Programmatic Premium Makes A Big Splash in November 2012
There’s been a lot of great news, discussion and a little drama around the world of ad tech the past couple of months about something we’ve been talking about for a long time now, the programmatic buying and selling of reserved display inventory. At this point there’s no denying that the emergence of programmatic premium (or whatever we’re calling it now) is happening and as a result is changing the ways that publishers package up and sell their most valuable inventory. Although it’s still early in the game there’s been no lack of opinions when it comes how this is going to affect the future of the ad tech landscape.
This new arrival into the once RTB-only market of programmatic buying and selling is really exciting for me and the rest of the isocket team and to be completely honest a long time coming. Not only have we been the group pushing this new opportunity out into the open but we’ve also been a long-time leader in the space that’s just starting to take shape and get some attention.
Even though we’ve been ridiculously busy doubling our headcount around here it’s been hard (if not impossible) to ignore the amount of news focused on this hot, new topic of programmatic premium. The news surrounding it (and other similar topics) started around the end of October, continued through November and still seems to be going strong now that we’re in December. We did our best to keep track of the many blog posts, articles and even twitter conversations that caught our attention and thought it would be nice to have them all packaged together in one place. With that being said, here’s some of the content we thought was worth reading through, along with some of our thoughts on each one. Enjoy!
10/25 The New York Times blames revenue loss on “programmatic buying”, RTB and exchanges
The end of October started with AdExchanger writing a piece on the New York Times announcing that it had lost 2.2% in digital advertising revenues. That’s news in itself but the real story was that their CFO James Follo blamed this on the fact that marketers are more price sensitive due to the lower CPMs that they’re buying though RTB and ad exchanges.
We see this as a wake-up call for publishers to get a better handle on what inventory they offer in RTB vs. what they offer only on a guaranteed basis. It’s not a matter of who sells it (with sales people, through APIs, etc.) but how it’s sold (through bidding or a guarantee).
10/31 John Batelle from Federated Media preaches RTB and native advertising are the future
John Batelle, never one to be shy with his opinions posts more about the death of display and the rise of native advertising. He also coins the term “the boxes and rectangles business” which I really like and tend to use a lot (thanks, John).
With the acquisition of Lijit his group at Federated Media is deep into RTB so it’s not that he doesn’t understand the need for display, he’s just not sure what to do about the time and resources that go into selling that type of inventory directly. More on this later.
11/6 AdWeek talks about the messy world of ad tech
Just days before Ad:Tech in NY AdWeek threw out a doozy of a long-form piece titled Ad Wreck that basically said all of the advances in ad tech has actually hurt the overall industry, especially for premium publishers. There are some good numbers about the amount of VC investment that’s flowed into ad tech, how most ad tech companies say they’re one thing and are really something else and if there’s an acronym on the Lumascape I’m pretty sure it got ink somewhere in this post.
We certainly don’t think that all of ad tech is a mess, but there has definitely been too much focus on the remnant/RTB side of the business not enough for direct sales (which is the largest revenue generator for premium publishers).
(Ad:Tech NY was on Nov 7/8 which included lots of activity around programmatic premium)
11/8 More on the death of premium display advertising (and premium publishers along with it)
Well, here we go again — more doom and gloom for the premium publisher. This time it’s coming from a piece on MediaPost by a researcher named Brian Wieser who basically says that this is the beginning of the end for not only premium display advertising but also the web’s most well-known publishers. He says that the drivers of this trend are lack of infrastructure for premium inventory, a rise in audience buying, flat ad budgets from brands and an overall weak forecast for online ad spending in 2013.
11/8 Tony Katsur tells us that programmatic isn’t only RTB
We’re a big fan of Tony Katsur over here and he nailed it with this post about how programmatic isn’t only RTB. He mentions how the NYT mentioned that “programmatic” buying was one of the reasons why they took a revenue hit when in reality they meant RTB. Up until now these two terms have basically meant the same thing but it’s time for programmatic to mean more than that.
I think Tony said it best when he mentioned this in the post:
Programmatic is not necessarily the issue here and when it comes to selling premium directly, using programmatic solutions to help deliver it and achieve the objectives of the advertisers are becoming essential.
We couldn’t agree more, Tony.
11/8 Federated Media shuts down it’s direct display business
The last, but definitely not least of the news that came out on November 8th is that Federated Media put their money where their mouth is and shut down their entire direct sales division. For John Batelle I’m sure this was a long time coming but for the rest of the industry this was another sign that for direct sales to stay alive for premium publishers it can’t continue to work like it does now. In other words, it’s time to take a serious look at premium programmatic and see how it can help solve this problem that Federated Media is the first to do something about.
The way we see this all shaking out is using RTB for remnant, programmatic premium for reserved/direct inventory and sales teams for custom/native.
11/12 You want more death, you got it. A post by Brian Wieser
Apparently MediaPost wanted to hear more about the doom and gloom that analyst Brian Wieser has for the premium advertising/publishing industry. If you want to read how the online publishing world is coming to an end quicker than you can say “audience targeting” you should check this post out.
Of course, we don’t think what’s happening is irreversible like Brian seems to believe but we do think that the way that premium inventory is offered, bought and sold should change. Actually, that’s what we’ve been working on for the past few years – go figure.
11/14 AdExchanger gives a premium publisher bad news roundup on digital brand ad spend
Apparently Federated Media and NYTCo. aren’t the only premium publishers who are seeing some downward pressure on their premium ad revenues. This post on AdExchanger is a great roundup of some other big players like AOL and Yahoo who are also seeing some similar trends happen.
It’s not quite as bad as it seems and we see this as a wake-up call to the industry to start taking a more serious look at other options when it comes to offering their direct, reserved inventory to buyers. Programmatic premium anyone?
11/19 Define it: What is programmatic buying?
This quick hitter from AdExhanger gives a nice and quick overview of how different buy-side ad tech companies define the term “programmatic buying” which is changing right before our very eyes.
Here’s a good quote from Andy Cocker, the co-founder of Infectious Media:
The majority of inventory available via programmatic is non-guaranteed, auction traded during the ad call although we expect to see more guaranteed reserved ‘premium’ inventory available in the future.
and the winner of the simple and straight-forward quote of the piece was given by the one, the only Mr. Joe Z, the CEO from MediaMath (who we’re partnering up with on the programmatic premium side):
The use of technology to automate processes and the use of math to improve results.
It is the future of marketing, available now.
Well said, Joe. Well said.
11/20 Joe Pych from NextMark knows one obvious way to save the premium publisher
Speaking of Joe’s who we really like — Joe Pych, the founder of NextMark, wrote a great post on The MakeGood about how there’s an easy and obvious fix to the issues that most premium publishers are having with their direct sales business.
His obvious idea: make it easier for people to buy from you.
Joe has a very valid point that making it easier for marketers to find and buy publisher’s best inventory is going to help solve some of serious problems that are happening. We tend to agree and thanks for the shout-out, Joe.
11/20 Define It: What Is Programmatic Selling?
Once again our friends over at AdExchanger ask a question that’s been on everyone’s minds: what is programmatic selling? This time around there are several people on the pub-side who chime in with their thoughts.
No one ever really comes out and says it but programmatic premium is mixed in throughout each and every one of the quotes. Here are a few that got my attention:
Frank Adante, CEO of Rubicon:
There are two types of automation:
a) transactions via private and public “auctions” and
b) individual “orders” between a publisher and an advertiser/agency.
Rajeev Goel, CEO of Pubmatic:
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.
Jonathon Shaevitz, CEO of Maxifier:
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.
All of a sudden the new idea of programmatic premium is starting to show up everywhere and we couldn’t be happier. It’s about time and there’s a lot more where this came from, my friends.
11/27 Zach Coelius responds to the Ad Wreck post on Ad Week
Love him or hate him it’s hard to ignore Zach Coelius and not just because he’s wearing that red Triggit t-shirt every time I see him. He’s one of the biggest believers and spokespeople for the RTB industry and it’s always interesting to see who he’s debating (arguing) industry-related thoughts with through his Twitter account.
After seeing the Ad Wreck piece on Ad Week Zach decided to give his side of the effects of the recent advances in ad tech and how they’re finally moving the entire industry in the right direction. Although we don’t always see eye-to-eye with Zach he usually makes good points with whatever he writes. Where Zach sees a world that’s full of only RTB we see a different world that is made up of both RTB and programmatic premium, but that doesn’t mean that we can’t have civil discussions on Twitter about it.
11/29 AdMonsters digs deep into Programmatic Premium (Part I and II)
Right at the end of the month one of our favorite ad-related editors, Gavin Dunaway from AdMonsters, released the first of a two-part series on all things programmatic premium. This post is already long enough and there’s way too much meat in Gavin’s overview to even try to explain it here.
Props to Ad Monsters for really digging into the world or programmatic premium and for taking the time to take a holistic view of what it is, where it came from and how it goes much beyond the current world of RTB.
While the first post gives a good overview of programmatic premium the second installment from Gavin is all about the groups who are currently involved in this market (like isocket) and some real-world scenarios of how it’s all playing out. It’s still early but there’s already a good amount of activity that’s going on and Gavin gives some great insight into what’s really happening.
Over the past month or so these posts (and I’m sure a few that we missed) have done a great job of bringing the world of programmatic premium to the attention of both marketers and publishers. If you’re wondering about what all of this means for you and your business please be sure to reach out to us and we’d be more than happy to tell you all about it.
If you made it down this far, thanks for reading and it would be great to hear from you so don’t be shy.
All of us here at isocket are excited for the opportunity that programmatic premium is bringing to the world of premium display advertising. If you would like to join our team and be a leader in this market please check out these jobs that we’re hiring for. We’d love to hear from you!