The Case for a New Type of Premium Programmatic

  |  March 31, 2014   |  Comments

Premium programmatic brings enormous amounts of opportunity for advertisers, and could have a large effect on the search marketing ecosystem.

Advertisers know that when it comes to programmatic, there is opportunity to be had. And why wouldn't there be? By using machine learning and real-time bidding (RTB), publishers and advertisers are buying and selling ad space more efficiently, at record levels. eMarketer estimates that programmatic ad spending will hit $9.8 billion in the U.S. this year!

While programmatic continues to gain momentum, the campaigns that make a real splash are often custom campaigns, where the agency and brand work hand-in-hand with the publisher to map out a specific unit with specific capabilities that truly push the boundaries of standardized formats. These campaigns are often not only time-consuming, but also costly. But what if they didn't have to be? Enter the hybrid: premium programmatic.

Historically, premium advertising encompasses the non-traditional units in the digital ad world: the native units, homepage takeovers, skins, and IAB rising stars. Just think about what Google has done with their sponsored search results, which offers a native format and programmatic placement based on search terms. Unlike traditional programmatic advertising, which often uses mostly remnant publisher inventory, premium programmatic leverages top-tier publishers and pairs it with premium creative formats and data. Here lies an enormous amount of opportunity for advertisers, if premium programmatic can be sold via RTB while holding on to its inherent value. Of course, with opportunity come some roadblocks.

There are three major challenges that stand in the way of offering premium programmatic via RTB. First there is the issue of redefining what makes something premium. Ideally, this should be a combination of three things: the page it is placed on, the unit and ad format itself, and the targeting leveraged to find engaged consumers. Only when we have the highest-quality solution for all three of these categories, should we call it premium.

The second aspect is a larger industry problem, and that involves bringing in brand dollars. In order to consider something as premium, it needs to not only be made using the best technology and live on the best sites, but it also needs to come from the best brands - all of which comes with a higher price tag. Brands need to make a strategic investment and be able to see results of how premium programmatic campaigns increase brand awareness metrics in order to determine the return on investment (ROI).

The last problem is precision targeting at scale. How do we reach a larger-scale audience while keeping our solutions premium? The use of first-party data in conjunction with consumer intent signals means that the most relevant ads are being placed in front of the right consumers at the right moment in time. One source of data that is often overlooked but offers great insight into consumer intent are search habits, which offer clear indicators of what consumers are looking for at a particular moment in time. Combined with the right publishers, this wealth of data can be very effective in completing the path to purchase. With premium programmatic, publishers can better monetize their premium inventory since more buyers will be bidding for their premium "real estate."

Some companies are starting to tackle premium programmatic challenges via native advertising solutions, like Nativo and Sharethrough, while others are developing entirely different types of in-stream ad units and formats. The real winners will be the ones who will enable premium value, increase target ability, and leverage larger-format units via RTB on a large scale. As Paul Bremer mentioned in his "Premium Programmatic" ClickZ article in January, big brands have a number of ad requirements such as brand-safe relevant content, unobtrusive experiences, and smart metrics - none of which can be provided by an algorithm. It will be a tight, but interesting race to the finish to see who can solve these challenges to create a better and more efficient advertising market for brands and publishers.

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Eric Wheeler

Eric is the Chief Executive Officer and co-founder of 33Across, bringing 20 years of experience leading successful Internet businesses to 33Across. Prior to 33Across, he was the CEO of Neo@Ogilvy and Executive Director of Ogilvy Interactive North America. Under his leadership, Ogilvy Interactive's revenue grew five-fold from 2003-2007 working with leading brands including IBM, American Express, TD Ameritrade, Cisco, and Yahoo. Eric was COO of Carat Interactive and co-founder and President/COO of Lot21, the award-winning digital agency that sold to Carat in 2002. Eric's career includes leadership positions at CNET, Young & Rubicam, and Anderson & Lembke in San Francisco. Eric holds a BA in Political Science and Philosophy from Boston University.

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