A Publisher's Guide To Premium Distribution Strategies In The Programmatic Age

chrisstarksellsiderThe Sell Sider” is a column written for the sell side of the digital media community.

Today’s column is written by Chris Stark, senior vice president of product marketing at Grapeshot.

In theory, the promise of the programmatic wave sweeping digital advertising is to make buying more fluid. From the perspective of supply-side businesses, however, programmatic often falls short.

Spot-buying via open auction can be a profitable monetization channel, but in programmatic deal-making, publishers have yet to find a sweet spot around how much inventory should be sold directly or monetized via third-party, supply-side partners.

Sellers feel pressured to segment their inventory into distribution channels, but in the bargain, they lose cohesive control over the whole. When a publisher pushes a fraction of its inventory to a third party, rather than selling via its ad server, buyers receive smaller pools of inventory. Aggregating remnant inventory into bigger pools used to be a value proposition, but the programmatic push for fluidity is at odds with how supply-side players spread their pools across buy-side platforms, often in unequal parts.

What remains is a more complex, clumsy and unsatisfactory channel for deal-making, with an aggregation value proposition that is less clear. Publishers need better alternatives.

For supply-side platforms, fluid sales distribution is the prerequisite offering upon which aggregation can be built. The ideal solution gives publishers better allocation control over 100% of their inventory, allowing them to hand over last-minute placements to spot buys that haven’t been pre-allocated.

The bulk of publisher ad server business has coalesced around the dominant Google with DoubleClick for Publishers (DFP) platform; Google also offers some preliminary dynamic allocation tools between DFP and its programmatic platform, DoubleClick Bid Manager. That link has become more fluid with time, making Google an appealing one-stop distribution channel for publishers. AppNexus, with its Open AdStream acquisition, and OpenX are a few challenger stacks that also offer their own ad servers and the lure of cohesive selling.

The remainder of the programmatic supply-side universe operates without full hooks into the publisher’s ad server. They will face a steep uphill battle to attract enough consolidated publisher inventory against the competitive advantages of the aforementioned players.

If private marketplace deal-making cannot succeed in the current patchwork fabric of buy and sell platforms, many may fall by the wayside as significant programmatic players.

Lacking a publisher ad server, the mandate is differentiation, in order to compete with the one-stop monetization stacks. I see three approaches that show promise.

First, it’s possible to innovate hooks into ad servers without direct integration. DFP is in many senses an API layer; clearly, there could be smart ways to push and pull pricing or other data in a similar fashion by providing plumbing and services to really help publishers shift spending from the open exchange to the private marketplace. This might attract publishers and buyers, and therefore, more publishers.

Second, supply-side platform vendors can build an integrated network consisting of a demand-side platform and supply-side platform. Matching some smart tech with deep and unique publisher data relationships can once again provide differentiated buy-side offerings to attract sustainable advertiser spending. Aggregation of unique, premium inventory is powerful but risky: The benefits to buyers must outweigh the inconvenience of going to yet another supply source to buy.

Finally, lead with services. Managed services can be a difficult road to sustain for differentiation, but without a doubt, convenience still rules the day. A business that saves its customers time and money is always a powerful proposition. A services-heavy programmatic sales house could offer a better experience and custom focus, winning enough publisher business that attracts sustainable demand.

Constant change of the market makes it a challenge to set up win-win arrangements that stand the test of time, particularly considering the longer cycles of strategic positioning, tech development and corporate investment. But if there is a unified strategy from the above approaches, it is the imperative of bringing the publishers back into the deal transaction.

Follow Chris Stark (@chriswstark), Grapeshot (@GrapeshotRTB) and AdExchanger (@adexchanger) on Twitter.

 

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