An Evolution of Programmatic – Programmatic Guaranteed
Charmagne JacobsTue, July 30, 2019
An Evolution of Programmatic – Programmatic Guaranteed Charmagne JacobsTue, July 30, 2019
Charmagne Jacobs, Head of Global Marketing at Adslot, describes how programmatic guaranteed (PG) fits into today’s media landscape.
The media buying landscape continues to evolve and become increasingly convoluted. While programmatic has earned its place in the sea of advertising options due to its ability to leverage data and efficiently automate the media buying process, many programmatic platforms struggle to appease advertisers’ concerns around brand safety, ad waste, fraud, lack of transparency and excessive tech taxes. Still, roughly 50% of online display advertising is orchestrated through a direct order process, a workflow that is antiquated and laborious.
To make informed campaign decisions, brands and agencies alike must understand their programmatic options and recognize the pre-eminence of programmatic guaranteed (PG). PG offers buyers safety, premium products, priority placements and crucial collaboration with publishers, along with the data and efficiency of automation.
The Problem with Programmatic
When most marketers think of risks associated with programmatic, brand safety is typically the first issue that comes to mind—46% of agency leaders believe brand safety will remain a top concern throughout 2019. Despite investments in emerging technology solutions that promise safe environments, major brands continue to find their ads appearing next to extremist and negative content.
Budget cannibalization is another notorious issue with programmatic for both buyers and sellers. In many types of programmatic buying, hidden fees, technology taxes and middle men absorb much of the cost of purchase, cannibalizing a brand’s existing advertising budget. On average, demand-side platforms (DSPs) and supply-side platforms (SSPs) are reported to each take about 10% cut of the advertising dollars that flow through their platforms.
Ad waste is not a new worry for advertisers. Many have long lamented that they waste half of their budget, but they just don’t know which half. Ad waste is also present in traditional direct order buys, where, without access to publisher’s data, targeting is not as precise, and purchases are difficult to scale.
Additionally, transparency is a growing concern for all parties involved in media buying. In today’s programmatic environment, buyers and sellers struggle to gain full visibility to pricing and the final placement of ads. In a survey of ad operations professionals in the U.S., 59% reported that one of the top challenges related to ad quality is the difficulty of tracking down bad actors in the supply chain.
A layer on top of Programmatic’s safety, waste and transparency challenge the issue of efficiency. Programmatic is also not always as efficient as it is made out to be. Many programmatic options require significant resources (like setting up and managing thousands of deal IDs or reallocating budget when the campaign doesn’t deliver) and don’t always perform as well as priority directed deals that have data applied. And, since there is no guarantee of fulfillment, buyers may need to rebook or reallocate their budgets to fulfill spending goals.
The Flavors of Programmatic
Every day, new players emerge on the programmatic scene with technology to optimize, safeguard, or verify the media buying process. It’s important to remember that programmatic describes many different automated platforms and not all types of programmatic buys carry the same risks or the same rewards. Today’s programmatic landscape can largely be categorized into three types: real-time bidding (RTB), private marketplace (PMP) and programmatic guaranteed (PG).
- RTB, or open auction, is a popular approach that relies on technology to automate the bidding process. While RTB offers easy setup and is accessible for smaller advertisers, this approach is often associated with ad fraud, brand risk, high tech fees and limited transparency.
- PMP is a closed-auction approach where publishers coordinate an invitation-only marketplace and advertisers use a mostly automated process to bid for inventory. PMP is more expensive than RTB but has no guarantee of delivery. PMPs/Preferred Deals can also be susceptible to ad fraud, as witnessed in the 2017 Methbot scam.
- PG is an automated, guaranteed approach that offers advertisers the opportunity to select priority inventory within a specific timeframe. With this approach, purchases are not biddable. Buyers are guaranteed pre-negotiated inventory, with first-party targeting, within a specific flight.
The Benefits Of Programmatic Guaranteed
In an era of frequent headlines touting the latest brand safety crises, marketers are coming to the realization that the best way to reach key audiences and maintain brand control is through premium, direct buys. By leveraging a PG platform for publisher-direct media buying, brands and agencies are assured of brand safety, and eliminate the risk of the kind of ad fraud, waste and data leakage issues commonly associated with other types of programmatic.
PG also empowers advertisers to not only leverage a publisher’s deep understanding of their own audience but to then layer on their own first-party data to create a more personalized interaction. By giving brands the ability to see their first-party audience for planning, PG makes it easy for marketers to hand-select the perfect context in a safe and premium environment while connecting emotionally to their target audiences with relevant messaging.
Additionally, as a result of the direct API connection that is standard in PG, advertisers are able to plan against their first-party audience with actual available impressions (unlike with indexing strategies through header bidding tags or getting an estimate based on past performance of that data) to ensure they properly allocate budget across publishers and won’t need to worry about fulfillment issues.
When purchasing PG inventory for a competitive time slot, advertisers can be rest assured that their placements are guaranteed to deliver an agreed-upon number of impressions over a specific flight, just as they would be with a direct IO. This is especially helpful during competitive advertising seasons, like a high-profile sporting event or the lead up to a holiday.
When approaching any decision involving media buying, it’s essential for marketers to understand the risk, reward, cost, and value of different types of programmatic media buying. When compared with the other types of programmatic, PG solves almost all the associated brand safety, ad waste, and transparency issues.
PG couples the opportunities of data and the efficiencies of automation with the safety, premium products, priority placements and collaborations with publishers that enable a brand to make real connections with its audiences.