Programmatic: Data, Consolidation, Direct Deals Are Trends

Author: Tobi Elkin   Source: MediaPost

Industry consolidation, the importance of data, ongoing tech and platform integrations, programmatic direct deals, and native advertising were highlighted as trends during a Wednesday Advertising Week session.

Yahoo’s Tod Sacerdoti VP, display & video ad products, pointed out all the consolidation occurring in the programmatic ecosystem, citing trends at Google, Facebook, AOL, and Yahoo itself. Sacerdoti came to Yahoo when the company acquired BrightRoll in late 2014.

BrightRoll is a programmatic marketplace that consists of the BrightRoll Demand-Side Platform (DSP), and the BrightRoll Exchange, an exchange where third-party DSPs can transact in display, video, and native advertising.

Sacerdoti noted that while integrations are hard and imperfect, they’re not impossible. By Q1 2015, all of Yahoo’s audience data was integrated with BrightRoll, followed by third-party tools in Q1 2016. Then native advertising inventory was integrated, and programmatic premium inventory was launched in the summer of 2016.  He considers programmatic premium the most valuable ad units.

Through its programmatic premium focus, “Yahoo has benefited from higher-quality inventory,” he said. Further, Yahoo invested in Deal ID, which offers the ability for DSPs to transact on specific inventory that is uniquely packaged. More than half of all impressions on the BrightRoll Exchange are transacted via Deal ID, he said.  

Sacerdoti is most bullish on native advertising running on Yahoo properties. More than 50% of all Yahoo inventory is now native, he said. And, a “large percentage” of Yahoo’s native units are performing better than more traditional ad units.  “The next major growth driver in the programmatic ecosystem will be native,” Sacerdoti said.

He also cited the fact that marketers are increasingly wanting to use data in more nuanced ways, soYahoo is using intent and purchase data to do lookalike targeting on behalf of advertisers.

While the issue of Yahoo’s data breach didn’t come up, the subject of data was in the forefront of the discussion. “Data is the most important thing in programmatic. The premise [with programmatic] is precision -- and for that, you must understand the audience. You must know who you’re targeting,” said Oleg Korenfeld, EVP, ad tech & platforms, Mediavest/Spark.

Korenfeld said marketers need to own their own data and that knowing how to use their first-party data is important. However, it’s not typically scalable, so marketers need to use second-party data from publishers, and other data sources. But first-party data can be used to plan and model.

In response to a question about consolidation from Lisa Utzschneider, Yahoo’s chief revenue officer, Korenfeld said: “I can see how hard it is to bring platforms together, but consolidation is inevitable. Marketers need to reach the same user across multiple platforms and devices. We look at audience, media, and then creative.” He stressed the need to have personalized messages.

In the future, Korenfeld said that not all media will be bought programmatically. “We will apply data to decide who to show custom content [and messages] to, but it won’t be 100% programmatic.” Sacerdoti agreed that not all media will be bought programmatically in the future.

Utzschneider asked whether the industry is getting to a place where customer relationships don’t matter. Korenfeld argued that you can’t remove people from the process. Relationships are “critical” and “you can’t automate them.”

Korenfeld’s advice to CMOs is to understand their ad-tech stack and ask themselves whether they need what they have. “We’re overbuilt. Evaluate your ad tech stack and make it simpler. You need to duplicate the user across multiple platforms, and then you won’t have to buy as many impressions,” he said.

His second piece of advice was that marketers should invest in their own data and own it: “Don’t trust others. Ownership of the data is important,” he said. 

Third, programmatic direct deals will be a big piece of the media future. “If we want to understand the user before we expose them to a message, we need to understand reach and frequency and buy that user at different price points, whether bidded or guaranteed. Programmatic direct will be really big for us,” Korenfeld said.