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    Programmatic vs. Direct Sales: Which is Best Suited for Growth in 2021?

    Afton Brazzoni | Industry Analysis | 8th June 2021
    Programmatic vs. Direct Sales: Which is Best Suited for Growth in 2021?

    The internet’s first banner ad graced computer screens nearly 30 years ago in 1994, but it wasn’t until 2009 when the heyday of programmatic advertising began. The media industry was changing rapidly at the time, and Business Insider even dubbed 2009 as “The Year the Newspaper Died”. Ouch. 

    In the online space, programmatic advertising gave publishers the ability to sell low-cost digital ads in high volumes, which provided them with a much needed revenue boost during incredibly tough times.

    The past decade has revealed that programmatic advertising isn’t the golden ticket media organizations once thought it was, but it’s still a valuable piece of the revenue mix. Nearly 70% of digital media buys in 2019 were programmatic, up 4% from the predicted 65%. This demonstrates that programmatic advertising is far from dead—rather, it’s evolving. 

    In this article, we’ll explore why both programmatic and direct ad sales are well suited for growth in 2021, and how they serve different purposes for publishers.

    Programmatic sales: advantages and disadvantages

    The programmatic sales modelusing software to sell digital display adshas enabled media organizations to eliminate a significant amount of manual, administrative work from their to-do lists, such as preparing insertion orders and taking payments. Leveraging data, algorithms, and open auctions has also helped ad sales teams cut down on emails, phone calls, and negotiations with ad buyers. As a result, this has allowed publishers to refocus their efforts on delivering expertly targeted and rigorously optimized campaigns, as well as high quality customer service. 

    Many of the benefits that publishers reap from programmatic advertising indirectly extend to advertisers, along with other direct advantages. For example, instead of buying 100,000 impressions on a single website, programmatic advertising enables media buyers to scoop up 100,000 impressions across a variety of sites and reach a larger, yet still targeted audience. This is especially useful for transactions involving lower-priced inventory.

    However, programmatic sales shouldn’t be viewed through rose-colored glasses. Leveraging this advertising model effectively still requires time and resources on your part as a publisher—including taking action when algorithms go haywire. In these instances, there’s nothing quite like the human touch.

    “One challenge of programmatic is that its reliance on algorithms can lead to ads appearing in the wrong place. To avoid this, you must ensure that your demand-side blacklist is constantly updated and monitored for inappropriate sites. Some platforms allow for the exclusion of entire categories from ad spends, which can be particularly helpful,” according to this article by the Digital Marketing Institute.

     

    Direct ad sales: advantages and disadvantages

    Speaking of humanizing business transactions, media organizations can and should round out their programmatic offerings with a direct sales approach, especially when it comes to booking big brands and/or high ticket accounts. 

    Consider the Pareto Principle, which states that 80% of your business will come from 20% of your customers. In the current age of uncertainty amidst a global pandemic, it’s incredibly important to nurture your most valuable relationships. Enter direct sales. 

    While direct sales offer publishers precious face time (virtually, of course) with their top-tier customers, this model also benefits brands. Buying direct enables advertisers to run customized campaigns across multiple marketing channels and access guaranteed inventory for a set price on specific websites. This helps ensure brand safety, which is a key concern for many companies in today’s era of misinformation.

    However, direct sales is a heavy lift for media organizations. It requires your sales team to exert “maximum human effort in terms of satisfying client needs, negotiations, and back-and-forth communication,” as described in this article by AdJuster. “This calls for significant time and money, as well as the inevitability of human error within the process.”

    Due to the hands-on nature of direct sales, it’s best to avoid this approach for low-ticket accounts. While all of your customers should receive excellent service, your specific levels of service should be appropriately tailored to each account. After all, it takes the same amount of effort to manually process a one-time $50 order than it does a $5,000 order from a longstanding advertiser. 

    An ideal alternative is to offer your customers a self-service solution for their smaller ad buys. This will free up time for your sales team to focus on more complex accounts that generate greater revenue.

     

    Get the right strategy and tech to support you

    As a publisher, your sales team will always be an essential part of your business. As the programmatic advertising landscape continues to shift, your objective should be to stay up to date on the changes so you can clearly communicate the value of your offerings to your customers. By understanding how programmatic and direct sales differ, and how the two models can work together, you’ll be able to make better decisions for your media organization and the brands you serve.

    Having the right technology is also crucial to your success as a publisher. With Lineup Systems’ Adpoint media sales solution, your customers will have access to a self-service portal so you can turn your attention to generating new revenue from larger ad campaigns. Find out how Adpoint can streamline your media sales operations.

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