Programmatic Direct – Everything You Need to Know

If you’re reading this, you must already know the power of programmatic advertising and love it as much as we do. With its lightning-fast automation, programmatic has made buying and selling digital ads a breeze. 

Real-time bidding (RTB) and private marketplaces (PMPs) would undoubtedly be two star players under programmatic advertising. However, there’s another player quickly rising through the ranks- Programmatic Direct.

Programmatic direct allows publishers to control ad serving with direct deals. Additionally, it allows you to utilize its targeting capabilities and improve transparency.

As a publisher, it is essential to know about programmatic direct to take your ad revenue game to the next level. Learn everything about it in this blog to earn more with direct deals and stay ahead of the curve.

What Is Programmatic Direct? (Definition)

Programmatic direct refers to the automated way of doing direct deals that enables publishers to sell their ad inventory directly to advertisers. This method gives publishers greater control over pricing and ad inventory. On the other hand, it allows advertisers to target specific audiences with tailored messages.

Programmatic Direct does not involve intermediaries like Ad exchanges. Instead platforms like Google Ad Manager (GAM) and other supply-side platforms (SSPs) help facilitate this. They help publishers sell their ad inventory by sending proposals and negotiating with the advertisers on their behalf. 

Understanding programmatic direct with a real-world scenario

For example, let’s say you run a travel website and have a page that attracts a lot of traffic. Specially, the traffic from the people interested in booking flights to Los Angeles. You can offer that ad space to a Los Angeles airline using programmatic direct. They might be interested targeting the users interested in traveling to Los Angeles. 

The airline can buy the ad space directly from you, allowing you to set the price and have more control over the displayed ads. 

This direct relationship between the publisher and advertiser ensures more relevant ads for your audience. It also maximizes your revenue potential by cutting out the middleman.

The term “Programmatic Direct” comprises two keywords – Programmatic and Direct. 

The word “Programmatic” signals that the buying and selling of ad inventory will take place using programs/software/technology in an automated manner. The word “Direct” means that this is the direct deal between publisher and advertiser.

Programmatic Direct Deal Types

The direct deals that occur programmatically through platforms like GAM and other SSPs are called programmatic direct deals.

This can be done in two ways. They are as follows.

Programmatic Guaranteed

It is a direct deal that allows publishers to sell inventory at a fixed price to advertisers in advance. That inventory is designated only for that advertiser at a fixed price. There will be no change after that.

This direct deal type will not come under real-time bidding but still leverages programmatic platform automation and targeting capabilities.

Preferred Deals

In preferred deals, the publisher and advertiser negotiate a price for ad inventory, which the advertiser can buy optionally. This is also called programmatic non-guaranteed.

When you invoke the ad request, you will prioritize the specific advertiser to bid, but they are not obliged to buy it later. 

Note: Whether you sell the inventory directly or auction it off in an open auction, you will serve the ads programmatically. That’s why the name is programmatic advertising and, therefore, programmatic direct. 

How Does the Programmatic Direct Deal Works?

Here is how the programmatic direct deal takes place:

1. Setting up the deal: Publishers and advertisers agree on the terms of the deal. It includes the inventory type, targeting criteria, pricing, and delivery schedule. 

Publishers set up their inventory with their sell-side platform (SSP), and advertisers set up their campaigns with their demand-side platform (DSP).

2. Negotiating the deal: Once both parties agree on the terms of the deal, the publisher sends a proposal to the advertiser’s DSP. 

The advertiser can then negotiate the terms of the deal or accept the proposal as is.

3. Approval and launch: After finalizing the deal terms, the advertiser approves the proposal, and the campaign is launched. 

The publisher’s SSP then sends the ad impressions to the advertiser’s DSP. It decides which ad to serve based on the targeting criteria.

4. Reporting and optimization: Throughout the campaign, the publisher and advertiser can track the ads’ performance and make adjustments as needed. 

The publisher can optimize the ad inventory based on the advertiser’s performance goals. On the flip side, the advertiser can adjust their targeting criteria to improve the effectiveness of their ads.

Fun Fact: The SSPs and DSPs are technically intermediaries. Still, they are not the same as ad exchanges or other third-party vendors that typically take a cut of the ad spend. In programmatic direct deals, the SSP and DSP are platforms that enable the direct connection between the publisher and advertiser.  That too without additional fees or commissions.

Programmatic Direct Vs. Direct Deal

Programmatic direct refers to the automated way of enabling direct deals through programmatic platforms. Publishers use programmatic platforms like SSPs to prepare proposals, negotiate, and finalize the deal. No sales team or extra manual intervention is needed here.

On the other hand, traditional direct deals are between publishers and advertisers through direct contact, negotiation, and manual insertion orders. Unlike traditional direct deals, the ad served in programmatic direct can relish the programmatic advantage of targeting and reporting. 

Programmatic Direct Vs. Programmatic Guaranteed

Because of the similar names, sometimes people think that Programmatic Direct and Programmatic Guaranteed are the same. While it is not completely wrong, it is not completely right either. 

A Programmatic Direct deal can be guaranteed or non-guaranteed (Programmatic Guaranteed is a subset rather). When a publisher guarantees a fixed volume of inventory and the advertiser agrees to a specific price and terms, it is a Programmatic Guaranteed deal.

However, if both parties cannot enter a guaranteed deal, they can opt for a Preferred Deal.

Programmatic Direct Vs. Private Marketplace (PMP)

Programmatic direct is a direct deal that is done programmatically. One publisher and an advertiser are involved in buying and selling inventory.

On the flip side, a private marketplace allows publishers to prioritize a certain number of advertisers. These advertisers will be called first for the private auction and given priority to bid on the inventory. Whoever bids wins can show their ads on the ad units. 

This is unlike an open auction, where any advertisers can bid on your inventory. 

Programmatic Direct Vs. Real-Time Bidding

Programmatic Direct is a direct deal where the publisher sells a portion of their inventory to a specific advertiser at a fixed price. 

In contrast, RTB is a type of programmatic advertising where advertisers bid on ad inventory in real-time, and the highest bidder wins the ad placement.

Benefits of Using Programmatic Direct for Publishers

The share of programmatic direct has constantly been increasing in the whole programmatic ad pie because of its multiple advantages to the publishers and advertisers.

• Transparency – Compared to the open market, the one-on-one interaction in programmatic direct brings much transparency to the process flow.
• Security – Programmatic direct deals reduce the chances of fraud, eliminating intermediaries. Sometimes, the ads are delivered directly from the publisher’s server.
• Brand safety –The advertiser and the publisher determine the campaign placement and details in programmatic direct. This assures publishers that their website has safer ads.
• Higher CPMs – The CPM is pre-negotiated and higher than the open market auction rates because direct deals are made for premium inventory.
• First-party data – Publishers remain cautious about exposing their first-party data to an open marketplace. It is safer in the close setup of programmatic direct

Challenges of Using Programmatic Direct for Publishers

Here are a few reasons why programmatic direct may not be the best option for every publisher:

1. Complex contracts: Programmatic direct contracts can be complex and time-consuming to negotiate. 

Publishers must determine the pricing, inventory availability, and other terms of the agreement, which can be challenging if they don’t have experience in the field.

2. Unfilled inventory: Publishers can still have unfilled inventory even with programmatic guaranteed. Eventually, it reduces the fill rate.

This occurs when advertisers do not purchase the agreed-upon ad impressions, leaving the publisher with unsold ad space. This can result in lost revenue and make planning for future ad sales difficult.

3. Access to ad server: Programmatic direct gives advertisers direct access to publishers’ ad servers, which can be a double-edged sword. 

This gives advertisers more control but requires a lot of coordination between the publisher and advertiser for integration. This can be time-consuming and complex, requiring technical expertise and resources not all publishers have.

4. Single channel: The publisher commits their single inventory with the single advertiser. This takes away the flexibility of having multiple demand sources. 

Also, if the advertiser cannot fill the entire inventory, the publisher has no other sources to fall back on. This leads to revenue loss.

5. Limited to big players: Programmatic direct is unsuitable for all publishers as it requires huge traffic to enter such deals. At the same time, only advertisers with big marketing budgets can afford the premium prices of direct deals.

6. Technical expertise: Programmatic direct requires certain technical expertise to set up and manage. 

If you don’t have a team with the necessary skills and experience, you may struggle to implement programmatic direct effectively. This can lead to technical issues, errors in ad serving, and lost revenue. 

Get in touch with us to connect with a monetization partner best suited to your unique ad stack needs.

How to Set up Programmatic Direct in Google Ad Manager?

If you wish to manage your programmatic direct deals by yourself through Google Ad Manager, then follow these steps:

• Ensure you have linked your primary Google ad exchange account to Ad Manager.
• Enable Programmatic Direct by going to Admin > Global Settings > Features. Find the Programmatic Direct button and toggle it on. Save the settings.
• Go to Sales > Deals Settings and create your Publisher Profile so buyers can see you in the marketplace.
• Configure your inventory types by going to Admin > Global Settings. Configuring your inventory will help your sales representatives specify the inventory type during negotiation.

Now your sales team can start sending and negotiating proposals with buyers and receive requests for a proposal from the buyers.

Suggested reading: How to Set up Programmatic Deal in GAM?

Success Stories of Programmatic Direct Deal Examples

Programmatic direct is a suitable means of selling inventory to advertisers. It extends control and transparency over premium inventory. The following real-world examples would reflect its efficiency and improved revenue over traditional direct deals.

According to a Boston Consulting Group report, publishers and advertisers save 59% and 29% more using programmatic direct than traditional deals.

The top news media, such as Postmedia and The Globe and Mail, used programmatic guaranteed for their campaigns. The Globe and Mail increased their revenue using programmatic guaranteed. Postmedia managed to save upto 60% of their team efforts they otherwise spent in traditional direct deals. 

Kijiji, the market leader in preferred deals, achieved a 30% increase in revenue through it and has grown 138% year over year. 

Programmatic direct can be lucrative when you know where and how to use it. These success stories are the best example of that. 

Programmatic Direct and Your Path to Success

Programmatic direct can be game-changing for publishers with highly engaged audiences and a large volume of ad impressions.

You can command premium prices for the premium ad spaces with brands in direct deals. It gives you greater control over your advertising campaigns. 

However, it’s important to consider the potential drawbacks, such as unfilled inventory and the need for coordination with advertisers. Auctions from ad exchanges or ad networks may better fit your needs if you’re not a big enough publisher. 

Regardless of your strategy, the landscape of programmatic advertising is constantly evolving. Staying informed and adopting the latest technologies and tools have become essential. This can be challenging if you don’t have an expert ad ops team. However, it’s very well possible to manage it efficiently if you connect with the right programmatic partner.

Finding the one partner that ticks all your requirements can be difficult. Contact us, and let us help you find the right one! A partner that helps you realize your true revenue potential with solutions tailored to your needs. 

FAQs

Q1. What is programmatic direct?

Programmatic direct is a type of ad buying and selling process that allows publishers to sell ad space directly to advertisers through automated systems without needing an intermediary.

Q2. What’s the difference between programmatic direct vs. RTB?

Programmatic direct is a method of buying and selling digital advertising inventory directly between publishers and advertisers. At the same time, RTB involves an auction-based system where ad inventory is sold to the highest bidder in real time.

Q3. What’s the difference between programmatic direct vs. programmatic guaranteed?

Programmatic direct is a method of buying and selling digital advertising inventory directly between publishers and advertisers through automated means without an auction. Programmatic guaranteed, on the other hand, is a type of programmatic direct that guarantees ad impressions to the buyer, often with fixed pricing and delivery guarantees.