Media Planning & Buying

Programmatic Upfronts: The Next Step in Digital Advertising’s Automation Evolution

Posted by Seth Demsey on October 15th, 2013 at 1:22 pm

After proving its worth as a tool for automating real-time bidding on unreserved inventory, programmatic technology is successfully demonstrating that it’s more than just a one trick pony. As the recent announcement that AOL, Yahoo and Microsoft are committing to common APIs in an effort to make it easier to buy premium inventory programmatically makes clear, automation isn’t just for auctions, or for bargain purchases (aka “remnant”). More and more, advertisers are enlisting programmatic technologies to drive a much broader range of digital buys. Why? Because efficiency is what they’re after, and automating previously manual buying processes—whether for auctions or planned purchases, or unreserved or premium inventory—saves a great deal of time, money and resources that can be better spent on activities where human brainpower makes a real difference.

So what’s the next step in digital advertising’s automation revolution? Buying programmatically on an upfront basis. It’s no secret that AOL Networks has recently put a stake in the ground on this strategy by hosting the advertising industry’s first ever "Programmatic Upfront." Broadcasters have supported upfront planning for years now, by enabling marketers to purchase TV campaigns in advance. Likewise, buying programmatically upfront is simply another way to improve the efficiency and cost-effectiveness of digital media planning, while also tapping into the ability of programmatic technology to optimize performance in real-time. Here are four key ways that this approach can help drive greater value for advertisers and publishers:

1. Remove waste from the process. In the chaotic world of digital advertising, as little as 45 cents of every media dollar actually goes to the publisher, and hence towards actual inventory. This is partly a result of the considerably bloated ad tech landscape, where a host of “specialized” technology vendors and middleman are angling for a piece of the pie, but process duplication and inefficient spot buying also add to the waste. For example, setting up multiple, “one-off” buys creates a lot of administration for media planners that can eat up many extra man-hours annually. Upfront investments in programmatic packages will render these repetitive steps largely unnecessary. Buying programmatic upfront allows advertisers to commit budget in advance and take care of the administration involved just once, and then let the technology take over to do what it was designed to do:  automate the allocation and real-time optimization of those dollars thereafter. Ultimately, this means more money for publishers and a greater return on investment for advertisers, a benefit that’s already attracting upfront commitments from the likes of Hyatt Hotels and Resorts, and agencies like Accuen and Magna Global.

2. Bring predictability to an unpredictable environment. The focus on the use of programmatic technology for auctions and real-time bidding can sometimes make this landscape seem like the Wild, Wild West—if you can’t pull the trigger fast enough, you’ll lose out. While the real time optimization of ad dollars in a programmatic environment means that not everything can (or should be) set in stone, upfront buying can help bring greater predictability and control to the process. By budgeting programmatic dollars in advance, advertisers can outline a plan for a base level of reach and frequency with target audiences, while relying on the technology to pull the trigger at the right time and in the right place. And, as more and more premium inventory is offered through programmatic platforms, more and more advertisers will want to plan ahead. Locking in technology and services means that advertisers save themselves from having to make critical decisions in the moment that could have easily (and more efficiently and cost effectively) been ironed out upfront.

3. Improve always-on optimization from advanced technologies. Upfront investments will ultimately strengthen the performance and results of core programmatic technologies, which is a benefit for advertisers and publishers alike. Just as the technology Netflix uses gets better at recommending movies you might like the more you view and rate their content, programmatic technologies get better at optimizing performance and targeting audiences the more they are “on.” As soon as programmatic technologies are engaged, they can begin to gather and leverage the data that’s absolutely crucial to automating the delivery of ads to the right audience, at the right time, in the right place.

4. Free up time to focus on the high-impact creatives that define a brand. What would your organization do with more time? In the end, buying programmatic upfront is all about efficiency—further reducing the administration, redundancies and waste that are driven by unnecessary and repetitive manual processes. By committing to programmatic packages upfront and taking advantage of all that automation has to offer, advertisers will save time, money and resources that can be re-directed to more strategic initiatives and creative marketing solutions. Less time on busywork means that more expertise can be devoted to high-impact initiatives that define your brand.

Buying programmatic upfront is about gaining an advantage while maintaining control of your campaigns. In some cases it’s about securing scarce premium inventory, but beyond that, it’s about optimizing the resources in shortest supply – time, money, people and results.

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