Advertising

Publishers Getting to Stage 4 in Programmatic

New York Times' Matt ProhaskaI have come to learn and appreciate that we humans often evolve in stages. Whether it’s the stages of evolution in our species itself, jokingly referenced here or experienced as the much more serious 5 stages of grief, depicted here that hopefully you have not had go through often, through loss of a job or loved one, as we did three years ago last week with the sudden loss of our brother-in-law.

One area in our business that I have noticed requiring various stages of progression for many is how publishers are handling their programmatic practice today. I was fortunate to be a part of outlining these stages when on the IAB’s initial Programmatic Publishers Council, now expanded to everyone as the Programmatic Council. We created three white papers in 2013, the second of which came out last fall (amazing that this came out still less than one year ago today – seems like about five).

The key visual is below and the full write-up of the whitepaper can be found by clicking on the 2nd image in the middle of this page on the IAB’s site. (Disclosure: The IAB is a client of Prohaska Consulting.) This describes the three most common stages publishers are at today when leveraging their internal teams around programmatic.

3 stages

Stage 1 is where about 70% of U.S. publishers are today, after talking with more than 200 over the last 18 months. Most start here because programmatic used to be something that was just known as a better way to handle what is often referred to as “remnant” inventory (a word that I’m on somewhat of a mission from God to get banned among all publishers – does the same 300×250 sold as “premium” suddenly become remnant if it isn’t 100% sold through an insertion order?…ok, off my mini-rant…) We called it Operations-Focused because usually the head of Digital Ops or someone handling Yield Management has been in charge of finding some revenue for any impression not sold through a direct sales team by an Insertion Order. In many cases, these Ops leads have become responsible for 10-80% of a publisher’s total ad revenue, and justifiably gaining importance in the organization. But at this level, most Ops folks are not dealing directly with advertisers, or their programmatic buyers, and simply pulling levers in an Open Exchange managing price floors, some inventory mix, and seeing how CPMs and fill rates can hopefully inch up.

Stage 2 (about 10% of pubs) is a better solution but an interim one, in my opinion. Publishers have transitioned internal salespeople, or hired external salespeople, to focus on pitching programmatic buyers to start capturing those budgets, often in a publisher’s Private Exchange. Better than Stage 1 in that there is at least someone calling people from Vivaki to Rocket Fuel to Netflix, but still siloed from the overall sales team. Enter channel conflict, love/hate relationships, culture issues, stepping on toes, especially as buyers start integrating programmatic among their agency groups more and more.

Stage 3 (about 20% of pubs) is a better solution but still an interim one, in my opinion. This is where some publishers have leaders called by some publications as “Programmatic Czars,” as a Subject Matter Expert is brought in to do co-selling with the sales team that may generate leads. This person also handles much of the tech stack and audience productizing, often taking on a General Manager role, but still not empowered or enabled to actually help/teach the sales team do the selling themselves.
There are two other stages we didn’t include last year in this overview. Stage 0 of course exists where many publishers, like two we spoke with this week, have not done anything but read and hear about this, wondering what their role is and how to get started. Fortunately the attitudes at these publishers has changed dramatically over the past 1-2 years, from denial/anger to acceptance/enthusiasm that there can be much more to be gained than lost in engaging programmatically. And almost all of those publishers will eventually move along the various stages.

There is also Stage 4, which we didn’t publish because I believe I was the only one doing it at a major publisher when at The New York Times, thanks to Todd Haskell (now at Hearst) who hired me and allowed me to build and execute on the then-progressive strategy. I think the IAB Council held off since I was a little “out there” at the time, but fortunately more publishers are moving this way. Stage 4 means integrating programmatic into the direct Sales (and often Operations) teams’ people, process, and systems so that this new form of selling is available through the same person as an insertion order. There are huge benefits to eventually getting to this place, from removing any sales channel conflict, to Sales and Ops working much better together, to tying brand and performance marketing solutions much better together. And while this certainly is not the easiest, or fastest approach, I strongly believe it is the best for the publisher, and actually the advertiser, in the long run. Fortunately many of our publisher clients are starting to see the rewards in early days of helping them.

Unlike other progressions, not every publisher needs to complete each stage before advancing to the next one. And there is no recommended set stage of every publisher – team, culture, tech stack, and current success levels are some of the variables that help determine where a publisher should go and when. But just like every good chart from a sales executive showing her revenue performance, the IAB shows how publishers can move “up and to the right” to perform better for their advertisers and themselves.

Matt Prohaska is CEO & Principal of Prohaska Consulting, providing Programmatic Help For All with a team of 10 working with more than 20 clients since re-opening in late February. Most recently, Matt was Programmatic Advertising Director at The New York Times.

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