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Yahoo!’s Big Step Toward a Premium Programmatic Future

Published: September 26, 2013

Author: Sean Nowlin

My first experience with Real-Time Bidding (RTB) came about 4 years ago.  I was at an ad:tech conference and heard about something called a Demand Side Platform (DSP).  Up to that point I had primarily dealt with premium direct display and ad network partners.  The concept was particularly appealing to me.  A buying platform that I could control and that would give me transparency? Sign me up!
First, a quick primer:
Real Time Bidding: The ability to assess the value of a display impression, place a bid on said impression, and either win the auction or move on to the next. All of this is done nearly instantaneously. A typical way to participate in RTB is by using a DSP (or Supply Side Platform [SSP] if you are a publisher). The impressions bought and sold via RTB are traditionally remnant, or unsold, guaranteed inventory.

Steering WheelAt the beginning, DSP testing was a combination of incremental and replacement budget. On a normal plan, there was the expensive guaranteed premium inventory and then secondary premium/remnant (various flavors). One of the big questions was how to split up the entire budget. While it was great to have better control over the longer-tail portion of the media plan, there were still a lot of resources spent on maintaining the direct premium relationships.

Fast forward to today (or yesterday), and there is this in Ad Age.
Yahoo has begun automating the sale of its premium ad slots, so that an advertiser or its agency would be able to purchase the portal’s top-tier inventory through a computer. In other words, the process will be more akin to booking a hotel stay on Booking.com versus the traditional media-buying process that is more like reserving a room through a travel agent.
This means that RTB platforms, which traditionally have been used for remnant and secondary premium inventory access, will begin pulling in Yahoo! Mail or various Behavioral Targeting placements. In addition to retargeting, algorithmic-based prospecting, and audience buying, advertisers and agencies will be able to make their RTB platforms work even harder. Combining the delivery and performance insight gained from premium publisher buys along with existing DSP campaigns data can make for truly powerful stuff.
There will be some hurdles to overcome – especially around developing an API standard that all buying platforms will use to access the Yahoo!, AOL, and MSN-type inventory. If it’s ever going to be easy(ish), then a lot of folks are going to have to play nice together. But since it’s in every stakeholder’s best interest to grow the market, I don’t anticipate too many issues with this moving forward.
Now, I don’t believe that this means the end of a direct sales force anytime soon.  Not every advertiser of agency will have the capability to tie all of the automated buying together.  And there will be inventory holdouts, trying to preserve premium CPMs for as long as possible. As such (again, from AdAge):
Some media buys will still be reserved for publishers’ sales teams. “The Yahoo home page takeover will not be available through [an automated system] anytime soon,” [Yahoo VP-Product Management for Display Advertising Dennis] Buchheim said.
Once the premium publishers start down the path of automating the buys, advertisers/agencies will get hungry for more.  My money is on “soon” turning into “now” a lot faster than anticipated.

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