Collaboration Is Key In The Market For Success
AppNexus recently held its annual summit in Europe with a host of new product announcements, which while generally greeted by the market, did raise questions from media traders, both on the buy- and sell-side alike. Here Nigel Gilbert, AppNexus, VP, sales, EMEA, explains how he feels the company’s latest product launches can benefit both ends of a market, whose interests would appear at odds with one another.
While programmatic is still, to some, synonymous with real-time bidding (RTB), there are in reality multiple marketplaces, and these are set to define the future of the digital advertising industry.
And while many of today’s programmatic marketplaces are skewed towards either the buyer or seller, the future of effective advertising relies more on technology supporting effective collaboration than giving buyers an edge over sellers or vice versa.
In an RTB marketplace, sellers auction ads to the buyer on a ‘per impression’ basis. This gives the power in the relationship to the buyer.
By using audience data and real-time programmatic technology, buyers can decide to whom they want to advertise and when. Perhaps more importantly they also control how much they are willing to pay for each and every impression.
There is little transparency for the seller and many remain uncertain on how best to capitalise on the RTB opportunity.
On the flip-side, the CPC/CPA model of a performance marketplace puts the power with the seller, taking the risk out of media choice for the buyer and committing to an agreed number of leads, clicks, conversions, or installs.
There is often little transparency for the buyer on how these results are delivered and the approach can breed dependency.
Until recently, the more collaborative buyer/seller relationships had seen little more technology innovation than the move from fax to email. However, in the deals marketplace, programmatic is driving more efficient inventory discovery and reducing the number of steps it takes to agree terms and set a deal live.
From a starting point of 16 manual steps, programmatic deals can today be done in 11, but significant overhead remains in troubleshooting deal-id. As a result, deals that once took over a week to agree and go live are now faster, but still typically take several days.
However, the dramatic productivity potential of programmatic for both buyers and sellers was clear earlier this month when Accuen and Gourmet Ads did a live deal at the AppNexus Summit in a little under five minutes, following a streamlined 5 step process.
Which brings us to the core of the way the majority of digital advertising is bought and sold today – the direct or guaranteed marketplace. Here the buyer offers upfront payment or commits to buying a confirmed spot on a page to secure inventory that is in short supply.
Programmatic has the potential to empower both parties in these transactions. It allows publishers to make better use of data in packaging the inventory and buyers to integrate these valuable media assets into a marketing approach that is increasingly real-time and always-on, rather than ad-hoc, seasonal or campaign driven. Thus programmatic enables a higher-value exchange between buyer and seller, rewarding both in equal measure.
These marketplaces operate in distinctly different ways, and in each the progress toward programmatic has been specific to the marketplace dynamic. While the auction technologies of RTB can now be considered mature, the transformation of the RFP / media briefing process in guaranteed is at its very earliest stages.
As programmatic develops from its RTB and performance roots, we see increasingly that the opportunity is not for one side to beat the other, but rather that both benefit when brought together by technology to better connect brands to consumers.
Research may show that Marketers are relatively ignorant of programmatic, but they do know that when something is working its makes sense to do more of it. So, the continued growth of the ad tech industry will not be based on chasing the diminishing returns of optimising competition between buyer and seller through automating the mundane tasks, but in finding new ways to encourage buyers and sellers to collaborate to drive increased value from digital.
