Google: “Programmatic” is all about the buy-side

Did anyone else think yesterday’s virtual “hang out” with Google’s Scott Spencer was fascinating?

First of all, where was he?  Was that a jungle or a conference room?

More importantly though (much more importantly), did anyone else find Google’s definition of programmatic a little lopsided?  According to Scott:

  • “We define [programmatic buying] based on the fact that the buyer gets to define the targeting”
  • “The ability to not buy is a critical attribute to programmatic buying”

This is a fair characterization of RTB as it exists today, but defining the entire Programmatic market this way isn’t exactly seller-friendly.  The real eye-opener for me though was the response to a question from the audience on delivery guarantees (good question, Tom!).  Scott made it clear that in the context of Programmatic Reserve, any delivery guarantees should only go one way.  So for Google, a programmatic delivery guarantee means that the seller guarantees they will provide the inventory, but the buyer doesn’t guarantee they will buy it.

Huh?  You have to admire the frankness, but if I was a publisher I’d be very concerned about that perspective.  I think for programmatic reserve to “really happen” it’s going to take a much more balanced approach that addresses both buy-side and sell-side needs.

What do you think?

About Andy Atherton
I am currently an SVP at AppNexus. I previously spent four years as COO and cofounder of Brand.net, a pioneer in programmatic reserve technology and leading digital media buying solution for top brands. Prior to Brand.net, I was Vice President of Pricing and Yield Management for Yahoo!, responsible for maximizing monetization of a global portfolio of display inventory worth $2B annually. Beginning in 2002, I created, developed and globalized Yahoo’s PYM function over a period of five years. Prior to Yahoo!, I was president and cofounder of Optivo, a venture-backed start-up that developed price optimization software for e-commerce retailers. More on LinkedIn...

4 Responses to Google: “Programmatic” is all about the buy-side

  1. I missed the hangout. For certain most of the investment has been around the buy side. It’s called RTB not RTS right? And results so far for the sell side have been less than impressive. Again, I missed the hangout so did not see the question, but think about it this way. Every deal is cancellable by the buyer (at the extreme is the IAB 14 day out vs programmatic’s instant pause button). Could be as a hedge against performance, could be for things out of the end buyer’s control. I don’t think it’s realistic – exceptions for proven partnerships and creative deal terms aside – to think that buyers will move towards guaranteed buying commitments en masse.

  2. btrenda says:

    I missed the hangout also… But this is part of why Google is not going to be a relevant player in bringing programmatic efficiencies to the buying and selling of true premium in the near-term. With apologies to Eric, Google, and the 1000 other companies represented on the Luma/remnant ecosystem chart, handing a publisher a tag without a guarantee of fill renders the tag (or the virtual tag) useless for premium. By necessity, this tag will be treated as remnant. Yes- by necessity. Think about it: why would the primary publisher ad server ever call the “guaranteed” tag that Scott is advocating if it has the chance to serve a true guaranteed tag first? It never would. And because some users look at one page and others look at 100 pages, you can see why some users just don’t make it into the programmatic space as defined by google/ ssp’s/ exchanges/ dsp’s/ networks. You’ll find those users on yahoo mail or other high frequency placement, but you won’t find them in RTB on the best sites. You can not access true premium inventory in RTB/ provate exchanges/ direct deals. Full stop.

    In google’s case, this is fine because it wants to create a world where everything is biddable. Auctions are in Google’s DNA dating back to the early days of paid search (well, sort of– they paid off a patent infringement lawsuit against overture for blatantly copying this model originally, but that’s another post).

    Think about it– what other industry sells a perishable product entirely in a spot market? Futures markets exist for a reason– buyers need assurance of delivery and quality, and producers need to understand demand and ensure there will be a market for their product before it perishes.

    Does anyone care today? Yes, they do– but they will care more in the future. Right now digital is a small percentage of a large brand’s overall spend, and programmatic is a small piece of a small piece. Programmatic isn’t driving any large brand’s bottom line today, and delivery/ quality problems aren’t negatively affecting their overall businesses (yet).

    But as media becomes more digital, and digital becomes more programmatic, it’s naive to think that the largest buyers and sellers won’t want the advantages they currently enjoy with direct buying and selling. Those needs don’t go away in a programmatic future.

  3. @tshields says:

    Yes, I thought it was fascinating too, and glad you appreciated my question. Love your point that the guarantee only goes one way – just reinforces the imbalance. As you suggested a while ago, maybe it’s time to lose the word “programmatic”?

  4. Pingback: Oxyfish » Blog Archive » Let’s Not Expand ‘Programmatic’ To Include Everything - Yieldex CEO Tom Shields' Blog

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