When programmatic burst on to the scene, it was mainly in the guise of real-time bidding, an auction system for remnant and low-value inventory that has since fallen out of favour with many big publishers.
But, though those publishers seek higher prices normally transacted through direct or human-sold deals with advertisers, auctions are still super-relevant in the video world – and can actually bring higher returns, says one programmatic platform operator.
“An auction is actually the best place to start if you have something that’s in scarce supply,” says The Trade Desk chief client officer Brian Stempeck, in this video interview with Beet.TV. “If you’re a publisher where you’ve got video inventory going for a high CPM, it’s actually the best place to run an auction.”
Why is auctioning inventory a better way to sell it? Because, like any auction, prices go up and because, like the best auctions, you can choose where to start the bidding.
“Let’s say you’re selling it for a $15 CPM and you’re sold out, that happens at a lot of video publishers,” Stempeck continues. “They can say, ‘Let’s set the floor at $15 and see what we can get above that’.
“That’s where programmatic comes in. There may be buyers on the demand side who say, ‘For this particular audience, I might be willing to pay $25’ – that’s more than the publisher got by selling it directly.”
Stempeck is talking about private marketplaces, a development on programmatic’s original auctioning ethos whereby publishers can limit who bids on their inventory and for how much, creating a rule-based marketplace that, in theory, should operate in their favour.
And private marketplaces are now more common in the video world than they have even become in display advertising, says Stempeck.
On the one hand, big TV networks are traditionally more likely to continue wanting to sell their expensive ad space directly or otherwise with strict controls. On the other, programmatic technologies now let them bring viewer data to bear on ad targeting. In the middle, Stempeck is hoping to benefit from growing consumer demand for online TV and video content.