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Premium vs. Programmatic Ad Sales: Can Both Coexist…and Survive?

  |  December 11, 2012   |  Comments

A look at where the future of online media buying is going.

I recently saw two articles published almost simultaneously by one publication and the juxtaposition of their headlines caught my attention. The first, "The Life (And Mostly) Death Of Premium Web Advertising" and second, "Marketers Still Prefer Premium Content Publishers vs. Social Media, Programmatic Trading" emphasized what I see as the conflict going on in the world of digital media planning today. The second article summarized the findings of a recent survey by the Online Publishers Association and Advertiser Perceptions Inc. of "250 marketers and agency professionals involved with brand-focused image advertising," i.e., Madison Avenue. Based on my experience, the application of these findings applies to other sizes and forms of advertisers as well.

OPA Findings

For perspective, here are the top-line findings of the OPA/API survey:

  • Premium content publishers outpace Facebook for brand safety (71 percent vs. 36 percent); having the best branding creative (64 percent vs. 26 percent); audience attention (63 percent vs. 29 percent); and viewable ads (59 percent vs. 42 percent).
  • Brands value brands: 61 percent of respondents believe that premium content publishers provide the best media for brand quality and image (vs. 20 percent on social media); for providing the most relevant content or context for branding campaign, 48 percent believe in premium publishers compared to only 23 percent in social media.
  • Premium publishers also outpaced programmatic buys in categories of achieving performance objectives, targeting, and reaching particular audience segments

Perception Is Reality

In my mind, the issue is not whether or not the above findings mean that premium publishers truly out-perform or provide greater value than programmatic buying; the issue is what do media planners believe? And therein lies the adoption curve hurdle.

That said, I reached out to both sides of the aisle - premium publishers and ad exchanges alike - to get their perspective on the matter. I also contacted portals that sell on both sides of the fence. I posed the same questions to each, asking about their views on inventory demand and the types of inventory, the roles premium vs. programmatic inventory will have going forward, the definition and ratio of premium inventory currently in exchanges, the strategy of using premium vs. programmatic purchased inventory in a media plan, and which type of ad buy will be the ultimate champion in meeting advertisers' needs in the long run.

Is Silence Telling?

Perhaps they didn't want to "go there" or perhaps they didn't have anything to add to what's already been placed out there by the OPA, but I didn't hear back from any of the premium publishers I contacted. On the other hand, I did hear back from several exchanges.

Google, the world's largest ad exchange, thinks of "programmatic buying and direct sales as two sides of the same coin, not as separate efforts," says Scott Spencer, product management director. Google is, however, "increasingly seeing the 'pipes' of programmatic buying being used by big publishers to conduct their direct buys," and a doubling of buyers and sellers on their own exchange in the last year. Citing eMarketer's latest predictions for U.S. real-time programmatic buys to increase by over 72 percent in 2013, Google's Spencer says the prediction "matches what we're seeing in our own business, in that we're seeing more spend from large, brand advertisers."

emarketer-rtb-11-2012

Adrian Tompsett, VP of business development for DataXu, expressed that defining "premium" is a loaded question as "premium" can be defined as what matches the demands of the advertiser's objective. He believes that long-term, "all media will be bought programmatically" but "this does not mean that sales people will go away or that custom sponsorships are over. Both stay the course and have their place in this new world."

Jason Fairchild, chief revenue officer of OpenX, states that the "premium inventory in their exchange commands the same range of CPM prices that publishers achieve through their direct sales. As better ways of leveraging data are realized, so too will programmatic buying adapt - the more diverse the advertiser need becomes, the more the publisher can help provide this inventory to the seller. Exchanges will thus become even more powerful. We're seeing this at the moment with viewability - advertisers are beginning to ask for it, exchanges are learning how to define and enable the selling of it."

Where do you see the future of online media buying going? Do you think there will be a time you never go direct and if so, why? Please share your thoughts.

Open Hands image on home page via Shutterstock.

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ABOUT THE AUTHOR

Hollis Thomases

A ClickZ expert columnist since 2005, Hollis Thomases (@hollisthomases) is president and founder of Maryland-based WebAdvantage.net, an online marketing company that provides results-centric, strategic Internet marketing services, including online media planning, SEO, PPC campaign management, social media marketing, and Internet consulting. Author of Twitter Marketing: An Hour a Day and an award-winning entrepreneur, Hollis is the Maryland 2007 SBA Small Business Person of the Year. Hollis speaks extensively on online marketing, having presented for ClickZ, the American Marketing Association, SES, The Newsletter and Electronic Publishers Association, The Kelsey Group, and the Vocus Worldwide User Forum. WebAdvantage.net's client list has included Nokia USA, Nature Made Vitamins, Johns Hopkins University, ENDO Pharmaceuticals, K'NEX Construction Toys, and Visit Baltimore. The agency was recognized as a "Small Giant" by the Greater Baltimore Tech Council and was chosen as a "Best Place for Business Women to Work" by "Smart Woman Magazine."

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