Whether you’re an advocate for programmatic or not, the fact that it has arrived won’t change. Simply put, any publisher who is not offering a programmatic buying solution is already losing digital budget, as more media buyers equip themselves with the tools to make programmatic buys. In an environment where budgets are increasingly rationalised, it is not surprising that many publishers are wary of programmatic and RTB (Real Time Bidding) platforms and the implications it could have on their bottom line.
Historically, a model has been utilised that created a daisy-chain effect – with too many middlemen – resulting in advertisers buying inventory for too much, and publishers ending up with the smallest percentage of the sale. This ultimately became a ‘race to the bottom’, with inventory being sold at a fraction of the real value and publishers receiving an even smaller margin. In addition to this, click-farms and false inventory were endemic. This, coupled with publisher’s original hesitation, has meant that programmatic buying and RTB has a negative connotation within the South African publishing environment. But the fact is, programmatic buying has arrived on our shores, and we have the choice to embrace it locally in a way that suits us, rather than focusing on the historical negative.
Recently, Amazon has announced that they will be allowing inventory and data around their ads to be bought through their own bidder. This means that only buyers who are able to purchase programmatically will have access to those eyeballs. It is also rumoured that American Express is shifting towards 100 percent of their buying being programmatic, and Air France has already done so successfully. Yes, these cases don’t necessarily affect our local publisher now, but it shows just how powerful programmatic buying is and it certainly dictates the trends that we will be seeing in the next five years.
Why is programmatic buying so powerful and how does it benefit publishers?
Initially, programmatic buying allows publishers to sell inventory that is not already monetised by direct sales teams and this adds to the overall revenue. But the real value in programmatic buying lies in the data that publishers can gather about their inventory and use to add value to each impression sold to buyers, increasing their overall yield. Programmatic buying also allows publisher sales teams to focus their attention on negotiating long term deals with their larger clients – similar to the direct, client-facing Facebook sales model – it allows publishers to focus on large revenue deals over long periods of time. In addition, these deals can be even further incentivised with greater discounts due to there being very little operational requirement from their team to implement these deals.
Publishers also need to be aware that programmatic platforms are not just a way of selling remnant inventory. Whilst we don’t expect local publishers to go 100 percent programmatic immediately, there are ways to sell inventory programmatically and still receive the same, or better, yield that direct sales teams achieve. In private exchanges, publishers can set rules which ensure that they protect their premium inventory and ultimately their bottom line. Publishers can, for example, exclude their premium homepage inventory from the exchange environment. In addition, they can set price floors for their entire inventory in the exchange - ensuring that their inventory is never sold for less than what it would be through direct sales teams, just in a more efficient and far-reaching model. And efficiency benefits everyone; buyers spend less time consolidating and sellers spend less time administrating which allows the industry to focus on building innovative products that allow brands to better engage and connect with their audiences.
We’re in a very interesting time within the media landscape. Programmatic buying is only just starting to disseminate into our local environment, providing publishers with a unique opportunity to work with sell-side platforms to ensure that their needs are met and they get the same benefits that buyers receive. The South African market is not the same as the US or European market, so we should find a model that works for us – a model that benefits all parties involved. No one wants South African publishers to become unsustainable; that wouldn’t benefit anyone. Programmatic buying will not cannibalise publishers in their current form because we won’t let it – we need, and want, to work together with all role players to ensure that we harness the advantages of programmatic buying, whilst minimizing the disadvantages.
Paula Raubenheimer, the MD of SouthernX, has over 8 years’ experience in the digital media landscape. Paula has a B Bus Science (Law) degree and completed Post-Graduate studies in Marketing and Advertising Communications.
Before commencing with SouthernX, Paula was the Group Commercial Director of the Habari Group. On leaving the Group in 2013, Paula launched an e-commerce store, which she made profitable after only four months of operation. Paula’s specialties include digital business development, media sales, general management and business strategy development and execution.
In 2015, Paula was named as one of The Mint Top 40 Under 40 most influential people in media by The Media Online. Paula was also selected to be a speaker at the Integrated Marketing Communication Conference and the Best of Global Digital Marketing Conference in 2015.