Monetization Tools & Tech

What Is the Difference Between Direct and Programmatic Sales?

sovrnmarketing // May 11, 2016

direct 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 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.

The Pros of Direct Sales

High Viewability
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.

According to the Integral Ad Study Q1 2016 Media Quality Report, direct-sold display ads see nearly 10% higher viewability rates compared to programmatic display ads.

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.

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.

Higher Engagement
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.

The Pros of Programmatic Sales

Deals Are Easily Facilitated
In order to broker direct deals, most publishers have a direct sales team. With programmatic, you don’t need a sales team and can broker the deals quickly and easily.

More Audience Data
Programmatic allows publishers and advertisers alike to benefit from audience data, as programmatic uses cookies.

No Longer Just for Desktop
Gone are the days of programmatic sales only serving desktop display. As of late, programmatic has been rapidly gaining traction in mobile and video. As the industry as a whole shifts towards mobile, SSPs are seeing an increasing amount of programmatic transactions served on mobile devices.

Again, the better a publisher is at understanding the distinctions between programmatic and direct, the better the two channels can complement each other, working together to maximize inventory value and revenue.

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