Each month, AD-Vantage will be asking experts about the big issues impacting the Canadian digital advertising industry, like advertiser investment, measurement challenges, programmatic strategies and other factors driving major changes in the evolving media landscape.
As understanding of programmatic grows, marketers are coming to see that it’s not all about real-time bidding on open ad exchanges. There are ways to connect directly with publishers but still use programmatic targeting to access inventory — what’s coming to be called programmatic direct.
So, what are the pros and cons of RTB and programmatic direct? We asked our experts: What do you see as the key differences between the two media buying methods, and when should brands choose one or the other (or a combination) for their campaigns?
VP Digital, M2
Programmatic direct is a more efficient way to buy specific inventory from a known publisher, the same model that has been used since the dawn of media. It’s about automating the direct buy process, and creating savings on both ends of the supply chain — for agencies to reinvest into clients, and publishers into products. It’s a good fit for awareness or acquisition when you have a reasonable expectation that a publisher will perform well, which past performance can indicate but not guarantee.
RTB is about buying audiences instead of inventory, which is another step forward in efficiency. This is accomplished through an algorithmic auction-driven marketplace. It’s the media industry’s version of high frequency trading, sans front running. RTB is an opaque marketplace, so you need to manage brand and fraud risk carefully. It works best when you have good data that you can use to target audiences. RTB is strong for acquisition because that’s something relatively straightforward to optimize towards.
Importantly, for awareness campaigns we now have two new measurements: viewability and on-target delivery. These will raise the bar for what it means to deliver awareness, regardless of the type of buy.
Managing Director, Canada, Xaxis
Xaxis and its parent agency, GroupM, have publicly stated that we will be wrapping up all RTB media buying on open exchanges by the end of the year. That makes the difference between RTB and programmatic direct very significant to us.
Programmatic direct allows for more control over available inventory, which benefits everyone. The client gets better access to quality inventory in a brand safe environment. Publishers don’t have to compete for bids with high-traffic fraudsters. And agencies — who have always prided themselves on the relationships they have with publishers — get to flex their muscle and get the best media for clients. All this while still using data to define audiences and deliver efficiently.
The RTB space has tended to be the final resting place of the inventory that publishers can’t liquidate through any other means. It’s like the bargain bin at the local department store: there are always some good finds, but you need to weed through a lot of junk to get to them. And when you do chance on something worthwhile, you end up fighting someone else who spots it.
The best choice for brands depends on their marketing objectives. If brand safety and environment are on the list, programmatic direct is the route to go. If it’s about efficiency at all cost, RTB may be the best choice — but keep your eyes wide open, and know the risks.
Director of Acquisition & Customer Digital Enablement, American Express Canada
At Amex, the key difference we see between RTB and programmatic direct is the quality (and the cost) of the inventory.
Thanks to cost effectiveness, RTB lends itself very well to acquisition-type campaigns with hard CPA goals. That said, RTB can also work hand in hand with higher impact media buys to drive brand or product awareness. Based on higher CPM rates, it is easy to think of programmatic direct as a purely brand awareness play, but as a company, we want to go beyond that and think more holistically about media buys. We strive for a combination of high-impact (more expensive) and low-impact (cheaper) buys to achieve the desired results.
The exciting thing about programmatic buying (RTB and direct) is the same targeting and tracking can be applied across all upper funnel and lower funnel campaigns. Using this approach allows you to tune your media plan to hit the sweet spot for your specific needs.
Programmatic, at its core, is the combination of data and technology to automate the buying process. We have to remember that RTB and programmatic direct are just two of many ways programmatic can be implemented.
RTB affords marketers the ability to procure inventory in real-time, helping them find audiences at scale and reduce waste, and is often associated with lower CPMs. However, it’s not always the end-all solution.
Programmatic direct offers brands chance to leverage their established relationships while assuring them their ads are running on quality, brand-safe content. Many agencies, advertisers and media companies use our platform to help facilitate these very interactions of programmatic video buying as well as utilizing RTB and open exchanges as a supplement to programmatic reserved and programmatic direct buys.
So when should brands choose one or the other? To me it’s not an either/or. The beauty of programmatic not only lies in its ability to create a more efficient environment to buy, but in the efficiency it offers beyond pricing. Higher efficiency coupled with targeting and the right content – whatever the buy type – means greater ROI.
SVP Mobile Strategy, Addictive Mobility
We face a new set of challenges when it comes to buying mobile audiences for our agency partners and brand clients. As the mobile ecosystem lacks the pervasive cookie, both mobile RTB and programmatic direct audience buying must rely on users’ device IDs for audience targeting and attribution. Device IDs must be tied to first- or third-party audience data, regardless of whether the buyer is accessing impressions directly or through an open exchange.
In mobile, RTB may not necessarily be able to guarantee that a buy will be fully filled due to limited supply or competitive demand for the same placements. However, there are some mechanisms, such as the Deal ID standard, that give the buyer flexibility to run nearly unlimited campaigns with individual goals to ensure 100% fills on delivery.
RTB tends to have lower CPM rates, so it works well for direct response campaigns, where for example the advertiser is looking to drive downloads of branded apps. But for brand campaigns, programmatic direct justifies its higher CPM rates with surgically targeted audiences and premium placements on high-quality apps or mobile sites. In order to ensure brand safety and deeper transparency, brands and agencies can can consider private exchanges and invite trusted partners to connect via programmatic direct in order to drive further efficiencies and guaranteed fills against individual campaign budgets.