With programmatic ad spending in the US due to reach $115 billion in 2022, publishers and website owners selling ad space should be looking to leverage this technology.
When it comes to programmatic digital advertising, there are several different types of programmatic deals that can be employed.
These include open auctions, private auctions, preferred deals, programmatic direct, and perhaps the most lucrative of them all, programmatic guaranteed.
This article covers the ins and outs of programmatic guaranteed deals, including the benefits to publishers and how they can get started.
Table of contents:
What Is Programmatic Guaranteed? [Definition]
A programmatic guaranteed deal is where advertisers negotiate to buy ad inventory directly from the publisher, without becoming bogged down in manual processes, such as exchanging tags and troubleshooting discrepancies.
The buyer agrees to purchase a fixed number of impressions, with publishers agreeing to deliver that exact number of impressions at a fixed price.
Both the publisher (seller) and the buyer bring a guarantee to the table in this transaction, hence the term for the arrangement.
As independent tech consultant Paul Gubbins states:
“Programmatic guaranteed is a new model that enables a programmatic buyer to device ID or cookie match an audience with a publisher and pre-agree to buy at a fixed price so long as the publisher sends the correct ID on their bid request via supply-side platform or exchange.”
Guaranteed deals work by allowing agencies to sync their data management platform (DMP) to a publisher DMP to match with an appropriate target audience. It enables ad buyers to access specific publisher audiences on a larger, more automated scale than that offered by private marketplaces.
This can greatly benefit an advertiser looking to protect their brand safety, as they have more control over where their ads are displayed.
Media buyers and premium publishers alike are increasingly favoring programmatic guaranteed deals. Around 58% of all display advertising purchased programmatically in the US in 2018 was done through a programmatic guaranteed deal.
In Australia, meanwhile, programmatic guaranteed’s share of total programmatic spend reached 13% in 2021, up from 11% in 2020, according to a report from IAB Australia.
Also Read: DMP vs DSP: What is the Difference?
How Did Programmatic Guaranteed Evolve?
Programmatic deals have revolutionized online advertising over the years. However, programmatic guaranteed is comparatively a new programmatic method, only having been introduced in 2015.
Early Days and Real-Time Bidding
Real-time bidding (RTB) was a revolutionary approach to online advertising when it was first introduced. However, its failure to ensure guaranteed cost and impressions and data security issues in the open marketplace has been a concern among ad buyers.
The private auction was introduced to solve some issues of ad buyers. With the introduction of the private marketplace, this method proved effective in making the process more secure. Yet it failed to guarantee the desired price for advertisers.
Programmatic direct was introduced to allow buyers and sellers to communicate directly and strike a deal based on predetermined impressions and pricing. Programmatic guaranteed is a branch of programmatic direct along with preferred deals.
It's safe to say programmatic guaranteed evolved as a result of advertisers looking for new ways to make the process more equitable.
How Is Programmatic Guaranteed Different From Other Programmatic Deals?
A programmatic guaranteed deal’s biggest differentiator is the fact that it is characterized by concrete specifics.
While other forms of programmatic deals have some degree of uncertainty — from hundreds of bidders in open RTB auctions to non-guaranteed volumes in preferred deals — programmatic guaranteed has both a fixed price and guaranteed volumes.
What Are the Benefits of Programmatic Guaranteed?
There is no doubt that the digital revolution has changed the face of advertising forever.
The rise of ad tech means advertisers can now deliver relevant ads to consumers while tracking their responses in real-time. These analytics can then be used to inform future campaign details and further hone in on the target audience.
However, programmatic advertising is by no means perfect. While real-time bidding systems have a high efficiency when it comes to delivering relevant ads, publishers and advertisers have little control over each individual ad unit.
Moreover, traditional direct-reservation-based orders, while they are great at ensuring only ads from select brands appear on premium publisher’s sites, are costly and time-consuming.
Further to this, with over 40 manual steps required to set up a reservation-based order, these orders are susceptible to human error.
Programmatic guaranteed deals aim to combine the best of these approaches while mitigating the associated drawbacks.
A 2018 study from Google found that programmatic guaranteed deals took 57% less time for publishers to set up and manage than traditional direct ads.
Programmatic Guaranteed has partly evolved due to publishers’ frustration with private marketplaces.
Programmatic Guaranteed's Benefits for Publishers
While getting started with programmatic guaranteed deals can take some extra effort for publishers- they will need to take time building connections and relationships—ultimately, the effort is worth it, with programmatic guaranteed delivering predictable revenue and a reduction in the time and effort necessary to sell ad inventory.
This is due to several factors.
Firstly, once the initial setup phase is complete, programmatic guaranteed deals are remarkably efficient. There is no need to create insertion orders, scan them, manually enter data, correct errors, generate confirmation reports, or chase down invoices.
Programmatic guaranteed deals are also financially efficient. While most reservation deals payout after 60 or 9o days, these deals payout on a 30-day basis.
Programmatic guaranteed deals also increase revenue for publishers. They reduce overheads by streamlining payment while offering publishers access to advertisers who are usually happy to pay a premium for high ad inventory volumes and refined audience targeting.
Programmatic Guaranteed's Benefits for Advertisers
Safety and transparency are some of the most crucial concerns for advertisers today. As programmatic guaranteed alleviates data safety and transparency concerns, advertisers or buyers can benefit from it in a number of ways.
With programmatic guaranteed, advertisers have access to premium inventory that is unavailable on open marketplaces. Furthermore, offering guaranteed impressions removes the need for a buyer to submit bids.
Programmatic guaranteed also allows advertisers to know exactly where their advertising will appear. In other words, they can select the publishing sites.
Some other benefits of programmatic guaranteed are:
Improved ad revenue. Programmatic guaranteed offers buyers ad inventory that is accompanied by first-party data, paving the way for more effective marketing strategies.
Greater efficiency. Streamlined ad trafficking eliminates the need for copy/pasting tags and issuing insertion orders, thereby saving advertiser’s time and money. Programmatic guaranteed ad buys also ensure you won't be handling multiple invoices or worrying about the number of impressions.
Publishers looking to get started with programmatic guaranteed deals first need to negotiate a one-on-one agreement directly with an ad buyer.
This can be done in a variety of ways, including through Google Ad Manager.
Before getting the ball rolling, there are several factors publishers should consider to get the most out of their guaranteed deal.
Analyze Your Workflow
Firstly, consider your current workflow. How many people in your business are currently involved in rolling out your ad campaigns?
Research shows programmatic transactions can reduce the time spent on these tasks by 30% to 60%. Think about how this will affect your bottom line and where you will redeploy these resources.
Consider the Financial Advantages
Think about how the 30-day payment reconciliation will benefit your business. How can this money be re-invested to benefit both you, the advertiser, and the consumer?
Assess Your Team
Before you launch into a guaranteed ad campaign, it is vital to ensure you have the necessary in-house support. A typical website publisher will have the majority of its sales staff assigned to traditional deals, so they may need to upskill in order to feel confident running a guaranteed account.
Automation in the ad tech industry is on the rise, with no sign of slowing down.
Programmatic guaranteed deals offer an excellent opportunity for publishers to increase their ad revenue, build better relationships with advertisers and buyers, and ultimately save valuable time, resources and money.
Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% uplift in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.
Contact us today to learn more about how Publift can help boost your ad revenue and grow your business!