The online ad space is increasingly intricate, with new platforms for buying and selling ad space emerging every day. Programmatic is the king of the field when it comes to ad buying and digital advertising.
Analyses and forecasts from eMarketer show that US advertisers spent 41.2% more year on year on programmatic display ads in 2021—the most significant annual increase since 2016.
Programmatic advertising is most commonly associated with the use of buy- and sell-side software to automate ad space deals. While this approach has come to dominate the digital marketing landscape, it does not fit every scenario.
Publishers that want to sell premium ad inventory can use programmatic direct to secure a higher price.
What is Programmatic Direct? [Definition]
Programmatic direct is an aspect of programmatic advertising that involves a direct deal between an advertiser and a publisher, without involving exchange parties. In Programmatic direct, advertisers approach publishers directly to buy ad space.
The most significant benefit of programmatic direct is that advertisers can display ads on a publisher’s top web pages, ensuring the best audience reach, but do so without manually configuring the ads. With programmatic direct, advertisers and publishers can also negotiate on a fixed CPM.
Programmatic direct deals can be categorized into one of two types:
- Preferred: This is one-to-one trading where the price is specified, and volume is not fixed.
- Programmatic Guaranteed: It consists of one-to-one trading where the price is specified and the volumes are guaranteed.
Let's say a top e-learning website has ad space on its site and it decides to enter an agreement with a bookseller.
Either a preferred or programmatic guaranteed deal would suit both, as the publisher receives ads tailored to its audience while the advertiser can guarantee a certain number of impressions. It’s a win-win for both sides.
Table of contents:
• Wrap Up
How is Programmatic Direct Different from Other Programmatic Advertising Formats?
Programmatic direct is more of a traditional method, where advertisers directly engage with publishers to strike a deal.
Let's take a closer look at how programmatic direct differs from the other forms of programmatic advertising.
Real-Time Bidding (RTB) vs. Programmatic Direct
This is the most common form of programmatic advertising and is also considered to be the most flexible model in the market. It is an auction-based bidding protocol where publishers showcase their ad space and advertisers place their bids in real-time. The one with the highest bid wins the ad space.
Private Marketplace (PMP) vs. Programmatic Direct
There are no middlemen involved, which allows advertisers to look at all the options and carefully select the websites where they want to display the ads.
Major publishers—such as The New York Times or Forbes—typically offer this method to sell their premium inventory.
Programmatic direct, which covers non-auction based deals, offers more control for both sides.
Direct programmatic deals offer guaranteed CPM and impressions for a fixed price and duration. Moreover, programmatic direct simplifies sales as it occurs in a single system.
Programmatic direct is perfect for publishers looking for greater control over their inventory. In addition, it gives advertisers direct control over ad sales on premium pages.
Benefits of Programmatic Direct for Publishers
Programmatic direct deals can guarantee that premium ad spaces are filled and publishers get better rates for their ad inventory relative to the free market.
Improved Monitoring and Insight
With direct deals, the publisher knows the type of inventory and the demographic that the advertiser is aiming for, they can properly manage costs and value of their traffic. It also allows them to calculate sales and estimate more accurately.
Counterfeit traffic remains a key concern for the digital advertising industry, and targeted deals tend to relieve some of the associated security burden.
Publishers can benefit from knowing the ad creatives, the amount of impressions required, viewer categories, and more.
Publishers have greater leverage over their ad inventory and this 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.
As header bidding becomes more common in most publisher ad stacks, the benefits of programmatic direct for marketers are becoming restricted and publishers will not be able to exploit premium ad inventory exposure to the extent they are used to.
How to Get Started with Programmatic Direct
Programmatic direct offers can be made with just a few clicks in Google Ad Manager. The publisher enters into a programmatic direct contract and the customer will approve the terms. All parties should commit to adhering to the Google Ad Manager Policy.
Here are steps needed to set up your programmatic direct campaign in Google Ad Manager:
Step 1: Enable and Configure Programmatic Direct
Login to your Ad Manager Account. If you don't have one, create it before starting.
- Go to Google Ad Manager > Admin > Global Settings > Features.
- Turn on the Programmatic Direct by sliding the toggle.
- Save the settings.
Once programmatic direct has been turned on, it cannot be turned off.
Once enabled, the next step is to configure programmatic direct.
Launching a preferred deal allows you to identify and invite private buyers to participate in non-guaranteed deals for your premium inventory with rights reserved.
Step 2: Configure Environment for Campaigns
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.
There are some points to bear 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 multiple Ad Exchange accounts.
Also, familiarize yourself with the Google Ad Exchange restrictions before creating the environment. 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.
Now that you are aware of Programmatic Direct and its advantages to publishers, make sure you use it to control your business' advertising reach and capabilities.
Major media sites with a highly engaged audience and a sizeable volume of ad impressions can lock in direct deals with preferred brands. As a result, you can have your premium ad inventory filled with premium ads, driving an increase in profitability.
If you are a smaller publisher, a programmatic direct deal might not be the best option for you and auctions from ad exchanges or ad networks such as Adsense may be more suitable.
Just remember that programmatic direct still plays an essential role despite some prevailing challenges. It’s little wonder that it has become the most preferred programmatic selling method for publishers.
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.
If you’re making more than $2,000 in monthly ad revenue, contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.