The Renaissance of Advertising Networks

LONDON, BIOT - Feb. 1, 2019 - PRLog -- Programmatic, called a few years ago as "the apex of advertising technologies," is a rapidly growing market expanding 20% a year on average. eMarketer forecasts its growth will reach $68 billion by 2020.

But, despite irresistible market growth, the participants of the programmatic ecosystem face multiple problems, which may lead to new market configuration and combined selling models sooner or later.

What goes wrong?
Programmatic bottlenecks are lying on the surface for content producers which attract end-users. In this the article we'll consider all issues from the publisher's point of view.

Programmatic advertising has grown from a tiny part of a publisher's advertising activity. Just a couple of years ago top publishers received from programmatic advertising only 10% of their total digital ad revenues, according to Operative survey.

It is hard to believe, until seeing another estimation from marketing-intelligence firm Warc. It claims that of every dollar spent by advertisers worldwide last year on programmatic – just 0.40 cents on average came to a publisher. This brings us to the most natural publishers' desire: to sell inventory (especially premium inventory) on much more fair conditions. And programmatic can offer it for now.

Programmatic is not automatic
To avoid selling premium inventory via Open auctions for non-predictable results most publishers are now setting up programmatic direct or private marketplaces (PMP deals). Leveraging PMPs, publishers control which of buyers can enter their inventory and at what price. By 2019, the combined share of these two transaction types reached 80% of the total programmatic pie, which blurs the line between direct and programmatic sales even more.

From a technical perspective, publishers have two main options to join and operate at the programmatic ecosystem. Both of them are, again, far from ideal:
- To sell independently to numerous demand sources (DSPs)
- To join some SSPs and rely on their decency

Summarizing all programmatic bottlenecks above, here are approaches letting publishers sale effectively in the new market reality:
- shorten of the supply chain – the closer advertiser is – the better for all parts;
- an effective combination of different selling models (direct, different programmatic models, Header Bidding);
- financial transparency and reliable buying partners (less is better);
- simplicity in execution and management;
- wider use of non-standard creative ad formats.

A way out?
Technically, an "effective combination of different selling models" leads us back to not-quite-well forgotten waterfall model. The concept of the waterfall is in dividing publishers inventory into to multi-level slices, each of which then is sold for highest CPMs.

To manage inventory this way, publishers, again, have two options:
- To sell independently. This option is open for a minority of Top publishers who could afford own sales, tech and integrational teams.
- To join some vendor who can offer both direct and programmatic demand with transparent financial terms.

In any case, a publisher has to be armed with an effective ad serving solution allowing to build the "new-waterfall" of direct, RTBs, and Header Bidding. Perfectly tech vendor should provides publisher:
- the minimum supply chain with access to multiple demand sources
- transparent financial conditions
- different selling models: direct, RTBs (PMPs, guaranteed, open auction), Header Bidding, etc.
- opportunity to optimize all demand from mentioned sources and models semi-automatically
- support of all required media (desktop, apps, video, CTV, etc.)
- premium ad formats
- multiple targeting options
- data management tools

New ad networks approach
Before Programmatic Era, ad networks just connected the myriad of Advertisers and Publishers, acting as brokers between the supply and demand. Now, when this process was programmatically automated, some believe the role of ad networks has diminished.

But, how strange it may sounds, the number of ad networks is continuously growing. Today a combination of two is a key, as ad networks provide manual management that can't be replaced even programmatic tech excellence.

New Ad Networks place in the programmatic ecosystem
The ad network nowadays is a combination of direct management and programmatic, having in its core technology, advanced waterfall model, and support for different selling options.

For small and mid-size publishers it must become a one-stop shop, solving all their monetization issues. For top publishers, ad network becomes a provider of maximum possible services and technologies, also giving them a chance to participate effectively with their demand partners.

To meet such market expectations, a modern ad network should provide the following must-haves:
- Effective monetization
- Transparent financial conditions
- Support of all existing inventory types
- Ad serving option for publishers
- Own DMP
- Brand/inventory protection
- System accounts for SSP and DSP
- Personal assistance
- Localized (or local-based) ad networks

To sum it up
Ad networks must adapt to the new market reality, using programmatic as an additional demand source. Their primary focus should stick to technology having optimization, customization, brand safety, and localization in its core. Also, an important role remains for personal assistance to participants.

From a point of the global market, such ad networks can compete in their niches or local markets with global leaders due to closer relations with advertisers and better client-oriented approach to the publishers.

And don't let the tech-evangelists to scare you with global automation and overall programmatic-forces. There will always be businesses where a human and personalized approach is still required. Until AI will take care of everything, of course 🙂

Article originally appeared: https://blog.admixer.net/market/renaissance-advertising-networks/?utm_source=press-release&utm_medium=service&utm_campaign=article