Despite Deal ID's elevation to buzzword status in recent months, it's pretty clear there is some confusion over what it actually is, why it should be used, and why exactly should we care? Angelique Reijm, Improve Digital, director of yield management, offers some insight into one of the programmatic industry's hot topics of 2014.

What is a DEAL ID?
Deal ID, which has been in circulation within the programmatic space for the past two years now, is fast becoming a hot topic of conversation among publishers, demand partners, agencies and friends in the media over the last two months.

First, it might be helpful to explain what a Deal ID actually is and why it was needed in the first place.

Deal ID is short for 'Deal Identifier', the unique number given to a direct ad buy done via programmatic. That number is used to match buyers and sellers individually, based on a set of criteria negotiated beforehand. This could include the minimum bid price, type of ad units, first-party data and position on the publisher's site, among others.

It was introduced to enable the full spectrum of advertising deals to take place within programmatic channels, and ultimately to give buyers and sellers more flexibility and control. In using programmatic, publishers have always been able to sell their inventory to thousands of buyers via RTB; but with the introduction of Deal ID, it enabled a direct deal between one publisher and its preferred buyer based on specific criteria and objectives. Direct buys using Deal ID have also been known to command CPMs that are up to three times what the open market does.

The challenges of DEAL ID
Sounds good, right? However, Deal IDs are not without their challenges, as Andrew Casale, Casale Media, VP of strategy, highlights in a recent AdExchanger article: "The problem with Deal ID is that everyone hates its cumbersome nature. Programmatic is supposed to bring automation and ease to ad buys, but the process of executing a Deal ID is at times even more arduous than the old IO (Insertion Order).

"As it stands, the publisher creates a Deal ID, a unique number, and passes it manually to the buyer via a spreadsheet or email. Then the buyer manually inserts the number into their DSP to execute the buy. Assuming nothing goes wrong in the act of setting up a Deal ID - and things often do go wrong - the real problems start."

There are also a number of other challenges to overcome. Publishers have less control when approving campaign material before it goes live when using Deal ID. A lot of trust has to be placed on the agency to respect the T&Cs in the IO, and in here it is more difficult to track changes.

In his article, Andrew Casale mentions that the human error rate is extremely high: up to 50%. Deal ID also has restricted pricing rules, with CPM being the only available pricing model. Guaranteed deals are also difficult to manage via Deal ID as inventory can be easily "ignored" by a buyer, or buyers put in a bid that simply does not respect the price agreement. For example, as a buyer you simply do not bid if the audience doesn't meet your requirements. This is further complicated by the simple fact that not all DSPs currently support Deal IDs.

For these reasons, Deal ID has its detractors. Those who do use it, and have seen its benefits, seem resigned to its cumbersome nature. Without a doubt there are challenges to overcome, and the industry needs to work together in order to streamline this protocol to ensure direct buys are a viable and profitable option for publishers and advertisers. However, there are technology partners who have spotted these issues in advance and have created alternative solutions.

At Improve Digital, we have seen 467% growth in Deal ID year-on-year, and we will continue to support its use going forward. However, at the start of this year we also launched an alternative to the Deal ID, Private Dealing Room.

Private Dealing Room lets publishers automate direct premium campaigns via our 360 Platform, offering all of the benefits of Deal ID while stripping out its problems. It also has the benefit of allowing for a holistic optimisation approach, giving the media owner greater control over inventory allocated to a given campaign.

Perhaps most importantly, we have seen that these alternate approaches simply work. By adopting a holistic programmatic yield strategy, one of our publisher partners in Belgium saw a 337% increase in revenue, and eCPM increase of 100%.

Central to this strategy was employing our alternate solution for Programmatic Direct business, allowing the kind of connectivity Deal IDs provide while keeping controls in house to ensure flexibility when it came to inventory allocation and campaign optimisation.

The final word

The programmatic market has reached critical mass more quickly than many imagined, and it is reshaping the advertising landscape as we know it. The future of media sales depends on automation, but for that future to remain bright it's important that traditional barriers between premium and non-premium inventory disappears. The market is too competitive and holistic optimisation is too important to the publisher bottom-line.

As bigger budgets move into automated channels, it will become impossible to manually optimise inventory across the thousands of advertisers out there. In order to maximise revenue, it's important for publishers to open up to programmatic, but at the same time maintain a direct connection to their biggest buying partners. Technology can automate our more mundane tasks, and create efficiencies, however the human element will always be critical in this business. Deal ID, and the consideration and adoption of more powerful alternatives like Private Dealing Room, can help us achieve that.