Programmatic advertising makes up around 16% of the advertising investment in Spain.
The constant growth encourages a new way of thinking about digital media and advertising.
Luca Brighenti Manager, Demand & Partnerships at Improve Digital, talks to us this week about the evolution of Programmatic Advertising.
We would like you to introduce us to the SSP concept
The SSP, otherwise known as Supply Side Platform, is a technology solution enabling display media owners to sell their inventory to the programmatic ecosystem.
Some SSPs, like Improve Digital, allow the publishers full ownership of all of their programmatic relationships. This is the real value, as they can configure the solution to their programmatic strategy and leverage the technology and automation to drive efficiency – increasing revenue and reducing cost of sale.
The programmatic marketplace is growing incredibly quickly. With so many players – like SSPs, DSPs, Ad Exchanges, Agency Trading Desks – all working together to serve ads in an RTB environment – it is easy to lose sight of how all the pieces fit together. At its simplest, one can think of the SSP as the must-have technology for publishers who want an easy onramp into the programmatic space.
What is your vision of programmatic in Spain these days?
When we speak about programmatic, it’s complex, and can look different depending on how you approach it – as a buyer, a seller or a technology provider. For me, though, the simplest definition is four simple concepts: Fast, Efficient, Effective, 24/7.
Programmatic is simply the automation of the buying and selling of display, video, and mobile ads using real-time bidding to conduct the buyer-seller transaction, impression by impression, in mere milliseconds.
Based on my experience working for the Spanish market, I see the interest in programmatic and RTB is increasing. The conversations are starting to become more strategic, and companies are beginning to make serious technology and team investments. Spanish publishers have always looked for ways to increase the value of their inventory, and I can notice a big shift as many seize on the opportunity before them. The market is maturing, and players are becoming more knowledgeable. We still have a lot of progress to make, but the industry has come a long way.
The biggest change I see is in how publishers view the role of programmatic. Publishers once thought of programmatic as only a solution for remnant inventory. That is no longer true, as almost all premium formats are present in the programmatic exchanges, including Rich Media and Video. Furthermore, buyers and sellers alike are taking advantage of automation to make direct negotiated sales more efficient – running “traditional” deals through programmatic channels.
Programmatic is also changing how buyers think about reaching their target audiences. In programmatic, you do have control of every impression-user match. Every day I speak more often with the media buyer about buying audience instead of inventory, viewability, deal ID, bid requests, etc. Discussions about the opportunities behind buying different kinds of data and audience are becoming more commonplace and much more strategic.
The publishers in Spain are using many players to monetise their inventory. First are the technology companies like the SSPs, and despite the risks to overall yield, many of the publishers are working with more than one SSP. Besides this there are multiple ad networks with significant publisher penetration, and this leads to a lot of market fragmentation.
To combat this fragmentation, and make the selling process more efficient, Spanish publishers are beginning to notice what their other EU counterparts are doing. Rather than using multiple SSPs as a tool for a portion of their inventory, some are beginning to rely on a single SSP integrated as part of a holistic yield strategy. This leads to higher inventory yield and much more efficient sales. It is good to see some leaders in the Spanish market heading in this direction.
In your opinion, what is necessary for programmatic work well for the average publisher or buyer?
Knowledge and transparency. Both publishers and buyers working in the programmatic environment must be aware of the value proposition of the ad products and audiences available. This helps both parties get more of what they want – greater relevance for the marketer, and more revenue for the publisher. Daily, I speak with both sides and I’m committed to helping them get the most out of the programmatic opportunity.
What is the value of data in the programmatic ecosystem?
All marketers have one objective in common: identify and reach the right users. This is the real added value of programmatic, because the buyer can use data – in the form of cookies – to reach the exact audience they want with each and every impression. The application of audience data is a big topic for publishers and marketers alike. For the publisher in particular, audience is their primary asset, and they want to understand how to manage, control and monetise their audience and first party audience data in the safest way possible.
Every day the users leave different invisible trails through their interactions with web pages – whether it is the things they buy, the things they read, or information they share, like age, gender, or geographic location. Data on users and user behaviour is very valuable. All of this data can be applied in different ways to analyse and optimise advertising, content, and commerce experiences. All of this is powered by the ‘Big Data’ revolution that is currently taking centre stage. New tools and techniques for storing, analysing, and making actionable these huge digital data sets is revolutionising advertising in general, programmatic advertising in particular.
Data is a new currency in media, joining the ad impression as something that is actively bought and sold. It is also a sensitive area, given the privacy concerns, variability in laws and regulations from region to region and country to country. Also, continually, buyers, sellers, and web users are faced with the biggest question – who owns the data? Data is definitely here to stay, however it’s still early. Big investments must be made so buyers and sellers can take advantage of the opportunity, but the data itself must be handled with care.
What do you predict for the coming years?
I anticipate that publishers in the Spanish market will make big investments in programmatic. Buyers are becoming more demanding, and publishers must respond, both to meet the market demand and, more importantly, have as much control as possible of their precious inventory and audience assets.
The demand for programmatic inventory will only increase – the future of digital media is automated and data-driven. Technology is both driving this change and critical to managing the opportunity that comes from the big programmatic shift. Making the right investments today in the tools and technology needed to manage programmatic sales and audience data will pay huge dividends tomorrow.
Do you trust in a 100% programmatic model?
For those publishers without very valuable inventory, a full programmatic solution might be possible. Most publishers however do have some set of premium ad products that they will always manage and sell directly. That said, most publishers are likely underestimating the programmatic opportunity they have. It might not be that 100% of inventory is sold via programmatic channels, but 60, 70, 80% is definitely possible.
The near term model that I see is something like: 60% of the inventory in programmatic, 20% guaranteed programmatic, and 20% through other indirect sales channels. What publishers need to do most of all is address the channel management challenges. All of the buyers are competing for the same inventory, and publishers need to ensure that they always allocate inventory to the best sales opportunity and avoid the opportunity cost that comes from selling to one party for a price lower than another party would have paid.
To come back to the original SSP topic, while I cannot speak to all SSPs’ capabilities, Improve Digital for one has long pursued a reconceiving the traditional role of the SSP to include channel management and address these kinds of cross-business decision support and optimisation.
Do you think perspective will change, and people will stop the way of thinking in programmatic as the “just remnant”?
Yes, absolutely. That change is already underway. Big brand advertisers are shifting increasingly larger portions of their buys into programmatic. Where there is new ad spend, publishers will soon follow. With most of the publishers Improve Digital collaborates with, there are considerable investments being made in “programmatic premium” and “programmatic direct” strategies.
How should a publisher begin if they want to engage an SSP as a revenue partner?
An SSP allows a publisher to take advantage of the huge demand for automated sales and define exactly how they will tap into the programmatic marketplace. It also ensures that, when they do so, they are getting the highest return for their inventory, as buyers bid for each and every impression via an auction-based sales model.
When the publisher wants to adopt an SSP, it takes more than just the technology. It takes people and process too. It becomes a core part of their sales and product strategy. They should be mindful of the organisational investment that will come as well.