Programmatic – problematic for publishers

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Media bought programmatically, or in an automated way is now unavoidable for most advertising agencies and advertisers. It is also part of the publisher’s landscape to some extent. Are there only benefits to programmatic buying? No, there are actually quite a few serious problems that face publishers specifically.

Benefits of programmatic media

There are a great many benefits to programmatic media buying. The enormous time economy, greater control on bought ad inventory, being able to start and stop a campaign when you wish are but three from the buyer’s perspective.

For the publisher, there are also a few benefits. You can gain access to ad revenue you might not have been able to tap into before. There is also a economy of time and manual labor (supposedly) when ads are automatically fed through your adserver. This leads to less need of sales reps, which in turn costs human resource and representation costs.

However, there are a few problems or drawbacks that are caused by programmatic media for the publisher.

Problems with programmatic media

programmatic problems US publishers 201509For the publisher, programmatic ad revenues are predominantly achieved at very low CPMs, which ultimately isn’t very profitable.

eMarketer recently published a study by Operative and MediaPost on this subject. It is titled “The Profitable Publisher : The future of publishing in digital “. eMarketer’s article presents mostly the challenges facing publishers in a programmatic world.

On top of low CPMs and week programmatic ad revenues generated, manual labor isn’t lessened in any way by automation. Display advertising’s major challenges are equally important to programmatic: viewability and ad fraud.

Operative’s study revealed a few other major challenges for publishers and broadcasters:

  • TV’s audience is migrating too rapidly to digital for broadcasters to keep up (content offer-wise and technologically).
  • Print publishers (daily and weekly newspapers as well as magazines) must not only adapt to the digital world (has been a must for them now for over 10 years) but also to a world where consumers prioritize video content above text and pictures.
  • Sales teams’ education and training on the complete digital ecosystem (not just what their offline competitors are doing) is a huge priority for all media operators on and offline as Facebook and Google take over the lion’s share of digital ad spend.
    • Understanding that your client’s ad dollars could just as well go digitally elsewhere or be reallocated to owned tactics managed by the brand or its agency force media sales reps to gain knowledge of the full spectrum of digital possibilities from the brand’s point of view.
    • Also, multiplatform media sales make this full understanding a must.
  • Ad Tech and MarTech adoption, event when not fully understood, is another huge challenge for media operators.

operative ad tech solutions 201510

  • Programmatic actually generates a lot of HR needs contrary to what automation is supposed to do.

Operative’s white paper presents 3 conclusions, or rather 3 predictions for the future of digital publishing:

  1. Programmatic ad inventory will split into 2 categories (A- RTB including its black sheep fraud and viewability and audience quality, and B- Programmatic Direct), allowing for CPMs to increase.
  2. Content publishers will increasingly yield their ad inventory to larger media operators (Facebook, Google and others)
  3. Major consolidation will take place among various types of content publishers (magazine, radio, TV, newspaper and digital).

I would repeat another prediction which hasn’t started to pan out: consolidation among marketing technology and advertising technology vendors.

Are there any other major pain points missed by this study?

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