This is a guest post by Andrew Buckman, MD EMEA, OpenX

There was a time when inventory deals ended with a handshake that confirmed the deal was done, prices were agreed, and delivery would be assured. Then programmatic changed the game — replacing the handshake with programmatic platforms and swapping certainty for an opportunity to identify audiences, and bid in real-time.

Now the industry is hankering for something in between, and as far as the sell side is concerned, only one option fits the bill — programmatic direct. Earlier this year, City A.M. became the latest publisher to adopt an entirely automated method of selling guaranteed ad space via programmatic technology, driving accuracy and efficacy.

With greater control and digital advertising revenue on offer, the appeal of programmatic direct for sellers is obvious. The question is: what does this mean for marketers and their strategies? The short answer is that programmatic direct has the potential to be very positive for marketers. The long answer is that to realise its benefits, marketers must understand what the approach is and how it can be used.

What is programmatic direct?

Programmatic direct continues to evolve from its earliest incarnations to today, where publishers have the option to select from three different models: private marketplaces (PMPs), automated guaranteed, and real-time guaranteed. In simple terms, these approaches streamline the process of negotiating direct deals between publishers and marketers, media buyers or agencies. They swap the traditional manual Insertion Order (IO) for faster and more advanced algorithms.

How does it work?

Programmatic direct uses the automated platforms and audience buying capabilities pioneered by RTB exchanges to varying degrees, and allows publishers to enhance the efficiency of conventional ad buying. While the three models provide their own unique capabilities they are not created equal as we see below:

PMPs: the first iteration of PD allows publishers to present high quality inventory — often enriched with additional data layers — to carefully selected buyers in a private auction.

Automated guaranteed: uses programmatic to coordinate an exclusive, one-to-one deal with fixed terms between a marketer and media website, for a set amount.

Real-time guaranteed: combines the sophistication of audience-focussed buying with the speed of real-time auctions, while keeping inventory assured and prices fixed.

Why does it matter to marketers?

As automation becomes the dominant force in digital advertising — currently accounting for 60% of UK display ad trading — marketers are increasingly drawn towards mechanisms that balance traditional security with modern efficiency. And this is precisely what new tools like the models within programmatic direct provide.

PMPs offer the ability to add layers of data — which is not just a revenue booster for publishers — it also means that marketers benefit from exclusive access to enhanced inventory, where additional data means better targeting and greater performance.

Automated guaranteed gives marketers simple access to premium inventory, without the human input and lengthy request for proposals that once made direct deals unfeasible for small budgets. Quality is high by default, and so the risk of fraud and poor viewability is low, making it an ideal introduction to automation. Buyers also receive a higher level of certainty — the method offers both assured priority and a complete view of which publishers the marketers are dealing with, what they are buying, how much they will pay, and when the agreed campaign will run. Marketers are however unable to use data to buy audiences on an impression-by-impression basis.  

Real-Time Guaranteed represents the convergence of these two models – offering the certainty and priority of an automated guaranteed deal with choice and efficiency of PMP. This model enables marketers to sync their own data with specific audience segments, dramatically increasing the effectiveness, performance and contextual relevance of campaigns, as well as securing specific volumes of impressions — thereby allaying fears about brand safety that frequently hinder programmatic adoption.

Next steps…

With the capacity to solve many of the issues that have prevented the ultimate effectiveness of automated tech, the future of programmatic direct seems bright. Indeed, this type of trading is at the centre of a revolution in the way digital media is bought and sold that will soon begin to spread beyond the web, and encompass other formats – from traditional TV and print, to online video.

The technology is also continuously growing more sophisticated, producing new strains — like real-time guaranteed — that combine RTB efficiency, audience forecasting, and secure trading to benefit both sides of ad deals. Although still in its nascent phase, this model’s capacity to boost publisher yield, while increasing choice and transparency for buyers is set to make it the preferred option of the future.

The final handshake is rapidly disappearing from digital media deals, but that doesn’t have to be a bad thing. Solutions such as those encompassed by programmatic direct offer marketers the means to broker more efficient and valuable deals than ever before, and as tech evolves even further, they will present even greater opportunities to boost relevance and revenue. All marketers need to do is ensure they understand, and keep up.