Programmatic vs Direct Advertising: What to Choose?

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Programmatic vs Direct Advertising: What to Choose?

It’s quite tough to make a list of terms in digital advertising, or in general ad tech, that doesn’t include the word “programmatic.” Programmatic advertising is the trend right now, and it is worth all hype. If performed right, this automated ad selling and buying method increases programmatic revenue and saves time.

Programmatic advertising offers some extraordinary benefits but, does that mean the days of direct ad buying are over? Of course not. Direct ad buys are to date a profitable way for publishers to generate revenue and for advertisers to convey their messages to the right audience.

So, in the programmatic vs direct ad match, who is having an upper hand? A direct answer to this would be easy but that’s not how the ad tech industry works. There are some complications here that call for a discussion. So, let’s dig in and discover what works the best between programmatic and direct media buying.

What is Direct Buy and How Does it Work?

Direct buying has been in the online advertising strategies since the beginning of the Internet. The definition of a direct buy hasn’t changed in three decades: it includes tracking down the right publisher, negotiating the cost, creating inventory, and the final result leads to the ad being placed on the chosen medium.

This process is manual and requires human interactions. This is just like any other sales method. The price is not determined, as it is finalized during negotiations with each new digital publisher. It is important to note that direct sales results in higher CPMs, all thanks to traditional placement selection, hence a “perfect condition” for that advertiser.

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Advantages of Direct Buying

Does direct ad buy still exist? Of course, It does. So there must be some other reasons why direct ad buying has been there for around so long. It’s mostly about customization in display advertising. Contrary to this, programmatic advertising is all about speed and efficiency, with lesser customization options. So, if an advertiser needs something big and unique for their contextual advertising plan that shines out, or the publisher is sure this is the perfect way to invite revenue, then there are advantages to buying direct.

Direct ad buying is also a publisher’s key to inviting big brands with huge budgets that are challenging to come by in the programmatic era at this stage. International brands generally have reliable publishers and for the smaller ones, it will be a tough time to get there

What is Programmatic Ad Buying and How Does it Work?

The remarkable programmatic revolution became possible due to the invention of real-time bidding technology back in 2009. RTB is the foundation of programmatic media buying, also known as automated ad buying.

So what is programmatic buying concerning direct buying? In this procedure, ads are bought through real-time bidding, with various advertisers placing bids alongside and the highest bidder taking that specific inventory slot. The entire process is automated and barely needs intervention on the part of the media buyer. Commonly, three top players are involved: ad exchange, a demand-side platform (DSP), supply-side platform (SSP).

Benefits of Programmatic

With the help of automation, programmatic media buying through RTB is done within milliseconds. Compare this to the traditional negotiations, involving various stages: tenders, quotes, requests for proposals, and further human communication. Naturally, programmatic ad buying saves a lot of time.

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Programmatic media buying depends upon some algorithms to describe when and where to show the ad to the target audience. And the accuracy keeps getting better with time as more data is gathered from various individual users, and detailed buyer profiles are made by analyzing user behaviors, characteristics, and more. With access to the data management platforms, advertisers can set up algorithms to target particular buyers. As programmatic advertising works in real-time, it offers immediate data about an ad placement that can assist advertisers polish and tuning their campaigns on the go, which is something uncommon in traditional ad placement.

Programmatic Advertising vs. Direct Buying

So here’s the thing: direct buying vs. programmatic advertising sends the wrong message. In most cases, you shouldn’t be looking for one or the other, you should be using both. For various publishers, there are notable benefits to enjoy from both programmatic and direct ad sales.

Unfortunately, many publishers don’t have the resources or time to use both programmatic and direct selling with the full force required to excel in both arenas. For publishers with limited reach, it is usually one or the other, out of requirement. But, there’s an intermediate alternative that compliments both programmatic sales and direct sales: programmatic guaranteed advertising.

In programmatic guaranteed, ads are displayed automatically, but IO-based methods are still the focus on:

Advertisers and publishers still negotiate to overprice.
In the case of direct buys, ad campaigns have pre-decided beginning and end dates.
Advertisers keep aside ad inventory for some publishers, which is almost the same manner it’s done in direct buys.

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The buying and serving of the ad are still programmatic, offering you the attractive benefits of programmatic. With programmatic guaranteed, the approach isn’t just about programmatic advertising vs. direct buying – it’s more like programmatic plus direct buying equals grown programmatic revenue.