will drive the future value of programmatic

What differentiates the value of programmatic direct from other forms of programmatic advertising is its emphasis on people. People make deals: Advertisers stake their business on reaching a publisher’s readers, and publishers depend on ad spend to survive.

It is the coming together of these parties that will forge a sustainable path for programmatic advertising.

But unlocking the future of programmatic direct does not mean integrating people into manual processes.

On the contrary, better programmatic direct infrastructure will further free up time for ad buyers and sellers, allowing them to focus on high-value tasks while automation handles transactions and logistics. 

Follow FatTail (@fattailinc) and AdExchanger (@adxchanger) on Twitter.

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