Programmatic: RTB versus direct

By AdNews | 21 July 2020

Programmatic advertising is the automated buying and selling of online advertising.

With more marketers turning to this automated way to buy advertising, AdNews teamed up with PubMatic to break down the best way to buy inventory for a campaign.

Speaking in A Marketer’s Guide to Programmatic, PubMatic director of ad solutions APAC Natasha de Mallet Hawes says real-time bidding is one way advertisers can purchase inventory with publishers.

“Real-time bidding refers to the buying and selling of online ad impressions through real-time auctions,” de Mallet Hawes says.

“If you go onto any web page that you normally do on a daily basis, in those couple of seconds it takes everything to load, that's when all this decisioning happens.”

As an ad impression loads in the web’s browser, she says that the information on the page and about the user is passed on to a technology platform called a supply-side platform (SSP) like PubMatic.

The platform then auctions it off to the highest bidder.

“The winner's ad is then loaded into the web page nearly instantly. So think of it in a similar way to eBay, in the sense that there's a product that people want to buy,” she says.

“In this case it's an ad, and in front of a specific user. And they enter into a bidding war in order to win the product. And then obviously when it comes down to it, the highest bidder wins.”

The other way programmatic can be bought is through direct.

This means the advertiser buys the inventory directly from the publisher, much like is done in traditional advertising.

Cara Walsh, director and consultant of Cobble Hill Consulting, has been working with programmatic since it first began over in the United States, helping AT&T launch its first programmatic ad platform (now Xandr).

She says that programmatic direct is a good choice for traditional marketers looking for more control as it is guaranteed.

“You know what you're going to get. So I think a lot of the more traditional marketers like that because they know they're going to spend this amount, they know where it's going to appear,” she says.
“There's a bit more brand control. You know the publisher that is going to be showing your ad as opposed to kind of going out there and not sure what article or what website your ad might be on.”

When it comes to deciding between RTB and direct, Walsh says marketers should decide based on their spend.

“If you're a large marketer, you should probably look at maybe playing in both of those, but if you're a smaller marketer, I think RTB might be the way to go to find the people that you need,” she says.

Patrick Darcy, chief data and technology officer at Dentsu Aegis Network ANZ, says RTB and direct aren’t necessarily “mutually exclusive”.

Rather it comes down to the campaign requirements and supply available.

“In the majority of campaigns we run today, we'll use both on a campaign. Fundamentally it's a question of how limited is the supply that you want to get access to,” Darcy says.

“If you're talking premium video, BVOD at certain times, your ability to access that outside of a direct buy is hard, and so publishers will require you fix a higher price and guarantee you'll take a certain amount of impressions from them because there's a lot of competition in the market.”

In this case, he says it means more of a marketer’s buy will do towards direct.

For the most part though, agencies will generally use both RTB and direct in client campaigns.

“We use both in all campaigns, and it's a way to offset delivery risk,” he says.

“You shore up with direct inventory that you know you need to presecure, but you offset that with targeting in the open marketplace as well, which just gives you a little bit more efficiency and potentially reduces your net cost.”

A Marketer's Guide to Programmatic is presented by PubMatic and powered by Redback Connect.

Missed the webinar? Watch it on-demand HERE.

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