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Programmatic Direct: Drivers and Challenges

Direct ad buying has been there since the dawn of the advertising industry. Yet, in the digital age, it’s having a hard time keeping up with the coming of programmatic, which in the minds of many publishers and brands is still reduced to real-time bidding only.

Historically, direct ad buys rested on human-to-human interaction rather than automation. As we are talking premium inventory here, publishers have always been striving to assure the quality of advertised content while buyers have been looking for brand-safe contexts to keep the integrity of their brand voice.

Infusing the programmatic incarnation of traditional direct ad buying with this level of control on both sides while making transactions more efficient would be a decisive factor fostering adoption of programmatic direct.

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Operational Efficiency: A Winning Value Proposition

The overarching motivation ‘to do more with less’ permeates digital advertising as much as other high-tech business domains such as e-commerce, travel & hospitality, banking, you name it.

Back in the early 2010s, this ‘efficiency imperative’ was the major impetus behind adopting real-time bidding. Today, it’s vividly manifested in direct ad buying as well. As far as AdTech solutions go, programmatic direct implies automation of RFPs, campaign trafficking and inventory reservations.

Such automation comes to replace time- and labor-consuming manual I/O workflows that mostly have to do with back-and-forth faxing and emails. Excluding these chores from the process means lower overhead expenses, and this can open up programmatic direct for smaller brands with limited resources as well.

At the moment, programmatic direct is a growing portion of the US digital ad market. It’s far from going mainstream yet, but the stats show an upsurge in both offering and adoption. In 2015, 90% of Ad Age Top 100 Global Marketers placed programmatic direct deals (DoubleClick). As estimated by eMarketer, it is expected to reach 54% of the total digital display ad spending by 2017.

Raising the Quality Bar…

Increased efficiency in direct media buying is not the only area where programmatic could make a big difference. There is also the question of ad quality and marketing payoff.

For better performance and ROIs from their top-dollar campaigns, advertisers expect stronger engagement of their target audience. In their turn, publishers, striving to grow audiences by delivering a great user experience, are just as interested in running high-quality creatives that connect with consumers emotionally.

Incorporating automated ad quality control into programmatic direct would reward better advertisements while penalizing poor ones that ultimately hurt everyone in the ecosystem. This kind of technology would ensure better campaign performance for brands as well as maximize revenue for publishers — an all-around win.

…And Stumbling Over Traffic Legitimacy

Programmatic ads are notorious for attracting bot traffic and ad fraud. In 2015, bots accounted for over 55% of all web traffic, and an average of 17% of programmatic impressions was actually wasted on fraudsters.

Premium publishers are going the extra mile to protect programmatic direct buyers from fraud. An increasing number of publishers start selling based on the viewability metric. At the same time, ad agencies such as Mediative step up to protect their premium-buying clients, making a stress on clean and brand-safe advertising environments.

Today, fighting ad fraud remains a collective mission that should be equally shared by publishers, agencies, brands, and vendors of AdTech solutions. As billions of dollars are lost annually to ad fraud, raising the traffic legitimacy would eliminate the number-one obstacle to adopting programmatic in general, and programmatic direct in particular.

Summing Up

Although loudly voiced concerns about ad fraud impede the spread of programmatic direct, the digital ad industry carefully but steadily embraces this mode of ad buying. The promise of higher operational efficiency is among the major drivers of adoption, which currently peaks at nearly 50% of the US digital display ad spend.

Coupled with enhanced quality assurance opportunities for both publishers and brands, programmatic direct is bound to bring all the value of traditional direct ad buying to digital.

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