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The online advertising industry has grown exponentially with the rise of technology and digital platforms. Programmatic with its algorithmic and automated systems is a popular method of buying and selling online ads.
Programmatic advertising has become the dominant method of buying digital display ads globally, with a forecasted growth rate of 15.9% in 2024 according to eMarketer. This growth is attributed to the increasing use of data and technology in advertising.
While programmatic has become the go-to method for digital display ads, there are instances where advertisers and publishers prefer to transact directly. We will explore this method, programmatic direct, and its role in the digital advertising landscape.
Programmatic direct is a method of buying and selling digital ads directly between publishers and advertisers using automated technology. This direct transaction eliminates the need for intermediaries such as ad exchanges or supply-side platforms (SSPs).
With programmatic direct, advertisers and publishers can negotiate and agree on a fixed ad inventory price instead of bidding in real-time like traditional programmatic buying. This method is often used for high-value or premium ad placements, offering more control and transparency for both parties.
A one-to-one relationship is at the core of Programmatic Direct. The buying and selling process is similar to traditional programmatic buying but without the involvement of intermediaries.
The process starts with a publisher contacting their preferred advertisers to negotiate a deal for direct ad inventory. The publisher will then create an order using a programmatic direct platform, specifying the deal’s details such as pricing, targeting criteria, and ad placement.
The advertiser will receive the order and can accept, reject, or negotiate the terms. Once both parties agree on the terms, the ad campaign is set up and runs as planned.
Here is an example of how programmatic direct works:
A travel website wants to promote a new package deal on its homepage for a specific time frame. They contact an airline company directly and negotiate a fixed price for this ad placement. The airline company agrees to create an order using a programmatic direct platform.
The order specifies that the ad placement will run for two weeks and only target users who have searched for flights in the past month. The travel website accepts the order, and the ad campaign runs as planned.
Different programmatic direct deals are available to cater to different advertising needs. Advertisers and publishers can choose the deal that best suits their campaign objectives and budget.
Preferred deals, also known as unreserved fixed rates, are agreements where publishers offer a set amount of ad inventory to specific advertisers at a fixed price. These deals are not open to bidding and are often used for premium or high-value ad placements.
Preferred deals offer a level of exclusivity for advertisers, as they have the first choice on ad inventory before it is made available to other buyers. The advertiser is not locked into the deal and can choose to accept or reject it, making it a low-risk option. Preferred deals are also beneficial for publishers, as they can secure a fixed price for their ad inventory and have more control over the advertisers that they work with.
Private auctions are invitation-only auctions where select advertisers are invited to bid on ad inventory at a set price. Unlike preferred deals, private auctions allow for bidding and competition among selected advertisers while offering exclusivity.
Private auctions often have higher bids than open auctions and can result in higher revenues for publishers. Advertisers can also benefit from private auctions as they offer access to premium ad inventory at a lower price than direct buys.
Programmatic guaranteed, also known as programmatic direct or automated guaranteed, is a type of deal where the publisher guarantees a set amount of ad inventory at a fixed price to the advertiser. This type of deal is similar to preferred deals but differs in that it involves a commitment from both parties.
Programmatic guaranteed deals often require more planning and communication between the publisher and advertiser, as they involve a longer-term commitment and a larger amount of inventory. However, this deal offers both parties more control and transparency.
Real-time bidding (RTB) is the traditional method of programmatic buying, where ad inventory is sold in real time through an auction. Programmatic direct, on the other hand, involves a direct transaction between publishers and advertisers without the involvement of an auction or bidding.
While real-time bidding offers more flexibility and faster transaction times, programmatic direct allows for more control, exclusivity, and transparency for both parties. Advertisers can choose the deal that best suits their campaign objectives and budget, while publishers can secure a fixed price for their ad inventory.
Ultimately, both methods have their benefits, and it’s up to advertisers and publishers to decide which works best for their needs. Some may even choose to combine both methods for different campaigns. Overall, programmatic direct offers another layer of flexibility and control in programmatic buying.
As with any advertising method, using programmatic direct has benefits and drawbacks. Here are some pros and cons to help you better understand if this method suits your advertising needs.
With programmatic direct, publishers can secure a fixed price for their ad inventory, resulting in higher revenues than real-time bidding. Advertisers may also see cost savings by locking a set price for their ad placements.
Programmatic direct eliminates manual negotiations and paperwork, resulting in a more efficient buying process for publishers and advertisers. Additionally, programmatic direct offers more transparency as no bidding is involved, making tracking and monitoring ad placements easier.
With programmatic direct, publishers have more control over their ad inventory as they can choose which advertisers to work with and at what price. Advertisers also have more control over their ad placements and can secure premium inventory without the risk of being outbid.
Programmatic direct allows for direct communication and collaboration between publishers and advertisers, which can lead to stronger relationships and more customized deals.
As programmatic direct deals involve a commitment from both parties, limited ad inventory may be available for purchase. This can limit the flexibility of advertisers looking for more diverse ad placements.
Programmatic direct deals require publishers to have specific technical expertise and resources to set up and manage the deals. This may be a barrier for smaller publishers who do not have the means to implement programmatic directly.
Programmatic direct relies heavily on ad servers to manage and deliver ad placements. This means that any technical issues with the ad server can impact the success of programmatic direct deals. Backup plans and communication channels should be established to mitigate the risk of ad server failure.
While programmatic direct can benefit larger, established publishers and advertisers, it is not limited to only them. Smaller publishers and advertisers can also utilize this method with the help of programmatic platforms and technology.
While both methods fall under the umbrella of programmatic buying, they differ in their approach and processes. Programmatic direct involves a commitment from both parties and offers more control, while real-time bidding relies on an auction-based approach.
While programmatic direct deals may require more planning and communication, using programmatic platforms and technology has made the process more efficient. With the right resources and support, it can be a viable option for publishers and advertisers of all sizes.
While programmatic direct is commonly associated with display ads, it can also be used for other formats, such as video and native ads. As long as the ad inventory is available for a fixed price, it can be purchased through programmatic direct deals.
A demand-side platform (DSP) is software used by advertisers to automate the process of buying ad inventory. While DSPs are commonly used for real-time bidding, they can also be used for programmatic direct deals.
VenziMedia DSP is one such platform that offers support for programmatic direct buying. With their technology and expertise, they can help advertisers find premium ad inventory and negotiate deals with publishers. This can save time and resources while offering programmatic direct benefits.
Additionally, DSPs can provide real-time reporting and insights on ad performance, allowing advertisers to make data-driven decisions for their campaigns.
