Programmatic or Premium? You Should Be Using Both

The Best Media Deals May Result from Face-to-Face Sales, but Don't Exclude Tech in the Mix

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If you think that ad buyers and sellers have to choose between a programmatic or premium path, you are missing an opportunity to get the best deals by taking advantage of both.

These two are not opposites. "Programmatic" means an automated way for buyers to bid for ad inventory. "Premium" describes high-quality inventory or website content. A strategy that assumes it must be one or the other will be unbalanced, like a barbell with a weight attached to only one end.

Many media packages come together best when buyer and seller meet face-to-face and work out the right premium deal. But this doesn't mean that programmatic technologies can't be used in tandem to automate for better efficiencies.

For publishers, programmatic technologies offer unprecedented opportunities to capture demand that extends well beyond the reach of an in-house sales team. The technologies allow advertisers to put individually relevant ads in front of consumers in the right moments, based on real-time data.

Striking the right balance between these two approaches requires paying attention to a few key best practices.

Do your homework. Take time to understand what areas of your business are best suited to a programmatic approach. For publishers, this means knowing your inventory. Pages with lower earnings per thousand impressions (eCPMs) and sell-through rates are naturals for programmatic. You can lower the cost of sales and create the opportunity for a third-party bidder/buyer to raise the price in an exchange environment, by merging site data with its own customer data to discover a value for its brand(s) that it couldn't see before.

For advertisers, programmatic requires a comprehensive strategy that outlines clear objectives: the type of audience you want to reach, at what scale and the performance required. The more you define what you want from programmatic, and how it fits within your overall strategy, the better you'll be able to identify differences among the overwhelming options and pick the exchange that matches your brand needs.

Automate strategically. If a publisher lists its entire advertising inventory on an exchange and gets poor results, that's not a failure of the programmatic channel, but of strategy. The value of automation is that it eliminates busywork (like manual insertion orders) for standard ads intended to maintain a baseline level of audience. Publishers need to segment their audiences clearly -- by demographics, lifestyle and online activity -- and make the research and tracking data available to bidders. Especially at the outset, when testing programmatic, publishers need to separate what they put up for bid and what their salespeople offer directly to advertisers.

Follow the data. To bid most effectively, buyers need to know how to use all the data that is made available to them. Programmatic platforms make all the audience research available to buyers, including such key factors as content (where, exactly, the ad is running) and context (such as how much time a viewer has been on the site when they see the ad). When buyers use it all, they can discover that ad positions that seemed like commodities (the kind of inventory that buyers would bid on just to amass impressions) actually have a premium value for their purposes.

Maintain control. An ability to control the parameters of automated bidding is critical. Publishers need to be able to determine what information to share with buyers on a case-by-case basis. On the buy-side, where performance and content quality are critical factors, advertisers should also be able to set targeting parameters that protect their interests. As more controls are added, the mutual value to buying/selling inventory programmatically becomes more apparent, as buyers and sellers can more effectively reap the rewards while mitigating risk.

Advertising isn't a one-size-fits-all proposition. For advertisers and publishers alike, a fully integrated strategy combines both programmatic and premium approaches. Programmatic tools, engaged intelligently, simply take the busy work out of routine buying. This frees up resources to focus on premium custom executions, which publishers can offer to marketing partners.

David Jacobs is senior VP-publisher sales at AOL Networks.

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