If the increase in programmatic trading leads to standard ad formats becoming "too commoditised" there’s a risk publishers will ditch them in favour of more content-led advertising, according to Dennis Publishing’s head of digital sales Gary Rayneau.
Although Dennis – which owns brands such as Auto Express, The Week, Men’s Fitness and Computer Active – has been increasing its programmatic capabilities in recent years, the technique currently only represents four per cent of revenue, although direct display advertising still brings in the majority at 70 per cent. The rest comes from native advertising/branded content and partnerships.
While Rayneau said the company would continue to develop its programmatic offering, he said Dennis was “purposely late to market” and currently programmatic trading is only an option for direct-buy clients.
“Our door is definitely open with clients to work programmatically but that has to be in conjunction with direct spend,” he said.
“I think it will become the default way of buying impressions if the focus is direct response, and across the industry it absolutely is and I completely understand the legitimacy of programmatic from that perspective.
“On the other hand I also think direct buys will always have a place, especially for brand-led advertisers and vertical sites. I think programmatic will be the final nail in the coffin for your average network and portfolio sales, but if you’re a publisher with a highly specialised niche audience then there’ll always be a place for direct buys and brand related stuff.”
He continued: “I do see a point where if display advertising becomes too commodotised we’ll get to the stage where we won’t run standard formats and we will just run partnerships and native placements.
“I think it would be a much better experience for the user, and it will generate the same, if not more, revenue that way as well. It just won’t be worth our time to run standard display.”
Rayneau said he believed such an event was a real possibility and pointed towards the Buzzfeed model – which is funded by native advertising – as an example of how other ad revenue streams are practical.
“Buzzfeed is the brand that everyone’s talking about right now; they don’t run display advertising and they’re the next big thing. There are definitely plenty of other ways to make money in this market, you don’t have to just run straightforward advertising, you don’t have to be fully programmatic.”
Dennis is currently working with Google Ad Exchange and has just started working with data firm Lotame. Moving ahead, Rayneau said expanding data capabilities across the business would be a priority, while demand for native advertising services has also increased from clients. As a result, Dennis has just signed a contract with Respond, which will provide the publisher with “off the shelf” native formats that make the service more accessible for smaller clients.
“It’ll just make the barrier of entry to native a lot lower for some clients,” he said. “If you want to do it well, it takes a lot of investment to make sure it’s right.
“We need to be able to offer services that go way beyond out and out advertising. We need to be almost digital consultants for our clients and advise them on campaigns and messaging and how to reach their target market. They definitely need that level of advice now.”
Dennis’s overall revenues are now split “pretty much 50/50” between digital and print, and Rayneau said the publisher’s digital business is “more than offsetting” the decline in print.
The business is moving into a fresh era following the death of founder Felix Dennis in June.