The traditional concept of advertising comes with a close relationship between advertisers and publishers. Many advertisers value this relationship. However, traditional direct deals cannot offer the scale, speed and efficiency of programmatic. This is due to the fact that traditional direct deals rely on human negotiations and manually inserting the orders which makes the process slow and inefficient, especially when dealing with hundreds of thousands of orders at a time.
With the major switch to mobile, advertisers started replacing traditional media buying with programmatic. However, some advertisers still keep themselves away from programmatic, thinking that there is a lack of guaranteed inventory and premium ad placement. Programmatic direct provides a way for advertisers to test programmatic while keeping the one-to-one relationships with publishers.
What is Programmatic Direct?
According to IAB, Programmatic direct is negotiated directly between buyer and seller. The inventory and pricing are guaranteed, and the campaign runs at the same priority as other direct deals in the ad server. The programmatic element of the transaction that differentiates it from a traditional direct sale is the automation. Negotiation and fulfillment can be completed through a platform instead of manually.
Programmatic direct can be accessed in two different ways, depending on the inventory.
So, let’s refer the flow chart to understand how programmatic direct works. We can see that under programmatic direct, inventory isn’t auctioned. However, another important question that arises is whether the inventory is guaranteed or not, i.e, reserved or unreserved inventory.
Reserved or Unreserved?
If the inventory is guaranteed or reserved, we are dealing with programmatic guaranteed or automated guaranteed. This category is more like the traditional direct sales process, in which inventory can be reserved well in advance, both parties agree upon terms upfront and the actual buying mechanism is automated. Deals are negotiated directly between a single buyer and seller via technology and programmatic pipes connect the buyer directly to the publisher's ad server. Hence, programmatic direct.
Conversely, when the inventory price is fixed, but the inventory amount is not guaranteed, it is referred to as unreserved programmatic direct. Relying on a bid-ask protocol to execute the deal, it functions in a similar way as a private marketplace (PMP), with advertisers getting a “first look” or a “right of first refusal”. A Deal ID is issued to transact such bid requests at the terms and price that were pre-negotiated one-to-one between the advertiser and the publisher, and unique to each buyer.
Both approaches – reserved and unreserved programmatic direct – employ distinct technology to solve the same general problem: Direct ad sales are hard and automation is essential. With that said, it isn't necessarily the case that one channel is better than the other. In a growing market, there's room for more than one solution. Many publishers already employ both channels of programmatic direct to suit the varying needs of different buyers. Meanwhile, some will choose the real-time bidding route (RTB) through open exchanges or PMP deals and some will employ multiple channels. The choice of media-buying channels should be based on your app marketing campaign objective.
To learn more about how Aarki can help you with your mobile advertising, please contact us at firstname.lastname@example.org.