There are four key areas of focus for publishers eager to make the most of the $9bn a year programmatic media buying space, but few are currently doing so with great success, according to a report from the Boston Consulting Group.
The outfit, which researched the programmatic strategies of 25 publishers from across the globe when producing the report, recently published the study with Dominic Field, a partner at the Boston Consulting Group, claiming only a tiny minority are making the most of the opportunity posed by the technology at present.
The report - named ‘The Programmatic Path to Profit for Publishers’ – identified the following key areas for publishers to concentrate on when it comes to focusing further on programmatic media trading: staffing; technology; trading models; and implementing a coherent, data-driven, cross-channel strategy.
Programmatic no longer ‘a choice’
Field told The Drum that earlier fears over the disruption posed by ad tech were now largely a thing of the past among publishers, many of whom had been wary of how its emergence would challenge their earlier business models of trading media manually.
However, the vast majority of publishers have yet to get it right, with roughly one-in-ten harmonising their earlier direct-selling strategies, along with their newly employed programmatic trading models, according to Field.
Few getting it right
He told The Drum that three of the 25 publishers participating in the study were making the most of the technology, while the rest are still in a state of transition, and how the migration from direct to automated media trading was largely driven by the buy-side of the industry.
“Compared to 12 months ago, most publishers see programmatic as an opportunity, not a threat. We’ve moved beyond the stage where publishers see it as a choice,” he said.
Field went on to explain that the difficulties experienced by those publishers still in a state of transition include: convincing senior management to fully embrace new technologies; finding the right staff; plus devising a new operational model that integrates their old and new ways of selling ad space.
“Getting the blend between direct, and programmatic media selling is difficult to do. The more enlightened ones are developing a data-driven, cross channel strategy,” he said. This enables them to decide when it is best to sell their ad space directly (i.e. using a salesperson to trade directly with a buyer) or using programmatic trading (which involves little face-to-face interaction between the buyer and seller) in real-time, according to Field.
Boston Consultancy Group also claims that publisher’s growth in programmatic revenue is outpacing traditional direct sales, with programmatic advertising set to overtake direct sales globally between 2017 and 2019, when the programmatic media trading model is expected to hit $30bn per year.
Key areas of focus
Boston Consulting Group advises publishers to focus on four key areas in order to make programmatic media-buying significantly contribute to their revenue:
- Develop a data-driven strategy: Analyse audience’s behavioural patterns, on both desktop and mobile, plus advertisers’ bidding patterns to optimise advertising inventory for maximum return
- Trading models: Glean insights from behavioural data to segment audiences, and then attempt to pair them with suitable advertisers using a variety of trading models, such as open auctions, or more closed methods, such as private marketplaces with selected buyers, or agreeing prices upfront using programmatic direct.
- Technology: Decide which ad tech vendor (or vendors) best suit your strategy. This can include choosing one ad tech vendor to execute all aspects of your programmatic offering, or choosing multiple vendors to perform specific tasks.
- Staffing: Recruit the appropriate staff to devise and execute a programmatic media trading strategy, plus align it with existing elements of the business in order to achieve the maximum amount of value from the audience. This often requires the introduction of new skill sets, such as data scientists, and software engineers.
The report was commissioned by Google, with data input sourced from Magna Global’s forecasts, a full copy of the report can be downloaded here.