The newspaper industry’s programmatic monster
The rise of programmatic advertising technology has exposed newspaper publishers to both monster-sized opportunities and monstrous challenges when it comes to digital inventory. The need to evolve sales processes is opposed by the newspaper industry’s legacy business.
With deep traditions and long-standing practices, adaptation to change can be slow. But programmatic’s ability to significantly impact revenue gives the newspaper business a new horizon in a time when consumption of digital and mobile content are on the rise.
The newspaper industry’s transition to the automation of media buying and selling has been difficult. Many print publishers fear that an open exchange and real-time bidding (RTB) platform will undercut their direct sales efforts and drive down the value of their premium impressions. For this reason, they remain hesitant to sell digital inventory through programmatic channels. As a result, limited resources are allocated to developing a programmatic strategy. With no one responsible for developing tactics to meet buyers in an arena they are increasingly using, programmatic is often significantly underutilized.
More than RTB
Despite the association of programmatic exclusively with RTB platforms, programmatic encompasses much more. The technology offers different channels, such as private marketplace, preferred deals and programmatic direct. While different, these channels are all connected by programmatic’s main theme: the automation of the traditional IO process. For those who remain hesitant to open RTB, there remains a significant opportunity in these premium programmatic channels that should not be overlooked.
The monster opportunity offered by programmatic technology more than offsets the challenge of adapting to this modern process. On the one hand, the automation of the traditional transaction has allowed publishers to capitalize on new streams of revenue. Perhaps most notable is the ability to sell digital inventory that had previously been left unsold. Many publishers that have embraced programmatic as more than just a remnant sales channel have seen great success. It offers the chance to implement a strategy that maximizes overall yield, while at the same time complementing direct-sales channels.
Programmatic’s opportunity also lies in the pool of new customers it offers. By making inventory available where advertisers are purchasing it at a growing rate, publishers are opening the door to a broader audience of potential buyers. The technology also increases efficiency. Whereas the traditional IO process incorporates time-consuming, back-and-forth communication, programmatic technology enables an efficient self-service model. This frees up time for staff to focus on other tasks, such as identifying and courting prospective buyers.
Programmatic technology is here to stay, fueled by the dramatic impact it has had on the way business is conducted. For newspapers, which are already dealing with the transition from print to digital, the challenge to implement programmatic strategies is outweighed by the massive impact it can have on overall revenue streams, staff efficiency and resources. To succeed in this increasingly digital world, the newspaper business must conquer programmatic as a monster and welcome it for the monster opportunity it presents. Gene Pizzolato is president and general manager of Gamut, a digital media services company owned by Cox Media Group. Contact Gamut at 212.588.2800.