How Automated Advertising Can Help Publishers Cut Out the Ad Tech Middleman
When it comes to automated advertising, publishers and advertisers have just scratched the surface. We have seen, and will continue to see, rapid growth in programmatic advertising and real-time bidding. But while programmatic and RTB have played a critical role in automating the delivery functions of media buying, both tools represent a narrow slice of the expanded role automation will soon play.
So what do we mean by automated advertising outside the context of programmatic and RTB? Already, there’s been some definitional confusion. Automated advertising refers to a variety of tools and processes affecting several areas, including data quality and identity resolution, brand safety, user experience, inventory quality, ad effectiveness, and marketing intelligence.
The issue of inventory quality highlights the current need for better automation. Advertisers use automation to judge inventory quality based on their specific KPI’s and performance data, but publishers assess the same inventory differently, often judging quality based on the labor needed to produce the content and the content’s ability to engage audience. The result is a terrible disconnect, where neither buyer nor seller can agree on quality. Here, automation means translating a publisher’s quality assessment into a more holistic matrix of inputs that can be passed along with a bid request in order to better align buyer and seller around a vital marketplace concern.
Of course, inventory quality is just one example. As automation expands in multiple areas at the same time, publishers stand to gain in several ways.
A Streamlined Process
In order to automate, advertisers and publishers must share the same contract trading platform. Not only will a shared platform help buyers and sellers to better align their interests, it will enable a standardized and more streamlined process to emerge.
In the short run, publishers and advertisers will benefit from a more direct relationship—as opposed to contracting through a nebulous chain of media agencies and technology vendors. Ultimately, automation will reduce or eliminate many of the manual, redundant processes that currently bog down the digital media ecosystem. Answering RFPs, for example, becomes a lot less costly and cumbersome for publishers as the process becomes standardized and streamlined. But publishers will also see benefits around campaign optimization and contract reconciliation—two aspects of the buyer-seller relationship that don’t get nearly as much attention as RFPs, but that nevertheless cost publishers time and money.
To the extent that publishers can use automation to streamline the advertising process, they can reallocate their resources elsewhere. Publishers may choose to invest in creating better content, improving user experience, audience development, or developing new advertising products. Obviously, every publisher has specific needs, but freeing up money and resources that were previously allocated to supporting an inefficient system is something that will benefit all publishers.
The lack of transparency is a widespread problem that hurts publishers and advertisers alike. Because of the many third-party technologies involved in delivering a campaign, advertisers don’t always know how their marketing dollars are being spent across various technologies. It is also difficult to track how ads are served across different platforms and what metrics are used to optimize them. Because of this lack of transparency, advertisers are inefficiently allocating marketing spend, and using resources on services that may not drive results instead of spending more marketing dollars with high value partners, like publishers. Here, automation presents an opportunity to build transparency into a new infrastructure.
Already, blockchain technology has revealed and helped eliminate transaction fees, making financial markets more transparent. Blockchain can do the same for the media business by shedding light on the so-called black boxes that are hallmarks of today’s ad tech ecosystem. Increasing transparency around fees will benefit publishers and advertisers alike. But the benefit should be particularly attractive to publishers because as advertisers eliminate middlemen that add little or no value, they will be able to allocate a greater share of their budgets to buying media from publishers. Put simply, as automation delivers transparency, it also delivers greater returns to those who provide real value—namely publishers and their advertisers.
Broader Market Participation
In a people-powered market, it’s very difficult—if not impossible—to manually sort through something like the comScore 1000. Instead, buyers tend to favor big media holding companies because they are known quantities that can provide greater buying power with their size.
Automated advertising levels the playing field because it allows a wider group of publishers to demonstrate audience/inventory availability, contextual relevance, and brand safety in a streamlined, advertiser-friendly process. All media transactions can benefit from such a model, but the benefits are most apparent in direct deals, where publishers can earn higher CPMs and advertisers can expect a higher level of brand safety. As market participation extends to a broader group of publishers, advertisers will be able to identify new, valuable pockets of inventory and audiences that don’t currently exist within the framework of today’s media partnerships.
In the short run, automation offers the tangible benefits of a streamlined process, greater transparency, and broader market participation. Each one of these advances has merit and each will deliver specific benefits to publishers. Over time, automation will also benefit digital publishing more broadly. By allowing publishers to redouble their investments and energy into their core competencies of creating content and building audiences, the overall stature of the industry will rise. Such a halo effect represents an enormous benefit to all digital publishers because it helps the industry as a whole associate itself with a premium experience—something that grows more important each day given the expanding number of channels and platforms advertisers have to choose from.
As Senior Vice President of Strategy and Innovation at NYIAX, Greg brings experience in developing online advertising strategies and tactical initiatives to propel the company’s future growth. Greg has more than 17 years experience in management and strategy. His individual organization and focus on company goals gives him the ability to manage key relationships and execute critical business objectives. Currently, he is a member of the IAB Digital Video Committee and a former member of the IAB Ad Ops Council and Sales Executive Council.