Programmatic direct is on the rise and is underpinned by publishers’ pursuit of sales and ad ops efficiency.
But what exactly is Programmatic Direct?
Programmatic direct is called by many names, such as automated guaranteed or programmatic premium. Simply put, programmatic direct allows publishers and advertisers to directly buy and sell ad inventory using programmatic means. The IAB defines it as a 1-on-1 sale with fixed pricing and reserved inventory through programmatic processes.
But programmatic direct shouldn’t be confused with real-time bidding, since it does not involve an auction. In RTB, ads are bought and sold on a per impression basis, while in programmatic direct ad inventory is bought in advance.
The Growth of Programmatic Direct
Programmatic direct has been the fastest growing programmatic transaction method for digital display ads in 2015. According to an eMarketer prediction, programmatic direct is expected to reach 54% of US programmatic ad spend by 2017, as publishers seek more efficient ways to buy and sell ad inventory.
source: eMarketer Oct, 2014
Europe’s more advanced markets, such as the UK, Netherlands and France, are similar to the US market in terms of the adoption of programmatic direct. As stated in an eMarketer report, over half of European publishers “seek to make premium inventory available at scale.”
However, the survey also shows that “47% of publishers are still manually trading 81% or more of their digital display advertising revenue,” meaning there is an opportunity to optimise sales and ad operations.
Why is programmatic direct growing so fast?
Publishers are looking to take advantage of automation in a guaranteed environment. This has led many publishers to adopt programmatic direct, which offers RTB-based optimisations with security and premium inventory upfront. They are also looking for efficiency in programmatic. According to IAB Europe’s “Attitudes towards programmatic advertising”, 69 percent of publishers cite sales and ad operations efficiency as a reason to adopt programmatic methods of advertising.
Publishers are starting to see the benefits programmatic can have in sales and ad operations efficiency, such the ability to improve on the lengthy Insertion Order (IO) process.
Advertisers benefit too, since they can buy premium inventory with the same guarantees they got when dealing with the publisher’s sales team. As more branding budgets are assigned to digital channels, both buyers and sellers look to programmatic technology to secure advertising agreements in advance, thereby sidestepping traditional direct sales channels.
Another reason why programmatic has exploded in the past year is due partially to the IAB’s release of its OpenDirect specification.
This new standard will offer publishers a number of benefits, such as:
- Increased workflow efficiencies
- Greater control in packaging, pricing, and delivery of inventory
- Reliable means of automating reserved inventory (IAB OpenDirect Specification)
For advertisers, this means being able to connect programmatically to multiple publishers’ guaranteed inventory, while avoiding multiple and costly custom integrations.
The release of the final version of OpenDirect in the beginning of 2015 has enhanced the growth of programmatic direct. We expect this growth to continue in 2016, especially in Europe’s more mature markets.
Are you planning to offer programmatic direct in 2016? Let us know what is driving you to adopt this technology or holding you back. Share your thoughts in the comments below