Opinions

Premium Programmatic: Attracting the Right Audience at Scale

Posted by Michelle Manafy on March 18th, 2014 at 10:46 am

As if defining programmatic wasn’t fun enough, add the word premium and you create something even less understood. Some interpret it as an oxymoron while others believe is the best of both worlds.

At its essence, programmatic ad buying -- of which Real Time Buying (RTB) is a subset -- is about efficiency. When a marketer wants to reach as large an audience as possible, as easily as possible, they may turn to programmatic ad buying, which allows them to use a software platform to purchase advertising. The stock exchange is often used as a metaphor to understand programmatic buying: Sites have unsold inventory they pass to an ad exchange--sort of like a stock exchange--and advertisers use demand-side platforms, which would be akin to an automated stock broker, to purchase the inventory. This eliminates the RFP process and makes getting the word out much faster.

Who that word reaches is the big question. While traditional digital display advertising offers the ability to match audience insights with ad messages, programmatic does not. That’s where “premium programmatic” fits in.

As Cox Media Group’s Executive VP of Strategy & Digital Innovation Neil Johnston sums it up, “The value proposition of programmatic advertising is the efficiency and scale that automated buying confers. Premium programmatic retains these values, while adding in the safety and fidelity of guaranteed site-direct buying.”

Premium programmatic streamlines some of the ad placement process because, while it is directly sold and personally negotiated, it is programmatically executed. The opportunity for marketers, says Chip Schenck who joined Meredith as its first VP/Programmatic Sales and Strategy in January, is to obtain higher value ad inventory. Though he says this depends on “how you define ‘higher value’…This might mean earlier look, higher in the frequency curve, specific inventory, audience enriched, etc. It could mean a better environment versus the open exchange.”

Yet as CEO IDG TechNetwork & CDO IDG Communications Peter Longo, who has been actively leading IDG’s participation programmatic since 2008 when the company launched TechNetwork, points out “the definition is constantly changing. What we thought was programmatic two years ago, what we thought it was six months ago, and where it is today are all very different.  As advertisers continue to experiment, this definition is going to keep shifting.”

IDG approaches premium programmatic as a way “to create micro-audiences at scale,” he says. For example, if an advertiser wants to reach people interested in cloud computing at companies with more than 500 employees. By combining first party data and programmatic, “you can build a sizeable audience even for something really targeted.”

Generally, Longo finds that marketers leverage programmatic for direct response and finds that even with premium programmatic, IDG doesn’t see it used much for general branding campaigns. Johnston on the other hand says that “Practically any campaign, shy of a truly integrated/native one, can benefit from the advantages of programmatic. While there is currently a bias towards premium for branding and RTB for performance, the lines are blurring as scale and measurement improve optimization in the premium space, and transparency and viewability improve brand safety in the RTB space.”

Schenck has a similar perspective: “Programmatic has been used to deliver a lot of direct response campaigns in the past because it was so price driven. However, leveraging targeting capabilities, transparency of placement, contextual adjacency when desired, the halo effect from a strong consumer media brand and the benefits of efficient media -- any form of communication can work programmatically.”

The caveat here is that these publishers are proactively creating programmatic offerings that bring with them some of the value proposition of traditional display. As Schenk says, “Premium programmatic offers the best mix of pricing efficiency, targeting, reach and scale, while still getting the safety and engagement of trusted contextual environments.”

All agree that the value of building a programmatic offering into a media brands’ larger mix of advertising solutions offers marketers an attractive blend of quality and efficiency. Longo sees that “there is still some hesitation on the part of publishers to incorporate programmatic into the mix,” most of which revolves around pricing. However he finds that “the ability to use first-party data keeps us from undercutting display.”

“While programmatic will evolve, it’s here to stay,” says Johnston.” And his prediction is backed by Interpublic research, which found that programmatic already accounts for about half of all online display advertising purchased in the U.S.

“So get educated,” advises Johnston. “And, more than anything, get started.”

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