Rethinking the Role of Programmatic in Your Ad Revenue Strategy
Programmatic advertising continues to expand, exposing publishers to more opportunities to utilize the technology to advance their advertising sales strategy. But some publishers see programmatic technology as cannibalizing their direct channels. Others see it as a remnant solution -- a marketplace to sell unsold inventory.
These narrow views of the technology's use have stunted its potential impact on revenue streams. Programmatic is much more than a residual solution, and can be a tactical means to significantly increasing revenue from ad sales. And while the technology can benefit different publishers in very different ways, it deserves a seat at the table as a valuable contender for selling inventory.
Learning how to use the technology and integrate it into an overall strategy does not have to be an arduous task. It can be simplified by following a clear, straightforward process that allows publishers to develop and ultimately execute a yield optimization strategy that best positions them for success.
Programmatic technology can have a major impact on a publisher's revenue stream, but only when utilized in a way that supports the business' overall ad sales goals. To understand how programmatic can benefit a particular business, it's vital to first define yield.
A publisher's overall yield can be calculated by multiplying its sell through rate by the estimated cost per mille (eCPM). In other words, yield is the amount of inventory a publisher sells out of its available pool times the average cost of an impression. This number, or yield, is the total revenue accumulated from ad sales.
To maximize yield, publishers must implement a yield management strategy that addresses all parts of the equation. This is where programmatic technology plays an important role. Yield management is defined by the Interactive Advertising Bureau as "the process of understanding, anticipating and influencing advertiser and consumer behavior in order to maximize profits through better selling, pricing, packaging and inventory management." Once yield, and then ultimately yield management, is defined, identifying where programmatic adds the most value becomes a much more fluid exercise.