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Programmatic Reserve: The change is coming

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By Maria Flores, Vice President, Programmatic Sales, Ooyala

Excuse a moment of bluntness; if you are a premium video content owner, making programmatic work is not going to be an easy task. There are a number of different models to choose from, including direct deals and open marketplaces, but they all have one thing in common – a non-guaranteed trade. As a seller, you can never really be certain how much inventory the buyer will end up acquiring. Yet, despite this, European premium content providers saw a 119 percent increase in programmatic revenue during Q2 2015. We know programmatic can work, so how can you make it work for you?

Programmatic offers interesting opportunities to premium publishers, including higher efficiencies, the promise of access to additional budgets – such as brands starting to use DSPs for their own buys – and the opportunity to boost their CPMs for specific audiences. However, at this stage, a key motivator for the premium end of the market is the concern of being left behind. Existing buyers are shifting spend to programmatic platforms, and so publishers know they must too, like it or not.

In an ideal world, no premium video publisher would change its traditional way of doing things, and that is understandable. Publishers and broadcasters are accustomed to the established, though admittedly less efficient, IO-based models. Through these they can contract fixed amounts of volume with a buyer; they achieve business predictability and can sell without too much scrutiny from their digital audience. It’s no wonder programmatic is seen as a threat by some premium publishers, or that those who have started trading in this manner err on the side of caution. It’s natural to be resistant to placing large volumes of inventory on any SSP and relegating programmatic to a remnant game. However, some might consider this a costly mistake.

Programmatic reserve: Opportunity + control = revenue growth with efficiency

Consider this – what would happen if the industry found a way for publishers and broadcasters to benefit from the advantages of programmatic without giving up that crucial business predictability? Or, even better, what if they could build a model for achieving this without having to give intermediaries such as SSPs a percentage of their hard-earned ad revenues?

Conceptually, this is not very hard to achieve. One would just need to connect the publisher’s ad server into a buying platform (demand-side platform – DSP), allowing buyers to surface available audience from the publisher and make a guaranteed offer on it, which could then be automatically booked into the ad server once accepted. A series of controls on the part of the publisher would be necessary at the ad server level to ensure a fair negotiation, but that’s about it. No SSPs, no deal IDs, no complicated marketplaces, nothing.

This model, typically known as Programmatic Reserve, gives publishers the opportunity to tap into programmatic budgets and discover new buyers, as well as massively increasing their sales efficiency, all under a reserved, controlled environment. Buyers in turn are able to purchase audience at scale from very premium environments, which is one of the main limitations they are facing today with regard to video platforms.

The future for programmatic – a holistic ad server

Programmatic Reserve will not make unreserved buys disappear. Spot buys or spike management will always be a perfect fit for more traditional programmatic models, but it will ensure premium content is more widely available to brands on programmatic platforms as the whole industry moves towards higher efficiency and accountability. Publishers should ultimately be able to execute a holistic strategy across all these models – direct sales, programmatic reserve and open marketplaces – under one single platform. In fact, vanilla SSPs will most likely be displaced as any initiatives under the reserved realm will necessarily require access to the publisher’s video ad server, which is typically beyond their technical capabilities.

The good news for premium video publishers is that the industry is already making some interesting moves towards this vision for Programmatic Reserve. TubeMogul’s recent launch of SelectAccess, and companies like Ooyala combining its ad server, Ooyala Pulse, with an SSP, Ooyala Pulse SSP, for holistic ad decisioning and a simpler interface with DSPs make for interesting industry examples.

Up until now, premium publishers have just been dipping their toes into the programmatic pool. Programmatic Reserve should offer them the confidence to jump in with both feet.

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