Automated Guaranteed. Part 2: What does it mean for sellers?

In an earlier article, I discussed Automated Guaranteed, the new form of programmatic buying that specifically refers to the trading of digital media inventory on a forward guaranteed basis, and what it means for buyers. Greater workflow efficiency, better campaign results, and access to the best available inventory were just some of the key benefits highlighted.

In the short time since the last installment, the Automated Guaranteed perception has shifted from being a subset of ‘Programmatic’ {Defined by the IAB} to being a primary vehicle to re-engineer the $51 billion global forward guaranteed segment which, for the most part, is still traded manually.

Before we dive into the benefits for sellers, it’s worth quickly revisiting exactly what the definition of Automated Guaranteed is in its current form.

‘Automated’ is about adopting technology to underwrite the entire end-to-end campaign life cycle from inventory discovery to briefing to trading, order execution and billings reconciliation. It does this through direct integration with the Publisher ad server. ‘Guaranteed’ means that the buyer and seller are trading on the basis of known inventory i.e. from a known site, at a known price and, of critical importance, on a forward guaranteed basis.

So what are the advantages of this form of trading for sellers? In some respects, this is an easier piece to write. Partly because the arguments are the flip-side of those for the buyer but primarily because the value proposition is probably even stronger.

Automated Guaranteed means more of the Advertiser’s budget is invested in media

Much has been made of the middlemen that take a piece of the pie in other forms of programmatic buying. According to a recent Interactive Advertising Bureau report*, Adtech interventions comprised about 55% of programmatic revenue, with only 45% reaching publishers. In AG, there is one middle man and the cut taken is a tiny fraction of the 55%, meaning that the Publisher gets a significantly bigger piece of the pie – as they should.

A couple of years ago, Adslot undertook research into the number of iterative steps required on average by a Publisher to sell inventory through the RFP process. Astoundingly, the answer was 47. Like the airline industry, the AG workflow is very simple. The buyer selects the inventory that is right for them and all the seller has to do is confirm that whether they are happy to accept the transaction or not at that price by clicking a button. Without question, this is the most efficient transaction mechanism for trading premium inventory available in the marketplace today.

Automated Guaranteed builds better relationships with buyers

Other forms of Programmatic trading would lead us to believe that relationships are not important, that all inventory should be handed over to the machines and they will take care of everything. As such, transparency and trust are found to be consistently wanting. The reality is relationships are important and effective sales people understand the detail of a client’s requirements and how they can best be met.  In this context, AG is the enabler. The direct relationship remains firmly intact but the technology injects huge efficiencies into the process. As a result, sales teams are able to invest more time in solutions and less time managing process that delivers no incremental value to the advertiser.

Automated Guaranteed will deliver new Advertisers to Publishers

As buyers become more accustomed to trading in this way, it will increasingly deliver new advertisers to publishers. The reason for this is that it represents a genuine marketplace where many-buyer-to-many-seller relationships are formed. Open RTB did this for remnant inventory and monetised inventory that would have otherwise gone unsold.

Automated Guaranteed extends the value proposition from increased efficiency to increased effectiveness

Automated Guaranteed delivers better results by making the optimisation process far more effective. Direct connectivity between the buyer’s media schedule and the Publisher’s ad server means that optimization is a dynamic proposition, far more responsive and delivers better results. In-platform messaging means that buyer and seller can collaborate much more closely to achieve the desired outcome.

Automated Guaranteed provides greater controls over pricing

Much has been written about the impact that the advent of exchange-driven programmatic buying has had on pricing in the digital media marketplace with RTB fondly referred to by some as ‘Race to the bottom’. This may be a bit of an exaggeration however there are few who would argue that most forms of programmatic buying stack the cards in favour of the buyer. In contrast, Automated Guaranteed puts much greater control in the hands of the Seller or, to be more precise, value is determined by both the Seller and the Buyer in collaboration. For Publishers who invest in content this is of critical importance as this underwrites a sustainable business model.

The greatest challenge for most Publishers recently has been that the industry has become highly adept at valuing audiences and, in doing so, the pendulum has arguably swung away from the value associated with context and environment. Automated Guaranteed restores some of that balance, providing Publishers with a channel through which to monetise their inventory efficiently but at a price point that enables them to sustain a viable business model.

  • Enabling Sellers to package, price and negotiate the sale of as much inventory at the best price
  • Providing the confidence to list quality inventory, and controlling who sees what and for how much
  • Doing so on a forward guaranteed basis delivering revenue certainty for the Seller

Automated Guaranteed gives publishers the confidence to offer quality inventory

In many respects, this is a corollary of the previous points. In other words, because it enables publishers to efficiently trade highly targeted products to known advertisers at a price point they control, they have the confidence to expose their best inventory. Moreover, it is exposed to the buying community in a way that enables them trade it in either a strategic or highly tactical and responsive way.

This is vitally important to attracting and retaining brand advertisers who want to ensure that their brand is only seen in, and therefore associated with, high quality environments.

Automated Guaranteed enables publishers to monetise their inventory efficiently

An obvious analogy to the evolution of trading digital media through RFP to AG is the airline industry. It wasn’t so long ago that, if you wanted to buy an airline ticket, that you had to visit a travel agency to ask what was available and after many hours of discussion and back and forth, you would acquire your ticket. Now of course, you can see all available airline inventory and cherry pick the ticket that’s right for you and the process is executed in minutes. AG delivers the same evolutionary leap but to the digital media industry.

Automated Guaranteed enables Publishers to sell highly targeted products specific to their Advertisers’ needs

First and foremost, all of the targeting capability that resides within the Publisher ad server can be exposed to the buyer. If not with our competitors, then this is certainly the case through Adslot. This means that discreet products can be created and sold around socio-demographic profiles, geo-location, and keyword targeting. Going one step further, publishers are able to generate behavioural audience segments using data generated within their own DMP, and also expose those as tradeable products.

For the true potential of the forward guaranteed market became a reality, the industry needs purpose built technology that brings greater efficiencies and reliability in the packaging, pricing and collaborative controls for both parties.

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Contact

Andrew Perry, Managing Director UK
andrew.perry@adslot.com

About Adslot

Adslot’s mission is to automate the trading of forward guaranteed display advertising, referred to as automated guaranteed. Our leading technology is a purpose built, global media trading platform. Adslot benefits a global community of media buyers and sellers, including media agencies, publishers and advertisers, by providing trading efficiencies and effectiveness.

Adslot is a global organisation with operations in US, UK, Australia, New Zealand, China and Germany, and is headquartered in Melbourne, Australia.