Now it is clear that Publisher’s revenue mainly comes from programmatic. This type of ads selling is outpacing traditional direct sales for desktop and mobile across display and video advertising. More revenue now. Faster growth in the future. A stronger position in the marketplace. How can more digital publishers seize these opportunities?

Programmatic growth
Programmatic is expanding at almost 30 percent a year.

Programmatic, or automated, spending on display advertising (desktop and mobile) is a $9 billion market that is expanding at almost 30 percent a year. Spending is expected to exceed $30 billion in 2019. Growth in programmatic revenue for all types of publishers—from print to e-commerce companies—is outpacing traditional direct sales of desktop and mobile advertising across display and video, and market forecasts point to programmatic overtaking direct sales globally between 2017 and 2019. The development of “programmatic guaranteed” is further blurring the line between direct and programmatic channels.

Yet new research by The Boston Consulting Group shows that many publishers are failing to capture this opportunity. One reason is that they do not approach it strategically. They treat programmatic advertising as an incremental rather than a core source of sales, and they leave increasing amounts of revenue on the table as a result. Another reason is that they do not organize themselves to realize the maximum value from their programmatic efforts. Our study found that less than 25 percent of the programmatic team’s time is spent on value-creating activities and that publishers use nowhere near the full range of technology tools that can increase programmatic sales and profit margins.

Publishers
Publishers leverage programmatic technology to outperform the market and improve overall profitability.

As the marketplace evolves and outmoded distinctions lose meaning, best-in-class publishers increasingly view programmatic advertising as core to their businesses. These companies continue to increase traditional direct sales and total CPMs. They also leverage programmatic technology to outperform the market and improve overall profitability. One publisher in our study has built programmatic revenue to more than 50 percent of its digital revenue while increasing direct sales and total CPMs. These outperforming companies employ increasingly well-defined approaches to achieve their success. Much more than others, they do so by taking the following measures:

  • Deploying a cross-channel data-driven sales strategy that encompasses both traditional direct and programmatic sales and is tailored to the publisher’s market position and market dynamics
  • Understanding how and why advertisers value different inventory and audiences, and leveraging technology and data to match audiences to buyers and achieve higher prices
  • Assembling the right technology, both as an efficient way to access demand and as a decision engine to maximize revenue
  • Developing the right capabilities (particularly in sales and yield management) and realigning their organizations and incentives to support a cross-channel strategy and programmatic sales goals

Publishers can unlock the potential of programmatic by applying the many ways listed above strategically.

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