Starting a Programmatic Business

Publishers are quickly adopting programmatic advertising to accelerate revenue and gain operational efficiencies.

From a revenue standpoint, publishers are responding to a massive shift in media buying preferences as media buyers are moving more and more budget to programmatic buying due to its superior targeting and retargeting capabilities. From an operational standpoint, programmatic allows publishers to efficiently manage business complexities as well as simplify ad operations and their advertising technology stack.

Programmatic describes a set of markets that leverage real-time transactions between the publisher and media buyer. The transactions that occur within those markets can be competitive auctions (enabled by real-time bidding) and/or a buy transaction as might be seen in programmatic direct markets. We present the differing types of markets in the exhibit below, whether the market is exclusive or competitive, the types of rules that are typically in place, and the type of transactions used to conduct the trade.

Driving Efficiencies

Programmatic markets are not only a way to drive revenue; they can reduce internal ad tech costs and complexity. Programmatic markets enable you to transition the range of ad network relationships to participate via private or open exchanges. They also help optimize your yield across these buyers. It doesn’t matter whether you bring your own tags to AOL or we deploy our own tags. The result is that publishers enhance the strength of demand for their inventory with a single integration.

ONE by AOL: Mobile

Market Exclusivity Transaction
Programmatic Direct Facilitates one-to-one direct relationship between a publisher and agency or advertiser Pre-negotiated, fixed CPM
Private Marketplace Designated inventory available to select buyers Pre-negotiated, fixed CPM or Competitive auction
RTB  Open exchange Competitive auction
Mediation Open to all ad networks or other buyers that buy via static connections Dynamic Allocation

Put all or some programmatic markets in place, depending on your revenue strategy and preferences.

Programmatic Direct

Programmatic Direct supports the direct relationship between the publisher and an advertiser or ad agency. In some cases Programmatic Direct deals are put in place against certain types of inventory; and it is often the only way specific advertisers or agencies with make transactions. Typically, your direct sales team makes the deal, the elements of the deal are codified in a Deal ID, which technically describes the deal, and the advertiser or agency buys programmatically based on the terms of the Deal ID.

Private Marketplace

Publishers may engage Private Marketplaces to sell to selected buyers. Typically, the publisher would implement specific types of rules (price floors, brand rules, etc.) that differ from the rules used in public exchanges. A Private Marketplace can act like spot markets, stood up for short periods of times, such as to support a specific type of event (e.g. sports event) or can exist for long periods of time and generally perform as a key way to sell to specific media buyers. A feature unique to ONE by AOL: Mobile is our ability to rollover unsold impressions from your Private Marketplace to the open exchange. In this model, you can strip out some data or channelize the inventory (make semi-transparent) and sell at a different price point on the open exchange to maximize revenue.

RTB and Mediation

To maximize demand, most publishers sell on the open exchange–via RTB and mediation. On the open exchange, Publishers can put in place different ad quality rules, price floors, ad placement rules, etc. These rules should be optimized to both protect your interests and accelerate revenue.

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