Today’s column is written by Tom Shields, Co-Founder and Chief Strategy Officer of Yieldex, an analytics tools provider for sell-side, yield optimization.
Over the last three months, the word “programmatic” has been featured in the headlines of dozens of articles, and each one seems to use a different definition. This confusion was a central topic this week at a packed Town Hall held at the IAB’s Annual Leadership Meeting. Is programmatic just for RTB, or does it incorporate direct relationships? Does programmatic include guaranteed impressions, or guaranteed CPMs, or both? What emerged was a consensus that “programmatic” is being used to describe at least two completely different things: RTB, and process automation.
Most people think programmatic equals RTB, and despite heroic efforts by Legolas Media’s Ran Cohen and others to redefine programmatic to include non-RTB delivery, nearly everyone still thinks of programmatic and direct delivery as opposites. Scott Spencer at Google defines programmatic in an RTB context: “In programmatic, the buyer gets to determine what inventory they get,” whether the price is directly negotiated (like a private exchange) or an auction. AppNexus’ Andy Atherton points out on his personal blog that this is a one-way guarantee – the seller guarantees to provide impressions, but the buyer doesn’t guarantee to take them.
The confusing part is when people also use “programmatic” to refer to automation and standardization of the operational processes involved in executing a buy. Standard direct-sold buys, the kind that Meredith Levien refers to as “transactional RFPs“, have cried out for execution protocols for nearly a decade. Of course, process automation can apply to negotiated programmatic buys as well, as the fulfillment process is often arduous. One publisher (who shall remain anonymous) recently lamented the effort it took to execute private exchanges, telling me “programmatic buys are the most manual part of our process.”
If programmatic didn’t already have a strong association with RTB, it would be a good term for this, but given that execution process automation can apply to both RTB and direct buys, overloading “programmatic” just adds confusion and slows adoption. I would submit that “automated” is a better word. Automation implies server-to-server connections and operational efficiency, and can be used to execute buys that are either direct (e.g. Automated Direct) or programmatic (e.g. Automated Private Exchange).
Automated Direct and Automated Private Exchanges are both very exciting areas of innovation today, and I look forward to seeing dozens of other articles explaining them in the future. As ad technologies become more sophisticated, we need well-defined terms to cut through the confusion and grow the market for everyone. Let’s not try to expand “programmatic” to include everything, or the term will become as meaningless as “premium” has become. Instead, let’s keep “direct” and when it is automated, call it Automated Direct.