What is programmatic direct?

This post was most recently updated on September 28th, 2023

Programmatic direct advertising is transforming the digital advertising ecosystem, enabling brands to make informed decisions and garner impressive results. In this article, we unravel the complexities of programmatic direct advertising, exploring its mechanisms, benefits, and best practices.

Last year, programmatic direct accounted for 68% of programmatic ad spending, with private marketplace deals at 19% and open marketplace deals at 23%.

Programmatic direct is clearly a favorite. However, what is it really and how does it even work? Let’s take a closer look to find out just that.

What is programmatic direct?

Programmatic direct advertising is a method of purchasing digital advertising space directly from publishers, leveraging automation and real-time bidding to streamline the buying process. This approach combines the efficiency of programmatic advertising with the exclusivity and security of direct deals, offering a plethora of benefits to advertisers and publishers alike.

With programmatic direct, an ad transaction or agreement takes place directly between the publisher (seller) and the advertiser (buyer) through some kind programmatic ad buying system.

Programmatic direct can also contain a variety of programmatic deals such as private auctions, preferred deals, and guaranteed/non-guaranteed deals. The image below provides more information.

With other programmatic transactions, this would typically run through an ad exchange and RTB technology would be used to bid on ad inventory such as an open auction.

Understanding the Mechanisms

Real-Time Bidding (RTB)

Real-time bidding is a pivotal component of programmatic direct, allowing advertisers to bid on individual impressions in real-time, ensuring optimal placement and pricing.

Demand-Side Platforms (DSP)

Advertisers utilize DSPs to manage multiple ad and data exchange accounts, facilitating efficient and intelligent ad purchasing.

Supply-Side Platforms (SSP)

Publishers employ SSPs to manage their advertising space inventory and maximize revenue through automated and optimized ad selling.

Ad Exchanges

Ad exchanges serve as digital marketplaces where publishers and advertisers buy and sell advertising space, typically through real-time auctions.

Programmatic direct vs. programmatic guaranteed

Both are very much the same, however, programmatic direct can contain programmatic guaranteed or non-guaranteed agreements between publishers and advertisers as mentioned above.

Programmatic guaranteed is when the advertiser (buyer) buys ad inventory directly from the publisher with an agreement for a fixed number of impressions, a specific delivery timeline, and predetermined price.

Advantages for publishers

Higher yield

• Programmatic direct helps ensure premium ad slots are filled and that publishers get higher prices for their ad inventory compared the open market.

Better control and insight

• Once a publisher understands the type of inventory and audience an advertiser is looking for, they can better negotiate prices and value their traffic.
• This also helps them with a more accurate measurement of revenue and forecasting.

Transparency

• Fraudulent traffic remains a critical issue for the digital advertising industry, and direct deals help put an advertiser’s mind at ease.
• Publishers also benefit as they gain valuable information on which creatives to serve, the number of impressions needed, audience types, and more.
• Publishers gain more control of their ad inventory and it helps them optimize workflow.

Disadvantages for publishers

No guarantee of 100% fill

• Although programmatic direct comes with many benefits as mentioned above, it does not guarantee that a publisher will sell all their ad inventory.
• Some premium publishers might have enough demand from buyers to get all their inventory sold, but it might not be the same for everyone.
• This typically results in the publisher selling remnant inventory on ad exchanges.

Direct access needed

• To execute a direct deal, a buyer would need direct access to a publisher’s inventory in some way such as their ad server through an API.
• Additional coordination and cooperation between the publisher and advertiser are also needed.

Implementing Best Practices

Embrace Data-Driven Insights:

Harness the power of data analytics to refine targeting strategies, optimize campaigns, and drive superior results.

Prioritize Quality over Quantity:

Focus on creating compelling and high-quality content that resonates with your target audience, enhancing engagement and conversion rates.

Optimize for Mobile:

Given the ubiquity of mobile devices, optimize ad content and formats for mobile users to maximize reach and impact.

Monitor and Adjust in Real-Time:

Leverage real-time analytics to monitor campaign performance, making swift adjustments to optimize outcomes.

Ensure Compliance with Privacy Regulations:

Adhere to prevailing data protection laws and respect user privacy, building trust and safeguarding brand reputation.

Conclusion

In an ever-changing digital advertising and ad technology landscape, Programmatic Direct still plays an essential role despite some challenges. It’s no wonder it’s the preferred programmatic selling method for publishers.

However, not every situation is the same in the world of online publishers. If you want to find out what’s the best way to sell your ad inventory, why not let the experts help?

Whether it’s utilizing programmatic direct, an open auction or incorporating header bidding, MonetizeMore has the solution.

Sign up for a Professional account at MonetizeMore today!