Ad auctions on an open market mean display ads can be quickly and widely deployed, but they can end up surrounded by less-than-reputable content, raising brand safety concerns. Plus the entire process—including pricing—is murky.

A private marketplace can offer only premium publishers in clear-cut deals, but it’s difficult to get enough impressions for a major campaign because many of the processes are manual.

Enter programmatic guaranteed (PG) advertising.

Introduced several years ago, programmatic guaranteed allows an ad buyer to buy a pre-agreed number of impressions on specific sites at a previously-agreed price, directly from the publisher. In some scenarios, the advertiser can target the ads at a device ID or via cookie at an audience segment.

From the publisher’s point of view, programmatic guaranteed eliminates the need to reach premium advertisers through multiple private marketplaces. By filling this need, programmatic guaranteed advertising has quickly boomed.

A tipping point for programmatic guarantees

In 2018, market researcher eMarketer said that programmatic guaranteed deals would account for more than half—58%—of spending for U.S. programmatic display ads in that year. The reason was the same as for the growth in private marketplaces: there’s more control for both advertiser and publisher, and advertisers can maintain an ongoing relationship with the seller.

Online video ad platform SpotX explains some of PG’s advantages:

Buyers and sellers negotiate custom parameters—such as flight dates, audience targeting, and frequency capping—which are then coded into a Deal ID that is passed between the DSP [demand-side platform] and SSP [supply-side platform]. These campaigns marry the efficiency of automation with the personal assurances of traditional direct sales, eliminating the laborious emails and tags and invoices that have always plagued manual direct buys. The unique differences in PG campaigns are that:

1. Buyers agree to a fixed price in return for guaranteed access to desired inventory
2. The SSP (rather than the DSP) handles the activation of deal parameters

Single-source reporting; DSP fees

Jay Friedman, President of Jenkintown, Pennsylvania-based digital agency Goodway Group, told RampUp that PG also offers some other advantages, such as all reporting in one place—compared to an advertiser receiving reporting from various parties through real-time bidding (RTB).

But one drawback, Friedman noted, is the DSP cost, which can be up to 10% of the overall ad buy. Because the impressions, inventory, and price are all preset, the dynamic decisioning of a DSP is not fully employed, but the fee is still significant.

Many big ad agency holding companies are fine with the charge, he said, because they often receive discounts, and PG lets them readily meet their clients’ needs—at scale—with full transparency and fewer concerns about brand-unsafe surroundings.

Adslot’s custom solution

One of the providers that has removed a separate DSP charge from the equation is the ad platform Adslot. The Australia-based international firm is entirely focused on programmatic guaranteed, which it calls automated guaranteed.

Although some practitioners describe programmatic guaranteed as “automated guaranteed,” since “programmatic” usually refers to on-the-spot real-time bidding, other observers contend that automated guaranteed is different, and merely refers to an automation of the usually manual insertion orders.

GM North America’s Cary Dunst told RampUp that his company’s custom-built platform provides the equivalent of the DSP and the inventory-providing SSP, without a separate DSP fee. Using a separate DSP to accomplish automated guaranteed, he said, is a bit of tech overkill.

He added that, while early versions of automated guaranteed didn’t offer targeting by audience data, his company’s platform can employ first- , second- , or third-party data targeting.

A cookieless future

Third-party cookies appear to be fading away, as Google’ Chrome and Apple’s Safari browsers have increasingly shunned that type of user tracking.

In this new climate, working directly with premium publishers at scale has several built-in advances over other avenues.

Tim McCormack, VP of ad agency Big Eye Agency in Orlando, told RampUp that the continued growth of programmatic guaranteed is likely, because it’s “a great way” for ads to be placed against premium content in ways that are contextual.

In other words, as third-party cookies become less available, advertisers that employ PG can find soccer fans on the West Coast by advertising on the pages about soccer in ESPN’s West Coast edition and similar sites. Additionally, PG provides the volume of impressions advertisers need and still offers audience targeting options.

But, even as programmatic guaranteed continues its meteoric rise, it doesn’t mean that open auctions will fade away.

Adslot’s Dunst said that, while a futures market like programmatic guaranteed will continue to make deals in advance for known high-end placements, there will always be a market driven by the huge supply of nonpremium inventory, and that means there will always be auctions.

Article originally published by the RampUp blog by LIvLiveRamp.  Please click here to read the original article.