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Why Has the Market Been Slow to Embrace Automated Guaranteed?
Image Credit  Zdenko Zivkovic Creative Commons license

Why Has the Market Been Slow to Embrace Automated Guaranteed?

Programmatic media buying is seeing exceptional growth and was predicted to account for almost half (47%) of UK digital display ads by the end of 2014, but so far this automation has largely focused on remnant inventory. As programmatic technology grows in popularity, attention is gradually turning to premium inventory – in particular Automated Guaranteed. Surprisingly, adoption of this buying method has been slower than expected, resulting in disproportionately high transaction costs for agencies and publishers. 

So why has the market been slow to embrace Automated Guaranteed?

The responsibility actually sits with all three market players: publishers, agencies and ad technology companies. Here we take a closer look:

A case of devaluing inventory

Publishers have, for the most part, been reluctant to accept the automation of premium inventory due to the assumption that it will mean less-than-premium prices. Past attempts at automation have resulted in the use of poor quality inventory at unrealistic prices, perpetuating the idea that premium inventory requires high-touch selling. The fact is that automation itself does not commoditise inventory. With Automated Guaranteed it is possible to create a more scalable sales model while also retaining an accurate price level. As with any new media channel, publisher concerns will need to be addressed with the right level of executive support and matching incentives at the field level.

Buyer fears over price control

The manual processes currently used to buy publisher-served guaranteed media give buyers a certain degree of control over pricing, which they fear could be lost with the advent of automation. There is a concern that setting prices across comparable inventory will be challenging without a futures market, coupled with the belief that publishers may not always offer fair prices without tough negotiation. Times are changing, however, as more agencies turn to data science and the expertise of their media investment teams to reduce the complexity of these transactions, which in turn scales the buying process.  

Slow uptake of integrated technology

To allow full adoption of Automated Guaranteed, buying and selling systems need to be integrated to connect every aspect of the buying process through open APIs. Advertising campaigns run across multiple buying methods as well as multiple channels, so a buyer should be able to access the whole spectrum of remnant and non-remnant media buying methods from a single platform.  On the buyer side, audience data, research tools, media kits, inventory comparisons, and pricing information should integrate seamlessly with the workflow, while on the publisher side order, inventory, price, and yield management systems are all required. These technologies are all readily available in today’s market – but a greater understanding of how they work, what they can do, and how to join them up is needed.

Automated Guaranteed – like other forms of automated premium inventory buying – has been met with resistance across the industry. However, technology to automate this sector certainly exists and is not a major prohibiting factor. The main inhibitors to adoption are entrenched processes and a lack of trust between the buyers and publishers. What is needed now is a change in mind-set.

Paul Amatrudo

Paul Amatrudo

In his current role as Media Business Director, Paul Amatrudo works with media agencies and media owners across Europe, helping them grow their businesses through Mediaocean’s digital products. Paul is singularly focused on providing a superior level of service to his clients, working with agencies, advertisers, and media owners, to translate their business needs into intelligent software solutions. He comes to Mediaocean from his role as an Account Director of Donovan Data Systems (DDS) UK and Ireland, working with two of the large advertising holding companies.

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