Programmatic v. Direct? It’s Not Either/Or

Like you, we at ZEDO read all the trades every day, and we’re always amused by the constant hyperbole: programmatic buying, or RTB , is destroying premium placements. Branded content, or native ads, are the only salvation for publishers. Media buying based on personal relationships has gone away. Only ads in social streams really draw response.  You’ve seen all these arguments.

As usual, some of them are partly true, and much of  them are not. It’s never an either/or situation for either brands or publishers. The fact of the matter is that many different kinds of ad buying should and do co-exist. First of all, not every ad is a performance ad. Many brands simply want their advertising to provide “brand lift,” and others just want constant top of mind awareness. After all, we don’t buy a new car every day, but when we do each manufacturer wants us to think of its brand as the most highly rated, the most cost-efficient, the safest. For that, they will use high impact to create awareness and also use RTB to buy retargeting to interested users for weeks following the high impact.

Brand lift ads are the most suitable for direct selling at premium CPMs. They sell especially well if they are interactive, contain video that can be expanded to full screen by the viewer, slide on and off the page only when the viewer is present, or shuffle among several ads in the same space.

Our publisher partners have given us the research to prove these points. While we do serve ads globally , run an exchange,   and provide the tools for self-service selling, the publishers who reap the highest revenues are the ones that combine programmatic with premium: they reserve some of their inventory for direct sales at higher CPMs.

We have to remember that algorithms can accomplish a lot, but not everything. We are still in a period of transition, and as we continue to generate better and better data about our customers, we’ll know more about which placements can and should be premium. At the same time, brands are learning more about their customers, and will know what’s the most valuable place for them to be seen. Context will also be important here.

None of this is happening over night, and to discount the revenue possibilities of direct selling is to write off money well before its time.