Over the course of the pandemic, programmatic advertising proved to be a flexible and agile medium and stands to rebound in 2021. As advertisers quickly pulled their digital spend because they could realize the immediate impact, they just as quickly returned to programmatic for the same reason. This new appreciation for the flexibility of digital media will now also be the expectation in the coming year. But will this need for flexibility affect how US Programmatic ad spend is transacted? Let’s take a look at the forecasts for programmatic direct vs open market spend.
What is Programmatic Direct?
Programmatic ad buying is the process of fully-automated, real-time bidding that purchases ad inventory in an auction. With programmatic direct, the advertiser buys the ad space without bidding. The advertiser and publisher work directly to set up a deal for the inventory at an agreed-upon price, volume, and time period.
Pros and Cons of Programmatic Direct
Advertisers find value in programmatic direct deals because it gives them control over the inventory they are buying. Not only are they able to target more valuable ad units (ie high viewability, rich media, etc.) but they are able to better control targeting needs and brand safety.
Direct deals offer publishers higher yield and increased transparency. Advertisers are willing to pay higher CPMs for premium inventory and guaranteed ad impression volumes.
The biggest downside is that these deals are more difficult to seal, as advertisers require scale and volume to get their attention, and publishers smaller than Comscore 500 have difficulty in attracting advertiser attention. As a solution, publishers can “pool” together their inventory into deals that offer the premium CPMs for them, and the scale that advertisers need to devote the time and resources to putting these direct deals together. At Adapex, we have pooled our 500+ publishers into a unified pool of inventory, and through our partnership with DSquared Sales, we are able to package and sell publisher inventory on all sites of all sizes. In programmatic direct, there IS power in numbers.
What Does This Mean for Publishers?
In general, the outlook is good for publishers as overall US digital display ad spend is forecast to grow 24.1% in 2021, per eMarketer. In the same report, eMarketer breaks out ad spend by transaction. And while this chart shows the majority of dollars in Programmatic Direct it is skewed by social media networks and mobile inventory.
Taking out the mobile inventory shows a more even distribution of display ad spending.
The bottom line is to maximize your monetization and drive revenue, understand everything you can about the value of your inventory. Direct deals provide insight into what advertisers are looking for and what they’ll pay for it. This brings guaranteed CPMs and premium advertisers to your site.
For programmatic buys, the right header bidder technology drives revenue by maximizing auction dynamics to collect the highest bids and thus CPMs. So being able to take advantage of both gives publishers lots of options for higher yields and greater fill.
Adapex Can Help
Working with experienced adops professionals can help you hit on every aspect of your monetization strategy. Adapex has a custom, best-in-class header bidder solution that will get you the most from your header bidding to drive those revenues. And, through our partnership with DSquared, we are able to pool and package inventory across 500+ sites and 20B monthly impressions in order to provide the scale, volume, and precision that advertisers need to secure Programmatic Direct deals.
In short, we offer our publisher partners one-stop shopping for all your monetization needs. Are you interested in a complete partner who will work with you to maximize every revenue opportunity? Let Adapex work to take your revenue to the top in 2021.
