Can branding and performance retargeting co-exist in the same programmatic channel?

23 Oct 2012  |  Petteri Vainikka 

Petteri Vainikka, VP Marketing for Enreach, discusses 'programmatic premium' and premium real time bidding (RTB) and how they might co-exist together.

A proposed solution?

Universal McCann's client digital partner, Wayne Blodwell's article is perhaps the first - by an agency brand marketer, not a RTB tech vendor - that truly provides a proposed solution to the inherent conflict of interests embedded within the notion of premium publisher supply entering today's lowest cost per click (CPC) obsessed RTB/exchange channel.

Interestingly enough, the proposed splitting of the automated channel into two - one for CPC/DR retargeting and the other for branding - is already taking place but has a long way to go. Even more importantly, the same two-way split that is already taking place on the supply end (publishers) now needs to be mirrored on the agency or buy side.

The CPC/DR retargeting version of the automated channel is what is today driving RTB demand volumes and introducing new search-like budgets to display with many previously search-only marketers starting also to buy display directly or indirectly.

However, because of the business objectives of these buyers (inventory at lowest cost, standard formats, and largest scale), the success of this new market has made the exchanges a very unattractive place to sell publishers' premium supply.

Publishers and premium inventory

It is important to note here that not all inventory from premium publishers is genuinely premium, or, should be regarded as inventory appropriate for branding. This volume-based market, operating as it does for the benefit of the buying side, is where RTB truly delivers: the success criteria being lower CPC/CPA (cost per acqusition). This is also what the RTB protocol, along with exchange-based scalable inventory, was designed to do.

The other programmatic channel has - paradoxically - very little to do with real-time or bidding, but simply leverages the streamlined trafficking features of the automated channel but in a controlled environment. Most publishers and vendors refer to this as the private marketplace model.

These two represent very different inventory, very different access rights (selected agencies only), a very different sales model (price floor driven - not bid driven) and are intended for very different buyers and buying objectives. This latter version of programmatic is for branding campaigns, with very little emphasis on real-time or bidding; but much more emphasis put on planning (right media environment, right ad formats, right audience) and long-term value co-creation in the form of close publisher-agency/advertiser relationships.

How can value be created?

In this emergent 'programmatic branding' channel, the focus of attention needs to be on how can additional advertiser and publisher value be created? Lowering transaction costs with automation is not the same as creating new value.

As opposed to the CPC focus of the CPC/DR retargeting channel, here, the attention needs to be on creative analysis and audience insights. Solving these needs has little to do with complex big data bidding considerations and much more with publisher side audience understanding and reporting abilities; the core elements of brand media planning.

Hence, the ball that will grow display branding budgets online - automated or direct - is actually in the publishers' end of the court. This should be regarded as good news, as publishers have until now hardly been on the court at all.

If automated or direct stood out from the paragraph above (this being the first time 'direct sales' is mentioned), there is a simple reason for this. When using the automated channel for branding campaigns as scoped here and as is the case with many premium publishers' private marketplace strategies - the programmatic channel becomes a streamlined, buy-side integrated, direct buying and trafficking mechanism and not a real-time bidding mechanism (although it is of course possible that some bidding above the set floor prices will follow assuming sufficient scarcity).

It does not change the need for key account management or other forms of direct campaign sales but handles the cumbersome manual steps in going from agreed campaign sales to ad delivery, reporting, and invoicing.

It delivers automation, but hardly any real-time bidding or new demand. As Deutsche Telekom/Interactive Media director Dr. Martin Enderle put it: "There is no 'fresh money' on the demand side just because a new technical trading system is available."

Quality advertising served beside valuable content

What can be said about publishers tapping into the 'real' RTB channel to attract a piece of the growing search-like budgets?

Be prepared to operate on low CPMs and make sure the inventory made available in this ultra-DR focused channel is clearly different - not just on price - than the one sold either direct or using a private marketplace. At the end of the day, it is all about finding a product balance, and knowing that different ad products need to and will be valued differently. In the age of technology and information overflow, attempting to sell the same ad products at clearly different prices just based on different sales channels will not work.

Finally, a large topic that normally goes entirely unmentioned within online advertising circles, is that for premium publishers to remain the esteemed and trusted sources of information to their primary constituents (their valuable readers), the quality and type of advertising they serve - or allow to be served - beside their costly and valuable content needs to be carefully considered.

Being surrounded by multiple highly personalized retargeting banners on one page is not what most valuable readers consider as appropriate behaviour from a considerate, trustworthy and premium media form. Annoying, spooky, worrying and ultimately boring possibly but not appealing, interesting, informative or effective.

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