Programmatic? Problematic.

by Doug Weaver on March 12, 2013 at 8:22AM

Programmatic ProblematicAt the recent IAB Annual Leadership Meeting I took part in a town-hall style discussion called “Programmatic Buying from the Perspective of Premium Publishers: Value Creator or Advertising’s Borg?”  A topic like that can go one of three ways.  (1) It can turn into a festival of buzzwords and received wisdom; (2) it can quickly become a shouting match; or (3) you might just get a few little Easter eggs of clarity.  I, for one, was really delighted with the eggs.

There was some of the usual smarty pants technology stuff and more than a little bombast.  Each of four “provocateurs” (I was one) gave an opinion to which those in the room could react and respond.  And react they did.  There were strongly held positions, fear, misconceptions and strongly held positions based on fear and misconception.  Then a funny thing happened along the way.  The big point jumped out and revealed itself.  The only real problem with “programmatic” in the eyes of the premium publisher (aside from all the alliteration) is that we keep calling it “programmatic.”

The issue, you see, is the name itself.  In our efforts to slap a simple label on very complex set of topics, we’ve created a scary-sounding catch-all and larded it down with about a half-dozen unrelated and incompatible concepts.  It’s time to bury the term “programmatic” once and for all.  It’s become emotionally radioactive, it’s not instructive, and it’s not moving premium publishers and advertisers any closer to the automated nirvana we are supposed to crave.

In our discussion, there are really two issues here for the publisher:  automated process reform and dynamic pricing policy.

APR.   A huge part of what “programmatic” trading accomplishes is not controversial at all. It’s simply about automating the ‘send and receive’ part of what we do.  Why in the world would I not want to have my finely tuned, automated system receive the ads that your finely-tuned, automated system sends?  At its essence, automated process reform is simply about bringing machine-based precision to the act of trading ads for money.  Period.  Those who choose to geek out and conflate APR with RTB – real time bidding – are overreaching and doing a huge disservice to the industry.

DPP.  Once publishers have embraced APR – which eventually all will –they are then faced with addressing dynamic pricing policy.  Essentially, now that I’ve got the automated process in place to trade ads with precision, what business decisions will I make about pricing those transactions?  One legitimate decision may be to open up certain classes of inventory to RTB – or never to do so.  You may decide to withhold most or all of your inventory from second party sales channels – networks, exchanges.  You may use pricing policy or the blacklisting of certain advertisers to achieve your sales goals.  The point is, it’s up to you.  APR is not a slippery slope into RTB.  Never was.

For too long now, “programmatic” has been an intellectually lazy term; a sloppy construct that’s caused more problems than it’s solved.  Only by tossing it overboard and addressing its two central pillars do we move the development of the publisher’s automated future onto the fast track it deserves.

Reader Comments (10)

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  1. kristine welker March 12, 2013 at 12:31 pm

    Let’s stop thinking about programmatic as a problem for publishers to overcome and look at it through the lens of a platform that allows publishers to focus on people, personalization and potential to deliver content and advertising in real time based on real interest and not just serving impressions.

  2. Mike March 12, 2013 at 1:21 pm

    Great post and wise words Doug Weaver.

  3. Mark McLaughlin March 12, 2013 at 3:18 pm

    Brilliant. I will be using this column again and again!

  4. Chris O'Hara March 12, 2013 at 6:44 pm

    Great job. You captured that perfectly, I alluded to some of your comments in a similar article I wrote for ClickZ: http://www.clickz.com/clickz/column/2252576/if-its-not-programmatic-premium-then-what-is-it

    Process Reform is going to be tough and take a long time, but I think digital is getting ready to do it finally.

  5. Tom Shields March 12, 2013 at 7:59 pm

    Great post, Doug. Absolutely right that programmatic has become a sloppy construct. Seems to me that one more definition people use programmatic for is bidding, meaning the act of the buyer running an algorithm to decide whether to bid on an impression and how much. Not sure this falls under your rubric of APR, which seems more like automating processes like RFP, IO, billing, and reconciliation. Maybe it’s closer to your DPP, but it’s on the buy side. So maybe we keep programmatic to actually mean RTB, and use your terms for these other automated processes. Anyway, thanks for working to bring clarity to this, helps grow the market for everyone.

  6. John March 13, 2013 at 7:28 am

    So you took a concept and gave it two new names.?????

  7. Lee Freund March 13, 2013 at 8:10 am

    Several good points here, Doug. However, I disagree on the use of the term “programmatic”. After three years on the front lines of real time buying, I find “programmatic” captures what this is all about. It is the terms “RTB” and “automated” that are lazy and make it sloppy. Real Time Buying is not always Real Time Bidding, in many cases the economics are predetermined. People write programs. People are still needed to “program” on both the buy and sell sides . Also, as anyone who truly touches this space everyday will tell you, it is not “automated”.

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