A whole host of recent events, M&A activity, and industry articles confirm that “Automated Guaranteed” has now cemented itself in the industry as a new sector. Automated Guaranteed refers specifically to the automated ‘direct sale’ of forward guaranteed ad inventory. Instead of manually planning and fulfilling the buy (often via spread-sheets, emails and phone calls) the process for both buyer and seller is automated through a single trading platform.
The reasons why the industry has embraced Automated Guaranteed are pretty obvious when you take a look at the numbers. The global digital display media market is worth $51.8 billion annually[1]. As things stand, approximately 20%[2] of those dollars flow through existing “Programmatic channels” (i.e. the exchange-driven technology stack often known as RTB). This means that the remaining 80% (or $41.4 billion dollars) still flows through some kind of RFP mechanism.
This is a staggering amount of money being traded through what is effectively a manual process. Automated Guaranteed is fundamentally designed to address this problem. It is for this reason, that industry analysts have forecasted the Automated Guaranteed sector to grow to $4.4b by 2018[3]. It’s no surprise that Google (and others) are now trying to jump head first into this space and bolt it on as part of their overall offering.
So what does Automated Guaranteed mean for buyers?
Automated Guaranteed respects the buying status of the agency in the marketplace.
In other words, the greater the volume of media bought, the better the price. Media agencies invest hugely in consolidating their assets in order to leverage their aggregated buying power and price preference. With Automated Guaranteed, the trading relationship between the buyer and seller is reflected in the price paid, just as it should be.
Automated Guaranteed is essentially a more streamlined and automated version of the RFP process, the main benefits of this being:
- Providing the agency with complete transparency. The buyer knows exactly which properties and ad placements they are negotiating, and the seller knows exactly who the buyer is and what advertiser they represent
- Allowing pricing agreements to take effect in a seamless and automated fashion. Any inventory can be exposed uniquely to a buyer, preserving the individual buyer/seller relationships.
Automated Guaranteed enables you to buy on a forward basis.
A very important reason for the longevity of the RFP process is that media agencies prefer to trade on a forward guarantee basis. This is critical when you have clients whose campaigns require specific launch dates, delivery schedules and expected outcomes. Through Automated Guaranteed, you can procure inventory by ad units, site, timeframes and desired audience, including reach and frequency thresholds.
However, in contrast to the traditional RFP process, Automated Guaranteed enables buyers to check availability in real time, and transact with publishers in the knowledge that the inventory being traded is available at the time of trade (i.e. no more time intensive, manual availability queries for the publisher). The RFP process breaks down as soon as the inventory data is taken out of the ad server and inserted into a spreadsheet, meaning you lose your point of truth regarding availability and what you can guarantee.
With Automated Guaranteed, buyers get access to the high quality inventory.
Given the level of transparency and control available to publishers, they have confidence in exposing exclusive high impact formats, across high quality placements that are extremely unlikely to be exposed through other performance driven channels. Importantly, these placements are available with all of the various targeting options in the publisher’s ad server – all exposed directly into the buying interface for the agency. This empowers buyers to easily incorporate a range of targeting capabilities – ad units, specific audiences, and custom criteria.
Automated Guaranteed drives better results.
It does so by respecting the very human dynamic that is the bedrock of our industry. In-platform messaging means that buyer and seller can collaborate much more closely to achieve the desired outcome. In tandem, direct access to the ad server by the seller means that optimization is a far more dynamic proposition and a far more responsive process. The media schedule becomes a dynamic document as a result. So the days of change requests and optimizing via email are close to being over, for good.
Automated Guaranteed means you get more value for money.
For other ‘traditional’ forms of programmatic, the ad tech stack is bloated and convoluted, with scores of different players and middlemen. In contrast to this, the technology stack for Automated Guaranteed is much cleaner. There is a buyer, there is a seller, and there is one sole intermediary sitting between them facilitating the process. This means that a greater percentage of the advertiser’s budget is spent on media, and this produces better outcomes by default in return. Given this level of transparency, challenges around fraud and quality are entirely mitigated.
Automated Guaranteed is more efficient.
It enables you to cover more ground faster. Let’s be honest, the relentless back and forth to secure inventory can be excruciating. Finally, you secure your client’s approval and suddenly, the inventory is no longer available and the cycle starts over again. All the while, you’re losing money. This is particularly frustrating when you know what you want to buy; but can’t access it quickly. At Adslot, we refer to these types of RFPs as “transactional RFPs” – where the sale is purely a standard buy rather than a custom deal. Our research suggests that over 50% of RFPs fall into this category, which means that you are wasting your time more often than not. Through Automated Guaranteed, the trades are executed in minutes, not days or weeks. Welcome to the new era of digital media trading.
Watch out for ‘Part 2’ of this series, where we’ll be taking a look at what Automated Guaranteed means for sellers.
[1] http://techcrunch.com/2014/04/07/internet-ad-spend-to-reach-121b-in-2014-23-of-537b-total-ad-spend-ad-tech-gives-display-a-boost-over-search/
[2] IAB: Programmatic and RTB – http://www.iab.net/programmatic#sthash.XTc16EO3.dpuf
[3] IDC, 2014
