IX Perspectives

Rethinking Priority: A Header Tag Case Study

The Canadian Broadcasting Corporation (CBC) broadcasts national public radio and television throughout Canada. The company operates one main digital property, CBC.ca, which relies on digital advertising as a primary source of revenue and long-focused on direct deals to fill inventory on the pages.

Due to the legacy of relationships with direct deal advertisers, these deals were important to CBC, and the company highly valued the relationships developed over the years. However, the corporation intuited the rising importance of programmatic, and though direct deals were comfortable, CBC recognized that they were data starved. The company wanted to see how programmatic could change the nature of its advertising sales and was eager to explore the possibilities of this new operation.

CBC Identified the Importance of Programmatic Selling, But Had Its Questions

As many well established publishers accommodated to decades of direct sales, programmatic raised some concerns. Specifically, the company was:

  • Ambivalent about the level of control programmatic would afford. As many sellers new to programmatic, CBC questioned the cleanliness and overall safety of programmatic. The company wanted to protect its brand equity to its audience and was concerned with the quality of the advertisers and creative that could appear on its page if sourced through programmatic channels. Says Jeff MacPherson, ‎Director, Monetization Platform and Services at CBC, “Brand safety is key to CBC, we want the right advertisers on our pages and we want those advertisers to extract value from advertising on CBC properties; this was simple to achieve via direct deals and we were unsure if we could achieve the same level of control with automated selling.” What’s more – direct deal revenue and forecasting was reliable, while programmatic seemed a bit more risky and subject to market vicissitudes.
  • Concerned programmatic would lessen the importance of human relationships. The nature of direct deal relationships facilitates regular interaction between buyer and seller and CBC’s direct relationships were consultative in nature: the company worked with each advertiser to dog-ear types of inventory on specific URLs based on advertiser goals. CBC couldn’t help but wonder if a programmatic play would kill the virtuous cycle of working with an advertiser to improve inventory and ad products over time.
  • Daunted by the level of technical support programmatic may require. Many publishers new to programmatic are overwhelmed with the alphabet soup of acronyms and processes required to get a programmatic stack running. Without a technical ad ops team and programmatic sales force, CBC was unsure it had the technical bandwidth and resources to plug into the world of automated sales. Plus, if programmatic indeed was as technically complex as it was made to seem, could the company get it running and keep it so?

The Solution: Start Small, Evaluate, and Expand

CBC began to experiment with programmatic and started small, prioritizing direct deals, and leaning on Index Exchange for technical support and access to vetted programmatic demand. Here’s what happened:

  • The company first used programmatic to clear remnant inventory. To safely evaluate the impact and requirements of programmatic, CBC started small, by sending unsold direct impressions to the exchange and placing strict controls on the types of advertisers eligible to buy. The appetite for real-time inventory became clear as programmatic fill rates and pricing was healthy.
  • Private marketplaces became a clear source of value. The Canadian programmatic landscape in general comes into play here: Canadian publishers are altogether more bullish in the private markets than buyers in markets like the United States. In 2015 alone, 34% of Canadian exchange-wide spend accrued in the private channel, compared to 8% in the United States. This is due to the popularity of publisher conglomerates and Canada’s two official languages. CBC saw a parallel between direct and PMP: both allowed CBC to handpick advertisers, embrace 1:1 relationships, and exert control, but PMP provided more data and real-time value to all parties. So, the publisher began to package and place a sizeable portion of its inventory into the private market and watched programmatic grow overall as a source of revenue.
  • CBC found programmatic data deepened its relationships with advertisers. With a sizeable private market, CBC began to build stores of programmatic data and surface such data to its biggest PMP buyers. This data helped advertisers identify which types of inventory performed best for them and allowed CBC to create unique markets specific to advertiser need and KPI. What the publisher was concerned would be lost in a programmatic world was only more important: when there is data, the conversation between publisher and advertiser never stops.
  • The publisher integrated through header for holistic media management. Sold on the programmatic promise, the company wanted a way to manage all media holistically. Thus, CBC worked with Index Exchange to sell inventory through the header. Without the waterfall, the company had flexibility around priority, opened inventory to more demand sources, and introduced more competition into the market for CBC inventory.

From Programmatic Caution to Programmatic Priority

CBC was pleased with how programmatic competed against its direct deals and has continued to grow the scope of its private relationships. Today:

  • Direct deals compete alongside private deals. Due to the growing value of the private channel, CBC now allows direct advertisers to compete for the same inventory, at the same time, as private buyers, through the header. Thus, the notion of floors is eliminated, and if a PMP buyer values an impression higher than a direct advertiser, the PMP buyer wins the impression. This is an edgy move – even the most bullish programmatic sellers still allow direct the first right of refusal. Now, programmatic and direct are at parity in CBC’s market for ad space.
  • Private marketplace revenue continues to grow. From September 2015 through the end of 2015, CBC PMP revenue grew 137%, shrinking direct’s share of the advertising revenue pie. From September 2015 to October 2015 alone, PMP impressions doubled and increased MoM through the end of the year. As of mid-March 2016, PMP revenue is higher than it was for the entire month of September 2015.
  • Open market insights serve as springboard for new PMP relationships. With access to more data on demand for CBC inventory, programmatic has offered another surprising value: open market insights essentially write the plan for PMP new business development. The publisher identifies advertisers hungry for CBC inventory that are bidding only in the open market and explores the possibilities of a PMP deal with them. This in turn creates new relationships, which allows for more interaction and consultation, a healthier private marketplace overall, and altogether happier buyers. Since February 2015, the number of deal IDs in place has increased 102%.

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