Programmatic Monetization: The [R]Evolution of Yield Management

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Direct advertising campaigns have been sold using traditional methods for years. A publisher’s sales team is tasked with filling as much of their inventory as possible. Once they close a sale, the order is entered into the ad system by the publisher’s ad ops team, it goes live, and then the ad ops team monitors pacing, makes adjustments, and performs all of the typical tasks that go hand-in-hand with traditional campaign management. This model has now been expanded upon with the advent of programmatic monetization.

A brief history of a big idea

When remnant monetization first arrived on the scene it was viewed as a way to squeeze some extra revenue from unsold inventory. Even if a publisher had an extremely effective sales team, it was never a guarantee that they’d be able to directly sell 100% of their inventory, so they looked to ad networks and other non-direct solutions to help fill their remaining inventory rather than leaving money on the table. This worked for a while, but it didn’t take long for publishers to realize that the one-size-fits-all model offered by most remnant networks fell short of truly optimizing revenue for unsold inventory. AdMeld then entered the scene and became an auto optimizer of remnant solutions, which many would consider to be the first step in the evolution of unsold inventory monetization.

Over the years, more sophisticated approaches to filling unsold inventory have been developed. It’s worth looking at the evolution of monetization to understand why a publisher might be interested in programmatic solutions, and how one of the heavyweights in the space – Google’s AdX – functions as a monetization tool. We’ll also discuss some best practices for approaching the challenge of putting programmatic to work as a complimentary addition to direct sales.

The new monetization

Things have progressed significantly in the way unsold inventory is filled since the advent of ad networks in the late 90s. Instead of having standard remnant companies filling your inventory, be it a vertical remnant company that is specific to a particular market or a broader remnant sales solution, advanced programmatic platforms are able to accommodate a variety of different audience segments. Everything is available to publishers, from standard remnant businesses to platforms that contain numerous demand sources which plug directly into the ad server. Platforms such as, AdX, OpenX, Rubicon and AppNexus are just a few of many examples. These large scale platforms are designed to maximize the value of unsold inventory by enabling advertisers to purchase impressions via bidding systems, or through direct deals at rates specified in the system by the publisher.

We’re only several years into the age of programmatic advertising but no one is looking backward wistfully. From streamlining the sales and ad operations process, to applying marketplace economics to single impressions in real time, programmatic solutions have quickly gained popularity because of the value they add and the complementary efficiencies they bring to the entire yield management function.

Continue to Part 2…