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Direct Sales vs. Programmatic Sales


Direct sales and programmatic sales are often discussed as competing functions within the publisher business model. However, the two channels are distinct enough that they should not compete with each other. In fact, the most successful publishers we work with from a revenue standpoint have a strong aptitude for managing direct and programmatic sales alongside one another. In order to do so most effectively, it is important to understand the distinctions. Specifically, the following five points cover some of the things that publishers can offer advertisers through direct sales that they cannot get through programmatic channels:

  • The guarantee/sponsorship/future: Advertisers want the guarantee of being placed next to premium content, above the fold, in front of a guaranteed set of eyeballs, for a specific period of time, at a set rate. Further, media buyers are tasked with spending 100% of their budgets for fear they are reduced next quarter because they didn’t spend enough. Without a guarantee in place with publishers, their media spend is at risk of (a) not being spent or (b) being spent in less than ideal context at the end of a fiscal period. Programmatic buying technology like real-time bidding (RTB) provides advertisers/media buyers no guarantee on price, contextual placement, or impression volume.
  • Site takeovers and other non-standard ad units: A site takeover or “skin” is very visible to a reader, generates high CTRs, and creates brand awareness. Because of this, takeovers have very high CPM rates and cannot easily be bought or sold on an exchange due to the infinite ways for designing and architecting a site. Likewise, ad units that are not standard IAB sizes (160×600, 300×250, 728×90) can and should be integrated into the unique design and architecture of a site, and sold for premium prices.
  • Banners integrated with content: Below is a banner from Miller Light from my fantasy football league that has been creatively integrated with content. This banner shows the score of the fantasy game each week and allows fantasy players to “Smack Talk.” This must have been an expensive campaign due to the way it is integrated into the site. The more integrated the advertisement is into the content of the site, the less the chance that an algorithm can decide the price programmatically.
  • The leading edge of media technology: While there are emerging exchanges for both video and mobile inventory, nothing yet exists that is as efficient as the market for standard IAB display banners. Publishers can much more easily package and directly sell media like video, audio, mobile web, and applications than any exchange currently can. Even as exchanges mature for some of these types of media, there will always be something that is a little newer or more innovative than that which can be quickly commoditized.
  • Conversation: Publishers have their own brand. And in the age of social media, brands need to be a part of the conversation. Blog posts, comments, and tweets are where this conversation lives in a public forum. The influence of a publisher’s brand within the conversation should not be underestimated—marketers are willing to pay a lot for it. This is something that our sister company, Federated Media Publishing, is pioneering across the Independent Web.

So why in the world would advertisers ever buy programmatically? It comes down to one thing: audience data. I will delve deeper into this subject in my next post and explore some ways publishers can manage their programmatic channels more effectively. Again, the better a publisher is at understanding the distinctions between programmatic and direct, the better the two channels can compliment each other, working together to maximize inventory value and revenue.

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