Extremes of Programmatic Direct Advertising

Todd Garland, founder of BuySellAds, said during his interview on Hack the Entrepreneur around 15:41 minute:

“What we’ve been doing since 2008, as you can guess by the name of our company, is buying and selling ads.  More recently, maybe within the last year and a half, within the programmatic advertising space in general, exactly what we do has emerged as what is called automated guaranteed.  It’s a form of programmatic advertising, effectively.

This got me thinking… since I have always thought of dynamic ads as the opposite of direct sales, which were traditionally monthly static ads in BuySellAds.  Where do they cross over?

When searching for automated guaranteed, I stumbled across “The Move to Automated Guranteed in 2015” by the SRDS team.  According to this, they also agree that automated guaranteed is a form of programmatic advertising as well!  This is super confusing for me, since BuySellAds and direct ad sale marketplaces are real attractive for small publishers because of the generously priced monthly display ads, which is completely static for one month.  However, they also sell the CPM direct ads…

I could see how they are using CPM rotational display ads could be considered programmatic.  Suppose that CPM is the only thing that is sold for that ad zone on the publisher’s site, in a rotational display ad.  Technically, this is flexible enough to work in programmatic.

This can be sold in one of two ways: the waterfall and the header bidding.

The Waterfall:

Publishers sell their best inventory to their most prized advertisers, and the networks and exchanges get the left overs.  This is the best way to do it for relationship building purposes.  You want to keep the Advertisers that you work best with the happiest.  Same goes for quality ad exchanges with a hand-picked feel.  The Publisher loves when the Ads fit right in with the content and have that certain “we’re here for you” vibe.

On the other hand, it’s really unfair.  Why give special treatment to one advertiser or advertising technology over the other?  Why not let them hash it out in a real time bidding strategy?  The victor will emerge, and they will be your new best friend.

From AdExchanger: The Programmatic Waterfall Mystery

Header Bidding:

Using Real Time Bidding (RTB), an ad is displayed once the ad exchange service determines if it can provide an ad with a higher return from other CPM display networks.  If it can, the ad exchange wins and displays an ad from an advertising network.  If not, then the directly sold CPM’s are displayed.

More on Header Bidding: The Rise of Header Bidding and the End of the Publisher Waterfall

This severely irks me.  As the Publisher, you are tainting your relationship with the Advertiser in the marketplace selling automated guaranteed.  You sold them your table scraps.  Essentially, the Advertiser has to take your leftover traffic and hope its good enough to serve their needs effectively.  It’s so one sided!  It only favors the Publisher.  It screws the direct Advertiser and forces the Ad Exchange to perform.

Conclusion:

I’m not a big fan of combining the two methods of advertising where there is only one victor.  This got me thinking… how can the Publisher and the Advertiser win?  Suppose if the Advertiser knew exactly what kind of traffic was leftover… and it was still good… that might work.  This could really work if the Ad Exchange and the direct Advertiser were able to split things up ahead of time… hmm… like in a social network setting… hmmm….?

That’s not how the world works.

But it should…

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