In the year 2015, the concept of a trading desk is not new. While most industries’ programmatic veterans think of agency when they talk about trading desks, the fact is that trading desks have evolved into all shapes and sizes.
Nowadays, programmatic buying is so widely accepted that even the smallest agencies see the value in bringing a demand-side platform (DSP) on board. No longer having a trading desk is something that is reserved only for holding companies. In 2015, trading desks are formed from even a few team members using a DSP to buy media.
What’s also interesting is the breadth of companies that have started building trading desks. From individual publishers to large media companies, and from creative and PR agencies to ad networks—all see the value in bringing technology on board to power many outdated processes and bring targeting and optimization into the buying mix.
While trading desks usually have several platforms to buy various formats, for the sake of this article we will focus on Programmatic Native Advertising. (If you are unsure how native advertising is bought programmatically, please read up on it here).
What exactly do the above companies achieve by bringing a platform on board to buy native advertising programmatically?
Let us illustrate:
Creative and PR Agencies
Historically, there has been a clear delineation between creative and media agencies. Creative agencies came up with advertising campaigns, while media agencies made sure these campaigns got in front of the consumers. This may have worked when advertising was being pumped out in one direction—towards the consumers. But now the brand-to-consumer communication has evolved and it’s a two-way dialogue. The medium is the content that brands produce, and the distribution is social and native advertising channels.
With the increasing importance of having a tight feedback loop on content production and distribution, many creative and PR agencies are evolving to add paid channels as part of their offering. As content and media come closer together in the context of programmatic native advertising, creative and PR agencies that embrace new formats and channels to reach audiences at scale help their clients win big time.
With content marketing booming, media agencies have the most pressure to redefine themselves. Built primarily for ‘push’ marketing strategies, many brands don’t see media agencies as being well equipped to execute campaigns beyond direct response initiatives. This has largely been due to the absence of media agencies’ capabilities to execute content-driven and social campaigns that many brands have brought in-house with the rise of social media as a content distribution channel.
As social is becoming more crowded, brands are now starting to move away from distributed media strategies and towards owning the content and engaging with consumers on their own properties. Such developments are recent and many brands still need help with finding ways to reach new audiences with their content. This gives media agencies a perfect opportunity to bring innovative programmatic native advertising solutions in-house to take the lead on brands’ new content-driven strategies.
Publishers and Media Companies
The media landscape has drastically evolved over the last decade. With the wide adoption of real-time bidding and programmatic buying of banner ads, more and more brands care about the exact audiences they reach rather than where they do so. This has drastically commoditized publishers’ inventory.
What has not yet been commoditized is custom (or sponsored) content that publishers produce together with a brand. This content is then hosted on the publisher’s property and is read by its audience. As a part of the package, publishers often utilize an audience extension strategy to get additional reads to the custom content that they have produced for the brand. Unfortunately, up until now, they have been utilizing intrusive banner ads to deliver value-adding content.
In native advertising, where the branded content is discovered is very important. What many publishers and media companies have started doing is bringing native advertising buying platforms in-house to execute audience extension across the web. This is done through in-feed native ad formats that deliver content in a non-intrusive, cost-effective manner.
Independent Trading Desks and Ad Networks
These two have surprisingly grown close in their role over the last few years. Soon after the first independent trading desks (ITD) started popping up, ad networks realized the scale that they have is simply unmatched to the scale of the whole web that ITDs get through the demand-side platforms. When ITDs and ad networks rushed into programmatic buying of banner advertising, this commoditized their offering.
What ad networks have are relationships with publishers. That means by bringing programmatic native advertising in-house they can closely align brands’ campaigns with the sites they work with. Just like media companies, if ad networks create any custom content with their brands, they can utilize programmatic native advertising platforms to execute audience extension and amplify this content across the web for additional scale.
Programmatic native advertising technology can benefit ITDs in a different way. Because ITDs rarely have direct relationships with publishers, what they can bring to the table is a truly agnostic approach to supply sources and the technology. Since ITDs don’t have any obligations to publishers, their 100% focus on advertisers can deliver unparalleled results if the scale and cost-efficiencies of getting users to engage with content are what their brands are after.