Programmatic Direct is a type of digital advertising that combines the automation and efficiency of programmatic with the control of traditional ad placements.
The Great Time Suck
Why Publishers Hate the Transactional RFP Business I have been thinking about, and trying to solve, agency digital workflow problems since 2008. Given the complexity of digital media, the variety of creative sizes, millions of ad-supported sites, and dozens of ad servers, analytics platforms, order management and billing tools, it goes without saying that the digital marketing stack has been hard for any agency to put together. Recent research has tracked the immense level of complexity involved in digital media planning (more than 40 steps) and the tremendous expense involved in creating the actual plan (up to 12% of the media spend). It all adds up to a lot of manual work for which agencies are not willing to pay top dollar, along with frustrated agency employees, overbilled clients and a sea of technology “solution providers” that only seem to add to the complexity. Media planning on the agency side is a big time suck. Yet some agencies are still [...]
The Hourglass Funnel Changes Everything
Lately, I’ve been thinking a lot about the hourglass funnel. Most funnels stop at the thin bottom, when a customer “drops” out, having made the journey through awareness, interest, desire and action. After the “action,” or purchase, the customer gets put into a CRM to be included in more traditional marketing outreach efforts, such as calls, e-mails, and catalogue mailings. In the past, marketers often thought about how to turn customers into advocates, but couldn’t figure out how to do it at scale. Companies that were really good at multi-level marketing, like Amway, didn’t have easy-to-replicate business models. Today, the situation has changed. Social-media platforms give marketers tools to engage customers in their CRMs and bring them back through the bottom of the funnel, turning them into brand advocates — and maybe even salespeople. This is why Salesforce has been snatching up social-media companies like Radian6 and Buddy Media, while Oracle bought Vitrue and Involver. These platforms can help get people talking about your [...]
The Fat Middle
I recently sat through some great presentations on “programmatic direct” media buying at the recent Tech for Direct event in New York. With almost 70% of digital display dollars flowing through the negotiated (RFP) market, everyone wants to be in the game.
A Contrarian View of Programmatic RTB
I’ve always loved the notion of programmatic RTB. As a data hound and an early adopter of Appnexus , the notion that advertisers can achieve highly granular levels of targeting and utilize algorithms to impact performance is right in my wheelhouse. Today’s ad tech, replete with 300 companies that enable data-driven audience segmentation, targeting, and analytics is testament to the efficiency of buying ads one impression at a time. But what if driving efficiency in display actually does more harm than good? Today’s RTB practitioners have become extremely relentless in pursuit of the perfect audience. It starts with retargeting, which uses first party data to serve ads only to people who are already deeply within the customer funnel. No waste there. The next tactic is to target behavioral “intenders” who, according to their cookies, have done everything BUT purchase something. Guess what? If I have searched 4 times in the last three hours for a flight from JFK to SFO, [...]
Complexity is the Digital Ad Agency’s Best Friend
I once heard Terence Kawaja remark that “complexity is the agency’s best friend.” It’s hard to argue with that. Early digital agencies were necessary because doing things like running e-mail campaigns, building websites, and buying banner ads were really complicated. You needed nerdy guys who knew how to write HTML and understood what “Atlas” did. Companies like Operative grew admirable services businesses that took advantage of the fact that trafficking banner ads really sucked, and large publishers couldn’t be bothered to build those capabilities internally. The early days were great times for digital agencies. They were solving real problems. Fast forward 13 years. Digital agencies are still thriving, mostly by unpacking other types of complexity. “Social media experts” were created to consult marketers on the new social marketing channel, “trading desks” launched to leverage the explosion of incomprehensible RTB systems, and terms like “paid, owned, and earned” were coined to complexify digital options. It’s hard being a marketer. So much [...]
2013 Will be the Year of Programmatic Direct
Fairfax Cone, the founder of Foote, Cone, and Belding once famously remarked that the problem with the agency business was that “the inventory goes down the elevator at night.” He was talking about the people themselves. For digital media agencies, who rely on 23 year-old media planners to work long hours grinding on Excel spreadsheets and managing vendors, that might be a problem. For all of the hype and investment behind real-time bidding, the fact is that “programmatically bought” media (RTB) will only account for roughly $2B of the anticipated $15B in digital display spending this year, or a little over 13% depending on who you believe. Even if that number were to double, the lion’s share of digital display still happens the old fashioned way: Publishers hand-sell premium guaranteed inventory to agencies. Kawaja map companies, founded to apply data and technology to the problem of audience buying, have gotten the most ink, most venture funding, and most share of [...]
Programmatic Direct is not about Bidding
“A market is never saturated with a good product, but it is quickly saturated with a bad one” - Henry Ford When it comes to digital publishing sales, it seems like many publishers are questioning whether the product they have—the standard banner ad—is what they should be selling. Last month, I wrote that 2013 would be the year of programmatic direct, where LUMA map companies who make their living in real time bidding turn towards the guaranteed space, where 80% of digital marketing dollars are being spent. My recent experience at Digiday Exchange Summit convinced me that this meme continues—with an important distinction: programmatic direct (also described as “programmatic premium”) is not about bidding on quality inventory through exchanges. Rather, it is about using technology to enable premium guaranteed buys at scale. Here is what I heard: The Era of the Transactional RFP is Over Forbes’ Meredith Levien currently gets 10% of her display revenue from programmatic buying, up from 2% [...]
On the Road to Programmatic Direct
As the bloated Display LUMAscape shifts, more and more companies focused on real time bidding are turning their venture-funded ships in the direction of programmatic direct and trying to pivot towards an area where nearly 80% of display media budgets are spent. This has been called the “Sutton Pivot,” referring to the notion of robbing banks, because “that’s where the money is.” The fact that that 80%—over $6 billion—is largely transacted using e-mail, Microsoft Excel, and fax machines is staggering in a world in which Facebook is becoming passé. a lot of people have been calling the move to create efficiency in guaranteed display buying “programmatic premium,” but it’s not 100% about inventory quality. The larger question is whether or not publishers are going to enable truly premium inventory to be purchased in a way that lessens their control. At a recent industry conference, publishers including Gannett and Turner completely rejected RTB and “programmatic” notions. In a world of ever growing inventory, [...]
How you Pay Your Agency Matters
I have been working for a company that makes software solutions for buying digital media, and I have worked for a number of ad technology companies in the past. In a world where digital banner ads are still purchased through e-mail and fax, and media plans are mostly created using Microsoft Excel—technology dating from 1985—the ad technology industry sees an opportunity to create efficiencies in the way media is bought and sold. As an industry, one of the odd dynamics we have encountered in bringing our product to market is how independent agencies are more apt to embrace new efficiencies than the “big four” owned agencies who lead the space in terms of media spend. Logically, you would think that gigantic media agencies, managing hundreds of media planners and buying on thousands on digital media channels, would grasp at the chance to do more planning with fewer personnel, migrating towards web-based tools that offer efficiency and centralization. The evidence has [...]
If it’s not Programmatic Premium, then what is it?
I recently returned from an exciting IAB Annual Leadership Meeting in Phoenix, where a packed Arizona Biltmore resort was host to over 800 digital media luminaries. On the tip of many tongues over a two day session was “programmatic premium,” the term our industry is using to describe the buying of digital media in a more automated way. One particular “Town Hall” type meeting was particularly spirited, as leaders sparred over what “programmatic” meant, whether or not publishers should be using it, and how agencies were leveraging it. Here is what I heard: We are calling it the wrong thing. Like it or not, the term “programmatic” is tied to the concept of real time bidding. This is natural, given the fact that the last 5 years in ad tech have largely revolved around DSPs, SSPs, and cookie-level data. This creates a problem because, when you add the word “premium” into the mix, you have a really big disconnect. Most folks don’t [...]