Programmatic is not without its issues, but there are certainly a number of clear benefits for both the buyer and the publisher.
It's been a long time coming for buyers and sellers to efficiently and directly transact on digital media. However, for the majority of the industry, there is still much room for growth. Fragmentation is rampant, buyers crave simplicity while sellers focus on increasing revenue, and the robots are somehow winning. In response, we are seeing a tremendous amount of noise in the marketplace around the concept of Programmatic Direct.
Programmatic Direct enables a single buyer to transact directly with a single known seller, which sounds great on the surface. However, it is not the panacea we had hoped for. Like DealIDs before it, Programmatic Direct is designed for the publisher to control rates and make discrete high-value inventory available to a single buyer for one campaign. There are certainly a number of clear benefits of Programmatic Direct: buyer confidence in the seller, forecasting available inventory at known pricing, and the ability to execute a campaign quickly without friction. Yet the benefits for publishers are much greater; they can sell packaged media and data together, create a sense of scarcity, enable buyers to transact with a specific seller, and control rates as well as the type of media offered.
But - and it's a big but - the buyer is extremely challenged when it attempts to scale this approach. Buyers leveraging their own audience data on media, buying across multiple publishers, and managing rates for different clients or tactics become all but nearly impossible, and make us feel like we're back in 1999 again. The operational pain associated with Programmatic Direct for the new digital agency or trading desk operating an audience-first model makes any direct-oriented process inefficient.
Most trading desks have turned to the open market in an effort to simplify and scale the buying of digital media, but this is wrought with challenges that make many people very uneasy. Robots, fraud, and risky content are chief concerns. Therefore, most buyers utilize URL whitelists and third parties to protect themselves and their clients from running on the underbelly of the Internet. These protections can limit scale, add operational steps for curating content, and increase costs to the buyer, which isn't ideal for anyone.
At Xaxis, we've taken a unique approach that involves directly partnering with premium, well-known publishers, and acquiring inventory outside of the exchange or SSP. These partnerships enable us to work directly with the source of the media, eliminating risk while ensuring high-quality, transparent revenue. In some ways, this is similar to a Programmatic Direct approach. Xaxis creates an exclusive programmatic set of inventory to be accessed by a set of buyers who understand the importance of quality, brand, and context. While some pervasive issues within programmatic still need to be smoothed out, the direct connection between buyers and sellers is a positive indicator for parties on both sides of digital media.
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Larry Allen is SVP, Global Platform Sales for Xaxis. He has responsibility for overseeing solutions for publishers including Xaxis for Publishers, Xaxis Exchange, and Xaxis Marketplace globally.
Larry has extensive experience in digital media, marketing, and business strategy unmatched by most standards. Prior to joining 24/7 Media (which merged with Xaxis in 2014), he held senior management positions at cutting-edge digital media companies such as AOL, Viewpoint, Unicast, Yieldex, Real Media, and TACODA.
Larry also ran his own consulting business where he advised many major media companies such as The New York Times, Meredith, 33Across, and Business Insider. He is a frequent contributor to a number of trade publications, blogs, and industry conferences.
A graduate of Clarion University of Pennsylvania with a degree in Business Management, Larry is based in Xaxis' headquarters in New York City.
Follow him on Twitter at @lawrenceallen2.
Hong Kong, May 5-6, 2015
Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.
Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.
May 6, 2015
12:00pm ET/9:00am PT