Programmatic technology continues to expand its footprint in the digital marketplace, there’s no doubt about it. By 2019, eMarketer predicts, 89% of mobile digital display will be purchased via programmatic.
Tracking alongside this growth is the expansion of programmatic direct. As it splits the difference between real-time bidding and totally manual ad-buy systems, programmatic direct allows publishers and advertisers to create specific agreements around how the process will work. It guarantees protected inventory and premium placements without requiring much if anything in the way of hands-on operation. It’s the best of both worlds.
And while we’ve been hearing about it for a long time, this year we’re starting to see results related to the kind of uptake we long hoped for: recent studies forecast programmatic direct to command $32.6 billion in ad spend in 2017. Meanwhile, open exchanges look like they’re losing buy-in: Q4 last year, programmatic spend in the open exchanges dipped 10 percentage points. Clearly, advertisers don’t want the risks associated with the low-quality inventory that exchanges leverage.
But here’s the challenge: much of programmatic direct’s growth has centered on mobile-web and display. It’s time to turn some fresh attention to programmatic direct as it applies to in-app inventory — the final piece of the puzzle our industry needs to lock in place.
Programmatic Direct: Richer, High-Impact Opportunities for App Inventory
We can streamline operations, we can streamline the buy-process, but we don’t have to settle for the lower-quality experience of lesser programmatic tiers like RTB. In a phrase about the topic borrowed from Michael Kuntz, senior VP of digital revenue at USA Today Network, we’re talking about “richer, more high-impact media opportunities.” That’s been the case for mobile-web and desktop. Now it’s time to drive for the full impact of programmatic direct in the in-app environment.
It’s understandable that mobile apps have seen some lag. A good amount of the time, energy and investment that went into programmatic direct in its early days was focused on the desktop play. And some of the SDKs that enable programmatic direct in the app space have, in the past, had a reputation for slowing down the app and negatively impacting the consumer experience.
We’ve come a long way, however, and developers don’t need to rely on cumbersome SDKs anymore. Already, in-app spend on inventory is on the rise — up to $33.1 billion last year, edging past the $24.9 billion spent on desktop. Publishers and brands can achieve efficiency plus rich inventory — a higher tier of programmatic that doesn’t depend on the remnants that make up real-time bidding and open exchanges.
And even though the drive to add programmatic direct to the core of the in-app experience is underway, this call for progress doesn’t have to mean the death knell for real-time bidding. RTB still plays a significant role when it comes to a well-balanced media mix — buyers can find gems at low rates in terms of inventory and supply. With the focus more squarely on programmatic direct, however, publishers can get even greater yield from managed services. It’s the high-touch relationship that unlocks all the capabilities, data, controls, and measurements that come with programmatic direct’s automation.
Optimal levels of yield, new levels of control and brand-safety assurances in the mobile ecosystem … but in a fully automated capacity. That’s why helping programmatic direct to grow and accessing the future it unlocks for in-app experiences is so important.
As Verve’s global chief revenue officer, Kevin Arrix leads the company’s sales, customer success and advertising operations. In this role, Kevin is focused on driving performance through the development of business relationships in U.S. markets and overseas. He previously was executive vice president of worldwide brand partnerships at SFX Entertainment.