Digiday and Technorati Programmatic Scorecard: Gentleman’s C

Neither the open market nor private marketplaces get more than a barely passing grade from buyers and sellers, a survey by Digiday and Technorati said on a webcast we listened to recently. Both advertisers and publishers gave the open bidding programmatic process only a C. Publishers cited low eCPMs and difficulty with integration as reasons not to work with more partners, and advertisers were disappointed because they saw the same inventory from multiple supply side platforms.

This wasn’t surprising, but the private marketplaces fared little better. Private marketplaces are customized, invitation-only marketplaces where publishers can make their premium inventory and audiences available to a select group of buyers. About 67% of buyers and sellers use them, and they make up about 15% of digital ad spend. But publishers complain they can’t find enough buyers to enter these deals, and if they do it’s difficult to ensure that they’re actually buying. From the buyer side, inventory discovery falls short of expectations.

And both sides complain about inefficient deal negotiation mechanics.

Improvements will need to be made to align what buyers actually value with what sellers think buyers value. This is where greater transparency comes into play.

For buyers, the highest value is first party data segments, followed closely on by viewability. First look or exclusive access are only in third position, followed by context, frequency capping, and ad seizes or formats. Sellers, however, think buyers value first look/exclusive access, followed by context, followed by ad sizes and formats, and viewability not so much.

Right now, the marriage between buyers and sellers is on the rocks due to poor communication. But this marriage can be saved, because both sides are in agreement that inventory/demand discovery, deal negotiation, and industry packaging need attention most. Budget fulfillment, campaign setup, and streamlining delivery seem less important.

Buyers told the survey that floor prices were too high for sufficient ROI. There is also a perceived lack of transparency over ad context. Publishers don’t realize that advertisers are usually looking for audience, rather than specific domains. To make up for the opaqueness of the process, 75% of buyers use in person meetings with publishers to educate themselves about the qualities and unique capabilities of a specific publisher’s inventory.  Surprisingly, 45% use trade press. Only 22% rely on Nielsen or Comscore.

Private marketplaces could easily improve with more accurate and descriptive packaging of inventory. Publishers would have to trust them and present their valuable, premium inventory, and deal negotiation has to go smoothly.

Clearly programmatic has a ways to go before either side is satisfied. Nevertheless, both publishers and advertisers expect their participation to increase.