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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One of the biggest challenges to programmatic adoption is that people are afraid of it.