Teavaros Ben McDermott and Nico Pizzolato examine how programmatic guaranteed is rising to meet the demands of the post-GDPR world.

As one may have expected, contextual targeting has experience a resurgence since GDPR placed added restrictions on personalisation. But another surprising growth trend emerged this year, and has held since the 25 May deadline: “Programmatic guaranteed”. True, “programmatic guaranteed” deals have steadily increased in the past two years, but GDPR and the upcoming ePrivacy legislation have, if anything, accelerated that uptake.

Strange for a sales method that requires almost forensic accuracy in its personalisation, no? Yet market needs have created more urgency to use and refine tools that bring buyers and sellers together in a more streamlined and direct process. Can this form of personalisation be sustained considering the developing needs of advertisers and publishers in this new regulatory landscape?

“You can’t control what you can’t measure”
Tom DeMarco

“Programmatic guaranteed” grew out of the shortcomings of the PMPs (Private Marketplaces) that sprung up to provide exclusive programmatic sales between high calibre publishers and advertisers. Despite promoting transparency, efficiency and convenience, PMPs were often anything but, with extensive set up needed, and a lack of clarity of what (and how much) inventory was being bought by the advertiser, and the price paid to the publisher.

From an operational perspective, “programmatic guaranteed” automates these deals to account for this shortfall, by using set criteria that synch up the advertiser’s and the publisher’s DMPs through a Deal ID. What is guaranteed in this system – the part that you can measure – is a given volume of impressions and the exact target audience the advertiser wants; the mutual benefit is sealed through publishers being guaranteed a certain pricing from the buyer. All of this is facilitated via first-party data.

Cut Out the Middle Man
With data controllers responsible for the follies of their processors, it is no wonder that the foreshortening of the programmatic chain is one being actively sought by both ends of it. Programmatic is a notoriously ‘leaky ship’ – in data terms – and thus the less connectors, the fewer opportunities for data breach. That’s the regulatory logic, but the financial impetus is similar; fewer mouths, more profit / less spend (depending on your relationship to the money).

However, the advertising ecosystem arose, to some extent, out of necessity, and so when shortening the chain, functionality must be replaced. Thus it is not surprising that more advertisers and publishers are openly exploring bringing digital marketing activities in-house.

Google itself has woken up to the potential of “Programmatic guaranteed” and revamped the interface it offers for such deals on Doubleclick Bid Manager (now Google Marketing Platform) making it more easily accessible to its clients. However, Programmatic Guaranteed also offers a potential avenue to combine efforts of advertisers and publishers to challenge the oligopolies of the “walled gardens”.

First-Party, No Limits
When a publisher provides an audience that exactly matches the marketer’s criteria, that can start a deeper conversation about matching first-party audience data to serve the right ad to the right people. In such conversations, both actors can gain a degree of assurance about how they have extracted informed consent from the users and how they have built first-party data set in a GDPR-compliant mode.

As long as third-party data were bountiful and seemingly unproblematic, the industry lacked the impetus to develop technology that directly matched data and media through identification mechanisms, but in a moment in which direct relations between demand-side and supply-side are gaining traction, technology is also developing in that direction.

Third-party data was an easy solution to the challenge putting off publishers and advertisers: the limitations of first-party data. With a relatively minor segment of the internet population directly available to even the largest publishers and advertisers, no wonder cookie-matching dominated. But the new regulations are removing that solution, and handing the advantage to the “walled gardens”. The “walled gardens” operate at such scale, across a single domain (or a handful in Google’s case), that the restrictions placed on first-party data and identifiers are not felt.

What is needed is a means to provide the same first-party identification matching across multiple domains, in real-time, to provide automated systems that can compete on scale with the “walled gardens”. Teavaro have developed an identification platform for which the 1st party identifier does not need to be restricted, working cross-domain, providing a network effect allowing a publisher group or a coalition of publishers and advertisers to create the scale to rival Google and Facebook.

The differences between this first-party solution and a network of publishers, for example, working as ‘frenemies’ with a centralised identifier for the greater good is that of control. The first-party identifier remains proprietary, as does any data associated with that user. Thus the “programmatic guaranteed” deals remain in the control of the data controllers, rather than having to answer to a ‘higher power’ in the identification partner, and the advertiser can deal directly with their preferred publishers, rather than being placed in a position of needing to work with a range of unsuitable publishers in the same network to maintain the relationship.

In short, publishers can, like Google and Facebook, offer advertisers what they want, directly, and move back towards a people-based focus on targeting and capping inventory that brings the publisher a premium, and the advertiser their intended audience at scale and with the ease of programmatic.

“As advertisers and brands see their future increasingly in digital, digital marketing is just becoming a part of their 1st party data strategy supporting it,” said Robert Bergmann, CEO of Teavaro. “With the current ad tech ecosystem having evolved over a considerable long period of time, it is understandable that any changes affecting its current workings are not happening overnight. But these changes have started and will continue. Eventually, advertisers and their agencies will be able to trade directly with media owners and their sellers. Most of the parties in between will have to reinvent themselves.”

The rising worldwide market for “programmatic guaranteed” deals in which media buyers and sellers leverage on privacy-vetted first-party data is a first pivoting opportunity to tackle inefficiencies in digital advertising while complying to the spirit and letter of the legislation.

We are moving away from serving the wrong ad, to unintended viewers, with dubious data. End-of-the-world scenarios predicting the near disappearance of programmatic and the eventual collapse of the digital advertising industry are being countered by innovative solutions that restore a measure of control, to data owners as well as to data controllers, with better tracking across a range of metrics and better value in the execution of campaigns.