The majority of publishers are having high hopes for the future of programmatic ad selling despite lingering concerns regarding low CPMs, diminishing revenue, ad fraud, viewability, ad blocking and the high degree of manual labor, according to a recent survey by Operative Media.
The ad-tech firm asked more than 85 premium digital publishing executives about the state of their programmatic advertising business and found that more than 80% were using some form of real-time bidding (RTB) and premium direct programmatic ad selling. But, although programmatic ad selling is widespread among premium publishers this does not mean it is working satisfactory for everyone. Nearly one-third of survey participants had negative thoughts about the future of programmatic.
Programmatic Profitability Expectations
About half of premium publishers surveyed make less than 5% of their digital advertising revenue from programmatic ad selling of any kind with RTB generating only marginally more than premium programmatic. It is no surprise publishers have been cautious exposing their premium inventory to programmatic. Programmatic advertising is a system that enables buyers and sellers to trade on an ad exchange. In the early stages publishers handed over control of their inventory to programmatic ad exchanges and agency trading desks, but this lead in most cases to declining revenues. Most premium inventory that wasn’t sold by agency trading desks was extracted and sold for lower prices by the Rubicon Project, Facebook, AppNexus and others, but primarily by Google’s DoubleClick for Publishers ad server, which lets Google’s AdX exchange ‒ but no other exchange ‒ see and bid on every impression.
To avoid exposing their premium inventory to open RGB auctions more and more publishers are now setting up invitation-only or private marketplaces to control which buyers can access can their inventory and at what price. This way they will be able to achieve higher CPM’s and gain efficiency by selling premium inventory via automated platforms.
Programmatic Advertising Sales
The Operative Media survey reveals that publishers are divided on how to sell programmatic inventory. More than one-third of publishers participating in the survey have empowered their regular sales teams to sell all programmatic inventory, while slightly more than one-fourth (26%) are using specialists working in separate teams managing open exchanges and private auctions. 25% of publishers rely primarily on sell-side platforms like Rubicom, Pubmatic and OpenX to sell their programmatic inventory. 15% of publishers have empowered the regular digital sales team to put together multi-channel deals, including private and guaranteed programmatic inventory, but have separate teams to manage RTB deals.
Programmatic Management and Optimization
Publishers cite decreasing CPM’s and manual labor as the two factors that are most detrimental to their programmatic business, according to Operative Media.
Custom Deal Management and Manual Work. Programmatic selling may mean “automatic”, but the survey data points out that today many custom programmatic deals require a fair amount of manual behind-the-scenes work to connect buyers and sellers. Often the same amount of manual work is required compared to deals closed through traditional non-programmatic channels. And while custom programmatic deals solve some of the low CPM problems, the deals are often more complex to implement because they include audience targeting, guarantees and quality measurements such as viewability.