This blog post is the third of a four-part series which will help you better understand the world of programmatic, how it works, and how it applies to the health industry. For more information on programmatic for health marketing, download the ebook “Programmatic Health Anthology” or listen to our Programmatic Health Podcast.

In the last post of this series, we learned more about the auction mechanics of real-time bidding (RTB), algorithms, bid pricing strategy, retargeting, and how marketers can create comprehensive campaigns by advertising on various platforms. Now, we’re taking a step further and talking about the different kinds of buying options that programmatic allows, discussing the pros and cons, and gaining a better sense of why different marketers opt for different strategies.

DIFFERENT WAYS TO BUY AND SELL PROGRAMMATICALLY 

When approaching programmatic buying, we suggest a simple decision tree to understand the kind of setup with which you’re presented:

Is the inventory being auctioned?

• Yes: It’s RTB.
• Is it open or closed?
• Open: It’s a regular RTB auction, with all potential buyers able to bid on inventory.
• Closed: It’s a Private Marketplace (PMP) auction. 
• No: It’s Programmatic Direct.
• Is it guaranteed or non-guaranteed?
• Guaranteed: It’s a PMP with one buyer.
• Non-Guaranteed: It’s a PMP with more than one buyer.
  

Let’s break this down:

On the sell side, a publisher can set aside specific inventory and/or audiences for a buyer at a pre-determined CPM.  On the buy side, the brand/agency can secure premium inventory at a specific CPM and apply targeting to the pool of inventory made available by the publisher.

Programmatic direct deals are normally transacted via Private Marketplace Deal IDs.

What’s a Deal ID?

A Deal ID or deal identifier, is the unique number of an automated ad buy.  It’s an important part of programmatic ad buying because it is used to match buyers and sellers individually, based on a variety of criteria negotiated beforehand.

What is Programmatic Direct? 

Programmatic direct is a way to automate direct ad buys for set campaigns. The thought behind programmatic direct is to take the automation mechanisms that were popularized by RTB and apply them to the typical ad buying - specialized agreements involving key purchase terms for the transaction. Programmatic direct auctions allow for greater control over inventory sales, including specific minimum prices for specific buyers. They also allow for buyers to secure premium inventory and apply targeting to it.

How is programmatic direct any different than programmatic guaranteed? 

You could say programmatic direct encompasses both guaranteed and non-guaranteed contracts. Programmatic Guaranteed is a type of programmatic direct inventory trading. 

When a PMP is tailored to a single buyer, it is called “guaranteed”. When there are a few buyers included, it is called “non-guaranteed,” or “non-preferred”. Often, this is done to group packages of inventory with certain characteristics together using PMP deal IDs. An example for Health would be a publisher with multiple properties grouping all of their diabetes-related content into a diabetes PMP. 

Key differences of Programmatic Guaranteed:

• There is one seller and one buyer.
• Seller can sell multiple properties.
• There is a fixed CPM negotiated between the seller and buyer.
• The seller controls optimizations and performance.
  

Programmatic Direct, whether guaranteed or not, presents many advantages, but also presents disadvantages over traditional RTB auctions, too. For more details on the pros and cons specific to Programmatic Direct, see the Programmatic Health 101 white paper. 

Now, let’s review the different Programmatic buying options we’ve covered so far:

• Open RTB Auctions
• Closed RTB Auctions (PMPs)
• Programmatic Direct Guaranteed (PMPs)
• Programmatic Direct Non-Guaranteed (PMPs)
  

Each of these options offered by programmatic technology have different benefits for different situations. The chart below helps to illustrate what each type of buying option gives you. For example, private RTB auctions using PMPs typically merit a higher price you’ll expect to pay for the inventory, but you also have greater predictability in what you’re getting and better targeting capabilities.

In this post, we covered PMPs, programmatic direct, programmatic guaranteed and the pros and cons of each. For more information on all of this and more, read our Programmatic Health 101 eBook or tune in to our podcast The ProgPod. Stay tuned for the final segment of this blog series, in which we will go more in-depth on audience targeting, data management platforms (DMPs), and more.