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. Those transactions can be competitive auctions—enabled by real-time bidding—and/or a buy transaction as one would see in programmatic direct markets. These types of markets are presented in the exhibit below. In this exhibit, we name the type of market, 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.
Programmatic markets are not only a way to drive revenue; they can reduce internal ad tech costs and complexity. Programmatic markets enable you to not only transition the range of ad network relationships to participate via private or open exchanges—but to also yield optimize across these buyers. This is possible 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 through a single integration.
ONE by AOL: Mobile
|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|
You can put in place all or some programmatic markets, depending on your revenue strategy and preferences.
Programmatic Direct supports the direct relationship between the publisher and advertiser or agency. In some cases Programmatic Direct deals are put in place against certain types of inventory; in some cases, it is the only way to transact with specific advertisers or agencies. 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.
Publishers stand up Private Marketplaces to sell to selected buyers. Typically, you would implement specific types of rules (price floors, brand rules, etc.) that differ from the public exchange. 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 be 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. Publishers can put in place different ad quality rules, price floors, ad placement rules, etc. on the open exchange. These rules should be optimized to both protect your interests and accelerate revenue.