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 premium” and trying to pivot toward an area where nearly 80 percent 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 percent – over $6 billion – is largely transacted using email, Microsoft Excel, and fax machines is staggering in a world in which Facebook is becoming passé. The larger question is whether or not publishers are going to enable true 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, the premium stuff is shrinking as a percentage – and that means scarcity, which is the publisher’s best friend. Selling less of a higher margin product is business 101.
As I wrote recently, at the same conference, Forbes’ Meredith Levien laid out the three principle chunks of inventory a super-premium publisher controls. I want to examine the programmatic premium notion against each of these:
Super premium. Big publishers love big “tent pole” branding campaigns, and are busy building mini agencies within their sales groups, which bring together custom sponsorship packages that go beyond IAB standard banners. A big tent pole effort might involve a home page takeover, custom rich media units, a dedicated video player, and branded social elements within a site. While some of the display elements within such a campaign can be purchased through a buying platform, this type of complex sale will never scale with technology, and is the very antithesis of “programmatic.” For many publishers, this type of sale may comprise up to 50 percent of their revenue. Today’s existing buying and selling platforms will be hard-pressed to bring “programmatic” efficiencies here.
Transactional. Many super premium (and most premium) publishers spend a lot of their time in the RFP mill, churning out 10 proposals and winning two or three of them. This “transactional RFP” business is begging for reform, and great companies like Adslot, isocket, Operative, and Shiny Ads are starting to offer ways to make selling premium inventory such as this as programmatic as possible. Companies such as Centro, Facilitate, Mediaocean, and NextMark (disclosure: my company) are starting to offer ways to make discovering and buying premium inventory such as this as programmatic as possible. Much of the RFP process is driven by advertisers looking for information that doesn’t need to be offered by a human being: how much inventory do you have, when do you have it, and how much does it cost? This information is being increasingly found within platforms – which also enable, via tight pub-side ad server integrations, the ability to “buy it now.” One-hundred percent of this business will eventually happen programmatically. Whether or not today’s big RTB players can pivot their demand- and supply-side technologies to handle this distinct type of transaction (not very “real time” and not very “bidded”) remains to be seen.
Programmatic. There will always be a place for programmatic buying in display – and there has to be, with the sheer amount of inventory available. Let’s face it: the reason the LUMAscape is so crowded is that it takes a lot of technology to find the “premium” needle in a haystack that consists of over five trillion impressions per month. If the super premium inventory publishers have to sell is spoken for, and the “transactional” premium inventory publishers sell is increasingly going to other (non-RTB) platforms, then it follows that there is very little “premium” inventory available to be bought in the programmatic channel.
“The middle layer – deals that are currently being done via the RFP process – is where “programmatic premium” is going to take place. In this type of buy, a demand-side platform will create efficiencies that eliminate the cutting and pasting of Excel and faxing and emailing of document-based orders, and a supply-side platform will help publishers expose their premium inventory to buyers with pricing and availability details. That sort of system sounds more like a “systematic guaranteed” platform for premium inventory.
So, is programmatic premium? Not the type of programmatic buying happening today.