Real Time Bidding v. Programmatic Direct

Why is programmatic direct better for advertisers than just being content with RTB?  RTB took over quickly because it saved media buyers both money and time. RealTime Bidding gives marketers the opportunity to look at hundreds of billions of impressions a minute, and bid only on what they think is relevant to them. The use of demand side platforms (DSPs) can make advertisers more selective about their ad spending and change bids in an instant, alter their buys or entire campaigns on the fly and take advantage of opportunities to reach the same customer in different locations or at different times of day so their ads are actually in a context the consumer finds useful.

With real time bidding an advertiser can also retarget a customer quickly, which sometimes enhances the value of a campaign. It’s all a question of speed. Because every marketer can access so many impressions, display retargeting is low-hanging fruit.  Not only does this improve effectiveness, it lowers costs. If a consumer doesn’t click, she can be removed from the advertiser’s list of potential customers. And because exchanges do the job of aggregating customers, they offer the advertiser a form of “one-stop shopping” for the right target

The problem with RTB is that it isn’t a guaranteed buy. An advertiser can find the perfect customer, but lose the auction. The nature of auctions is that nothing’s guaranteed. However, that customer is easily tracked and found again.

This time, the advertiser may choose to target that customer through a direct buy, to make sure sure of reaching her. Back in the day, these direct buys were done by sales teams, but today they are also increasingly becoming automated. Once the advertiser has begun to use customer data, and the publisher has also begun to present its user data, a direct buy can be executed automatically. This is called “programmatic direct,” or as Ad Exchanger puts it,

a new form of programmatic piping to do direct, straight-to-publisher, guaranteed ad campaigns – the types of campaigns traditionally bought with RFPs, IOs and too much slow manual work. It [is] time to bring more technology to that grossly outdated process, automating the pieces humans shouldn’t be spending time on so they can focus more on planning, selling and customized campaigns.

And if you hear the term Deal ID, don’t think it’s something different. A deal ID is simply a unique number of an automated ad buy. It’s a way of getting outside the auction process for premium inventory, and both advertisers and publishers like it, because the price is guaranteed and it’s predictable.

These are the kinds of deals we’re seeing more of every day. Guaranteed reserved inventory is what the advertiser gets. The programmatic part is how the work gets done–by means of APIs and computers rather than faxes and spreadsheets.