The digital advertising market is rapidly becoming more automated, more data-driven and interconnected — but what are publishers and agencies doing with this today? Are they adapting, and if so, how? What are their attitudes towards this opportunity and what are the barriers to doing things differently?

Improve Digital asked FaR Partners to conduct a qualitative-based research study in the UK to provide a market wide view of Programmatic Buying and Real-Time Advertising trading from a publisher and agency point of view. FaR Partners conducted the qualitative research through their agency and publisher panels. Market benchmarks and insights are aggregated, evaluated and summarised in this report.

Current Publisher Approaches & Attitudes Towards Programmatic Advertising

A sizeable number of publishers still see the sales model as split between a direct sell and programmatic sell. They see the Supply Side Platform (SSP) role as managing standard display inventory, predominantly for unsold inventory, and their role is handling the direct sell for all their premium and non-standard activity.

However, amongst the more progressive publishers, there is a vision for all of their inventory to be traded programmatically. They believe this will take some time, as it will require both publishers and the market to evolve, but that they and the market are clearly headed in this direction.

The Challenges Faced by Publishers in Their Programmatic Development

The unlocked potential
Many publishers are just using their SSP to drive remnant. They are not fully engaged in using programmatic to improve the cost of sale and increase yield across all inventory. Programmatic buying is not seen as a core factor at the moment, but most people see cost savings in the long run.

Today, yield seems to be the most important factor for premium vertical content publishers and because they largely see it as a remnant channel they are not realising that yield opportunity. Beyond this issue it is largely about protecting their brand and direct sell rather than growing the market opportunity.

“Management are really not into structural change, they’re very resistant to embracing programmatic beyond just remnant.” - Sales Manager, Online Publisher

Old habits die hard
Many publishers have inventory that is sold exclusively as a direct sell, that they don’t ever see going through platform trading. A sizeable number of publishers don’t have a strategy for up selling the value of their inventory programmatically, yet. Resistance to change is mostly coming from the decision making structure of publishers which is made worse by a lack of resource and skills within these companies.

Therefore, it is vital that the market supports their development through education and the development of standards to enable the establishment of a value-based market in order to aid their transition into this new market.

“To change providers we’d need face-to-face meetings and a lot of help setting up, because eventually the management would come in-house so we’d need a degree of hand-holding to start.” - Sales Manager, Online News Publisher

Lack of standardisation in programmatic has a clear impact on market growth
Currently, there is limited standardisation around data or placements. As different providers have different approaches and standards, it is hard for publishers to supply the data or placements in a uniform way across demand sources. Consequently, a test and learn policy has been implemented concerning data. Due to the fragmentation of the market, Private Marketplaces are common place.

The true programmatic brand opportunity for publishers according to the demand side

For agency trading desks, there is a clear market gap and challenge due to constrained supply from trusted publishers with a quality audience.

Advertisers want to ensure that their brands are associated with the right audience and environment, contributing to an agency fear that they cannot control these environments.

There is also clear demand and attributed value for publisher audience profiles and data. This is again driven by a lack of supply as many of the trading desks’ current data suppliers aren’t delivering the quality of data profiles they require.

This presents an opportunity and area of strength for the publishers as their role is to provide quality audiences that deliver consistent and trusted patterns of behaviour. As the market evolves demand for this will only grow, especially as it’s very challenging for the demand side to source this data elsewhere in the market.

"Publishers will definitely retain an important role, they’re the ones with the content. They’ll change the way they sell it, but that’s not a bad thing.” - Manager, Major Agency Group/ATD

Conclusion: Publisher Opportunity to Bridge the Gap

This survey shows that there is high demand for the quality environments and audiences that publishers are best placed to deliver and that the demand side also sees publishers as having a clear role in brand activity that is run programmatically. However, many publishers are still approaching programmatic as predominantly a remnant channel and it’s this approach that is restricting publishers’ ability to meet demand for more premium inventory and audiences.

In order for publishers to be able to effectively and safely address this market demand, two key developments need to occur:

1) The market needs to develop tools and standards that ensure that publishers (and the market in general) can sell their inventory in a transparent way and at rates that are sustainable.

2) Publishers need to adopt more of a strategic approach to the programmatic market as this will enable them to provide the inventory, but also the confidence to layer in audience data if they can manage and control at source.

The good news is that the stages to delivering this type of marketplace are already happening. Publishers are transitioning from a remnant approach into Private Market Place trading, which gives them the controls and therefore confidence to provide the inventory the market requires, delivering the environment that provides the appropriate protection and transparency for all parties.