Programmatic Direct: Everything You Need to Know to Get Started

If you’re here to learn about Programmatic Direct advertising, you’ve come to the right place. In the US, programmatic ad spending is forecast to grow by 24.1% and exceed $88 billion by the end of 2022. More than 80% of this money will be spent on either Private Marketplaces (PMPs) or Programmatic Direct deals. 

Why this growth? Because direct and PMP media buying offers unique advantages that open Real-Time Bidding (RTB) auctions simply don’t. 

In this article, we’ll explore:

• What is Programmatic Direct media buying?
• The differences between Programmatic Direct, PMP, and open RTB
• Why do advertisers and publishers prefer for direct deals?
• How to get started with Programmatic Direct
• Programmatic Direct case studies
• Future of Programmatic Direct advertising

Let’s get started!

What is Programmatic Direct Advertising?

Programmatic Direct Advertising, sometimes called Programmatic Guaranteed, is an arrangement where publishers and advertisers sell and buy media at a fixed price without using RTB auctions. Programmatic Direct is used by high-quality publishers to sell their premium inventory to the best advertisers. By doing so, they can negotiate package deals and sell the best ad space for a guaranteed price. In return, publishers guarantee a fixed number of impressions to advertisers.

In short, Programmatic Direct is a direct deal between the advertiser and publisher, in which the advertiser agrees to buy a fixed number of impressions on specific sites for a fixed price and the publisher agrees to provide the same. It’s called ‘programmatic’ because the negotiation and sale process is automated using an ad network, SSP and DSP. 

How Programmatic Direct Works

Until a few years ago, publishers, agencies, and advertisers used a set of ad tags to reserve inventory and budget for direct deals. Optimizations and changes were managed through phone or email. The process was effective, but slow and time-consuming. 

Programmatic Direct automates the media buying process by applying programmatic technology to direct media selling and buying. It eliminates the inefficient manual processes such as inserting tags, solving issues, reconciling invoices, and exchanging emails or calls. 

Bigger businesses that wish to advertise on multiple networks use Demand-Side Platforms (DSPs) such as SmartyAds, MediaMath, Amazon (AAP), and others. Using the right DSP, you can access thousands of direct deals from quality publishers such as Time Inc, Hulu, AOL, NBCUniversal, Business Insider, and Turner. Bigger publishers, however, have their own advertising platforms that agencies can use for programmatic direct media buying.

Types of Programmatic Direct

There are two types of Programmatic Direct Advertising:

Programmatic Guaranteed: The publisher offers a guaranteed number of impressions to advertisers at a fixed price. The inventory is reserved for a specific buyer at a specific price. The advertiser is obligated to buy the agreed inventory and the publisher is obligated to provide the same.

Preferred Deal: The publisher and advertiser negotiate a minimum price point. The buyer has the option to bid at that negotiated price when there’s an ad request for that inventory. The number of impressions is not guaranteed as the inventory is not reserved for that buyer and the buyer is not bound to secure it.

Source: DoubleClick by Google

How Programmatic Direct is Different from PMP and RTB

The key difference between Programmatic Direct and the other two types of ad placement is that Programmatic Direct has no real-time auction.  PMP and open auctions both sell inventory through real-time bidding (RTB) across a variety of platforms and networks. With Programmatic Direct, on the other hand, the advertiser deals with a single publisher or network and negotiates a fixed or variable price for a guaranteed or non-guaranteed number of impressions.

The following illustration will help clarify the difference between different types of programmatic advertising.

Source: SmartyAds

Why Do Advertisers and Publishers Prefer Direct Deals?

Programmatic Direct accounted for 58% of all programmatic display spending in the US in 2018. Direct spending continues to grow because it combines the speed and scale of programmatic media buying with the dependability and familiarity of traditional sales. 

Here are some more reasons why advertisers and publishers love programmatic direct deals:

Prestige: Premium brands want to advertise in exclusive space to set themselves apart from competitors. They don’t want to go through open bidding where a small time startup has an equal chance of winning an auction. Extreme examples of premium advertising space can include Super Bowl commercials or Time Square billboards, some of which now offer programmatic advertising.

Performance: Guaranteed Direct improves the targeting accuracy by allowing agencies and advertisers to reach their audience at granular level. Using Google Ads Audience lists, for example, you can automatically direct your ads at people based on specific actions that they perform. You can also guarantee buying for only those audiences you want to reach.

Transparency: Advertisers also prefer direct deals because they offer more transparency. There are no third parties involved so advertisers can be more confident that they are actually getting the impressions that they’re paying for.

Revenue: Publishers want to sell their top ad space to the highest paying brands that agree to buy a guaranteed number of impressions for a fixed price. They can then sell the leftover inventory via PMP or open RTB, maximizing their revenue.

Efficiency: A study by Boston Consulting Group concluded that Programmatic Guaranteed deals save publishers and advertisers 57% and 29% more time, respectively, compared to other types of media buying.

Fraud Prevention: Programmatic direct advertising is less prone to fraud than RTB programmatic display advertising. Fraudsters have created hundreds of thousands of fake websites.  Using computer programs, these scammers fill their websites with plagiarized content. Within days, the traffic goes from zero to millions of visits. Obviously, these visits are not from humans, but bots. Nevertheless, many of such websites do get accepted at many ad networks and also get ads. You, as an advertiser, pay for these fake impressions. 

Programmatic Direct on Google Display Network (GDN)

For small and medium businesses accustomed to the Google advertising ecosystem, Google Display Network (GDN) can be an ideal place to start Programmatic Direct or Guaranteed advertising. GDN reaches over 90% of the global internet users and offers the following advantages to programmatic media buyers and publishers:

Guaranteed Impressions: Buyers can attach their first-party audience list to a proposal when they start negotiating. Publishers can automatically forecast and match inventory to the list before they finalize the deal. The buyer only pays for the impressions that match the first-party user list.

CPD and Custom Creatives: Buying and selling rich media non-standard creatives and cost-per-day (CPD) sponsorships using Programmatic Guaranteed.

Programmatic Direct Marketplace: Advertisers can access Publisher Profiles and learn more about a publisher’s audiences and inventory and send RFPs directly to publishers.

Variety of Ad Formats: GDN supports display, video, App, Native, and custom rich media ad formats. You can also use guaranteed deals to create advertising Roadblocks by serving multiple ad creatives to the same page at the same time.

Improved Campaign Management: Using a single platform to transact open RTB and programmatic direct deals allows advertisers to control the reach and frequency of their ads more effectively.

Comprehensive Reporting: Google’s Programmatic Guaranteed is fully integrated into Ad Manager (previously DoubleClick), so advertisers and publishers can manage all aspects of their deals from within the Ad Manager dashboards, including comprehensive Programmatic Guaranteed performance reports.

Getting Started with Programmatic Guaranteed on Google Ad Manager

Ad Manager is an ad exchange program Google introduced back in 2018. It combines the features of DoubleClick for Publishers and DoubleClick Ad Exchange, which previously served as Google’s SSP and DSP.  All Ad Exchange features, including Programmatic Direct, are now available in Ad Manager. 

• To turn on Programmatic Direct in your Ad Manager account, navigate to Admin > Global Settings > Features. Click to activate Programmatic Direct and click Save.
• Once you activate programmatic direct, you cannot turn it off, as the option is hidden after saving.
• Publishers should go to Sales > Deals settings to set up their publisher profile and buyer visibility. 
• Buyers can find direct deals in the Marketplace and send RFPs for inventory they are interested in buying.

Your programmatic agency can handle the fine details allowing you to access the most lucrative direct deals as a buyer and be visible to the best buyers as a publisher.

Should You Go For Programmatic Direct?

The decision to adopt Programmatic Direct as a marketing strategy boils down to a cost benefit analysis of buying premium inventory often at a higher CPM than open auctions versus the short and long term advantages of investing in such guaranteed inventory. Bigger businesses that have plenty of resources to invest in brand building should not think twice. 

For small and medium enterprises or startups, however, the decision to invest in programmatic direct advertising depends on their marketing strategy. And programmatic direct is an option that every business would need to consider at some point. Has your business reached that point yet? Josh Meah and his team can help you figure out. Let’s talk!