What is Programmatic Direct?

Publift
January 19, 2021

Programmatic is the king of the field of ad buying and digital advertising. Analyses and forecasts from eMarketer show that, for the U.S. industry, commercial advertising investment currently stands at 84.5 percent programmatically in 2020 and could grow to 86.5 percent by 2021.

What is Programmatic Direct?

There is no broad market agreement as to the meaning of the term, but it is quite reasonable to assume that programmatic translates to the use of different software, algorithms and user information to rapidly and effectively streamline the process of purchasing and selling online ads.

Programmatic is a philosophy that runs contrary to conventional manual placement orders, where advertisers can approach publishers directly to buy ad space, digital and otherwise. Another name for this is manual media buying or programmatic media buying.

What is a programmatic direct deal?

For a programmatic direct deal, the ad company accepts an offer from the publisher directly to buy the inventory at an agreed price for a predetermined amount of time. A programmatic direct deal allows marketers to make direct deals and get secured ad views by showing advertisements on major publishers’ websites, such as the home page or landing page.

All stakeholders will sit together to negotiate on a set CPM and complete the ad buying process for a programmatic ad at a fixed price. Direct deals are a perfect way for a publisher to market their quality inventory to potential customers only. And for premium publishers, their advertisements may target a particular demographic by buying inventories that deliver guaranteed impressions.

A guide to programmatic deal types

Manual/ Direct Purchasing vs. Programmatic Media Buying

What is manual media buying or direct purchasing?

In the early days of internet ads, the conventional method of manual media procurement involved setting up promotions and creatives and installing them on the advertiser’s ad server. Ad codes were submitted to the publisher via email.

The Ad Ops staff on the publisher’s side put the codes on the publisher’s ad server and began the campaign.

What were the major downsides of manual media buying?

Manual media buying is fairly expensive, provides minimal scalability, and does not encourage advertisers or publishers to evaluate and easily modify their strategies on the go.

This is because all the changes to the advertisement had to go into the online advertisement operations of the retailer which require a number of time-consuming manual changes to be made to the ad system. These shortfalls with the purchasing of manual media have contributed to the advent of programmatic media purchasing.

What is programmatic media purchasing in a nutshell?

Programmatic technology was introduced in the 1990s, and while it is a little more complicated, it provided a fully automatic and effective media purchase mechanism. The technology helped both marketers and publishers to eliminate human contact and thus dramatically decreased the time required to establish, execute and optimize advertising campaigns.

An advertiser employs an ad agency to conduct advertisements on its behalf, which contacts the trading desk. To handle the initiative, the trading desk utilizes the demand side platform.

The DSP contributes to an ad exchange that integrates inventory from advertising companies and supply side systems with third party information from the DMP data management portal or data provider.

Any time an ad space is allocated on the publisher’s site, the ad exchange conducts an auction where the DSP bids on the content submitted by the ad network or SSP. If the DSP retains the auction, the advertiser’s ad will be forwarded to the publisher and shown to the user.

Key differences between manual and programmatic media buying

One of the key distinctions between manual and programmatic media buying processes is the efficiency and flexibility of initiating and changing each advertisement, even though it is already operating. Activities take a long time to execute with manual media purchasing but only take seconds to purchase programmatic content.

Starting a campaign involves signing an insertion order, setting up an advertiser and publisher’s ad server campaign, trafficking codes, etc. Starting the DSP initiative until the developers are ready is a matter of minutes. Any adjustment to the ad ops campaign on the demand side portal is mirrored almost in real time.

The same activities will take hours or days to carry out non-programmatic campaigns. This integration and rapid implementation provided by programmatic advertising purchasing enables advertising agencies to respond rapidly to changes and to make real-time marketing adjustments used to sell counterfeit inventory.

Key differences between manual and programmatic media buying

Types of Programmatic Direct

The word programmatic encompasses a variety of media-purchasing models, including real-time bidding, private marketplace purchases and programmatic direct.

PMP Deals vs. Programmatic Direct

Private marketplace purchasing, which features programmatic guaranteed, programmatic reserved, automatic guaranteed, direct deals and more, is an invitation-only variant of the RTB system. It is an auction procedure in which just a couple of advertisers are vying against each other to purchase a publisher’s inventory.

Generally, this approach is provided by publishers with more premium inventories, such as major media sites. Advertisers investing in such an inventory with programmatic guaranteed can reserve or assure a programmatic ad before being offered by the publisher on the RTB market.

In private marketplace exchanges, there are no intermediaries in the shape of ad exchanges and SSPs, which enable advertisers to more selectively track and choose websites where they want to showcase their ads, but the advantages are, in effect, that mutual publishers get charged maximum price for their inventory, and that advertisers purchasing inventory on a PMP get a incentive in the form of favorable access to publishers.

Unlike typical RTB auctions where advertisers know nothing about ad placement, PMPs offer both advertisers and publishers with disclosure about ad placement and pricing.

The difference between PMP deals and programmatic direct flowchart

Real Time Bidding (RTB) and Programmatic Direct

RTB is the most prevalent way to purchase online content on a programmatic basis, enabling billions of ads to be delivered to Internet consumers on a regular basis. It is an auction-based bidding process in which advertisers negotiate against each other to show advertisements to individual customers.

RTB provides a wide variety of features and data use, a wide range of inventory types, and is widely considered to be the most scalable model on the market. DSPs can incorporate proprietary algorithms for personalized bidding and targeting techniques using AI and machine learning.

Some platforms also offer this possibility to end-customer marketers, for example, by programmable bidders. RTB auctions are entirely automated and are controlled by different auction mechanics, with advertising focused on the basis of user cookies.

Real-time bidding was launched in the late 2000s when ad networks were either facing problems with under-filling or overfilling. This is where RTB originated as a means to monitor the loading pace of the publisher’s inventory by utilizing real-time auctions to exchange unsold inventory and actively manage the demand and supply of publishers.

Real-time bidding and programmatic direct

Benefits of Programmatic Direct for Publishers

Higher Return

Programmatic direct can guarantee that premium ad spaces are filled and advertisers get better rates for their ad inventory relative to the free market.

Improved Monitoring and Insight

When the publisher knows the type of inventory and the demographic that the advertiser is aiming for, they can properly manage costs and value their traffic. It also allows them to calculate sales and estimate more accurately.

Accountability

Counterfeit traffic remains a key concern for the digital advertising sector, and targeted deals tend to relieve the burden of the advertiser.

Publishers often benefit from the useful knowledge that creatives have to satisfy, the amount of impressions required, the categories of viewers, and more.

Publishers still have greater leverage of their ad inventory and it can help them improve their processes.

Drawbacks of Programmatic Direct for Publishers

No Assurance of Complete Filling

While programmatic direct provides many advantages, it does not promise that publishers can sell their entire ad inventory.

Most high-end publishers may have enough interest from customers to sell their entire inventory, but it may not be the case for all. This usually ends in the publisher selling the remaining inventory on ad exchanges.

Requires Full and Direct Ad Server Access

In order to make a direct transaction, the customer will need to have direct access to the publisher’s inventory in any form, such as their ad server, via an API.

Additional collaboration and communication between publishers and advertisers is also required.

Header Bidding

As header bidding progresses to become common in most publisher ad stacks, the benefits of programmatic direct for marketers are being restricted and publishers will not be able to exploit premium ad inventory exposure as they are used to.

How to Get Started with Programmatic Direct

The programmatic direct offer can be achieved in a few taps using Google Ad Manager. In a clear way, the publisher enters into a programmatic direct contract and the customer will approve the terms. All parties should commit to the continuity of the Google Ad Manager Policy.

Here’s how a publisher should set up a programmatic direct buying process.

1. Before you launch, ensure you have an Ad Exchange Account with Google Ad Manager.
2. In Ad Manager, go to Admin, then Global Settings, and then Functions.
3. Switch the Programmatic Direct switch to activate and save the preferences.

Once you’ve allowed direct programmatic, you can implement ad impressions on the open market. Implementing the offer will earn you a name in the marketplace. And the open auction is where you can meet the customers and identify private buyers to make non guaranteed deals for your premium inventory with rights reserved.

Environment allows consumers to recognize the channel, the format of the inventory in which the advertisements will be shown. The choices available for setting the scene are Display, Smartphone App, and Video Streaming.

Points have to be held in mind when configuring the setting, for example, one Ad Exchange account can be connected to one or more settings. However, an environment cannot be connected to several Ad Exchange accounts.

Google Ad Exchange adds a variety of limitations on programmatic transactions. These restrictions are intended to ensure the safety of both preferred sellers and buyers. The easiest way to stop being limited is to follow the Management Guidelines.

Wrap Up

Now that you are aware of Programmatic Direct and its advantages to publishers, make sure you use this program to control the advertising reach and capabilities for your business.

Calculate your potential