Without A Real Programmatic Direct Plan, Publishers Face PMP Pain

“The Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Scott Bender, global head of publisher strategy and business development at Prohaska Consulting.

We have all read the stats that private marketplace (PMP) transactions continue to outpace overall programmatic spending. Sixty-one percent of publishers in an eMarketer survey use PMPs as part of their revenue efforts.

While publishers of all sizes see PMP and programmatic direct as the answer to recapturing dollars in the evaporating direct/IO marketplace, they have discovered that it is often not easy. Instead of a robust new revenue channel driving high(er) CPMs from premium-value inventory, many have created thousands of rows of deal IDs, generating little to no revenue from the collective efforts of sales, operations and, of course, buyers.

Programmatic direct will continue to grow, but only for those publishers with the right approach to the market. The open marketplace, for all of its risks and challenges, continues to be a viable solution for many brands because of its inherent scale and ease of use.

Sure, brand safety and fraud still linger, but exchanges’ supply quality has cleaned up considerably in the last two years with voluntary efforts and ads.txt. As a result, publishers must give brands a reason to venture beyond the happy hunting they enjoy on the open exchange.

The product strategy

What makes you different? Publishers that simply make available the same inventory or offering that can be bought through the open exchange are wasting their time.

Even with the technologies involved, setting up a PMP is still a very manual process. From the phone calls, emails and in-person meetings, to setting up the Deal IDs, the PMP offering must be worth the buyers’ time. If you’re selling your product unbranded in one store alongside everyone else’s generic products, why would a buyer pay up to five times more at a different store for the same product, with your name on it?

A publisher providing unique first-party data can bring some compelling differentiation but scale is a known issue, even with a proper DMP setup or a CDP leveraging paid, owned and earned media.

After first-party data, sellers must leverage the scarcity that brands cannot find in the open exchange. This might be a package up of highly viewable impressions, or some other selection of specialized inventory.

Publishers need to ask themselves: Is our offering specialized enough to merit  a private marketplace deal?

Even if publishers have agreed-upon deal parameters, their efforts could result in activity that only garners pennies per day. It may just come down to a limited overlap of a brand’s target with a publisher’s available audience.  

For many publishers, the answer seems to be programmatic guaranteed, also known as programmatic direct or programmatic reserved. In contrast to PMP auction models, programmatic guaranteed closely resembles direct/IO activity, with a fixed price and guaranteed delivery of inventory, which is obviously an ideal scenario for publishers seeking predictable and forecastable revenue.

However, the offering, inventory, contextual relevance and, yes, the audience must be compelling enough to merit the effort and justify the commitment.

The organizational strategy

The silos under which sales and operations teams have historically operated cannot exist if publishers are to be successful in any direct programmatic sales efforts. How the operations team manages open exchange efforts has a direct impact on PMP and programmatic guaranteed activity.

Header bidding and other prioritization conflicts can reduce the expected delivery of any programmatic direct deal. Just as critical is the coordination required with the operations team to ensure direct programmatic deals actually deliver more than just pennies.

An audience consultant, not a seller of inventory

Media sellers must evolve beyond the broker mentality of selling impressions, or, in the case of TV (video) and radio (audio), “spots and dots.” It’s time for a more consultative approach around the power of their audiences to hit client KPI and goals.

Publishers must consider several questions:

What is their understanding of first-party data or various audience compositions within their properties?

What best practices have worked for clients in the same vertical?

Where can contextual relevance and audience segmentation deliver the highest level of engagement and ideal outcomes?

How can their audience impact a brand’s other omnichannel efforts?

Aligning goals

Goals and compensation cannot be overlooked. Most publishers are not providing commissions against open auction activity, but are the proper incentives in place to drive programmatic direct sales efforts? If the answer is no, that could be another reason why teams are underperforming.

Yes, programmatic direct can work. The trend will continue to move toward programmatic guaranteed; I predict open auctions will ultimately be reduced to the same 20% of spend that ad networks historically captured before programmatic. However, only those publishers that can execute the proper product, positioning and organizational strategy will reap the benefits.

Follow Prohaska Consulting (@TeamProhaska) and AdExchanger (@adexchanger) on Twitter.

This post was syndicated from Ad Exchanger.