How Programmatic takes over Direct Deals

16 March 2017

Programmatic’s victory march goes on. This time, it’s all thanks to Programmatic Direct. The new link in the ad server chain allows for programmatic advertising to get even bigger revenue. And upcoming trends promise a continuing rise.

Programmatic Direct on its way to the top

In order to optimize the revenue, publishers can use multiple options of selling their ad space: direct deal, programmatic auction and house/affiliate ads. In the past, the top priority was given to direct deals. It soon came to publishers’ understanding that this way won’t bring the highest revenue. This is how programmatic started getting more investments.

In their efforts to maximize the revenue, publishers went further towards setting control over automatic selling. It led to programmatic splitting into private and open auction. Adding manual negotiations to the automatized process has become the foundation for what we call now Programmatic Direct.

Basically, Programmatic Direct is the channel for selling the inventory by means of programmatic tools, yet with the direct communication between a buyer and a trading floor. Programmatic Direct was recognized as a missing link on the way to successful realization of programmatic technology.

The perks of using Programmatic Direct

Here we talk about simple math. Giving the top priority to a direct deal with a set price cannot create the highest yield.  As an alternative, setting a CPM floor price with an auction tied to it allows for a more profitable buy. If the direct auction brings no plus to the floor price, next goes direct deal or open auction with house or affiliate ads at the end of the line. Thus, the reason for placing Programmatic Direct over other selling option is the possibility of gaining more.

Programmatic direct vs direct deals

The popularity of Programmatic Direct is enhanced by the fact of its all-around advantages. While publishers maximize their revenue, buyers get better visibility of publishers. At the same time, advertisers can generate improved ROI.

With all these benefits brought by programmatic private auctions, direct deals seem like an outdated variant. In such context, it is important to recognize the steady rise of programmatic as early as it’s possible.

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