Publishers use of Programmatic Advertising is rapidly increasing and, as an effect, the digital advertising scenario is changing. According to eMarketer:
US programmatic digital video ad spending will soar 212.2% to $ 2.18 billion, or 28.0% of total digital video ad spending. Next year, we expect growth of 76.4% to push this share to 40.0%, or $ 3.84 billion.
Forecasts make therefore think about a real explosion of Programmatic Buying. But while the benefits of programmatic advertising for advertisers are quite clear - lower cost and more effective ads - the benefits of real time bidding for publishers are still not well defined.
Programmatic Advertising gives to publishers the opportunity to segment the target audience in a more effectively way than traditional targeting methods. With a more specific target, and therefore with an effective audience for ads, publishers may sell their advertising space at higher costs.
But, until now, publishers have been reluctant and frightened by the use of the new technologies used for programmatic buying.
The main problem with the real time bidding is about ads inventories.
Before the rise of Programmatic Advertising "programmatic inventories”, that are a unit of ads available through global advertising platforms, were called "remnant"; these inventories, were considered of low quality and could not be sold by publishers: it is estimated that 90% of programmatic inventories remain entirely unsold.
With real time bidding things changed: for publishers are now available daily “Premium” inventories, which are based on algorithms that automate and simplify publisher’ sales process. Advertisers, on the other side, can buy these premium inventories with the same guarantees obtained from the traditional purchase of online ads.
The real problem is that many publishers still fail to recognize that, thanks to the Programmatic Advertising, they are now able to offer advertisers effective and specific target audience from which they can monetize by increasing the cost of their advertising spaces and, consequently, their revenues.
There is a solution for publishers to increase their revenues and it is to leverage the Programmatic Advertising scalability. The more the publishers will make their target audiences effective and relevant, the higher will be the price offered by the advertisers for the purchase of programmatic ads.
Publishers need therefore to create Premium audience in order to meet the demand of advertisers and sell all their inventories. In addition they need to build a strong relationship with their partners, in order to increase the value of their data and their audiences in real time bidding scenario.
The Programmatic Advertising still has a long way to go, but its potential and its scalability is clear. We just have to wait and find out what Digital Advertising market reserves.