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PHARMA

Programmatic Guaranteed: Selecting the Right Buying Option to Improve Success

March 3, 2020
Jason Scheller

This blog post is the third of a four-part series which will help you better understand the world of programmatic advertising, how it works, and how it applies to healthcare marketers. The first post covered the basics of programmatic advertising while the second looked at auction mechanics. In the second 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. 

In this post, we will talk about the different kinds of buying options that programmatic allows, lay out the pros and cons, and hopefully provide you a better sense of why different marketers opt for different strategies.

Selecting the programmatic option that works best for your business

The key to selecting a method for programmatic buying begins with answering a few questions. We’ve outlined them below as a decision tree.

  • 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 programmatic guaranteed or non-guaranteed?
  • Guaranteed: It’s a PMP with one buyer.
  • Non-Guaranteed: It’s a PMP with more than one buyer.

To 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. In short, there are four kinds of programmatic buying:

  • 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. 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. For the purposes of this post, though, we will focus on programmatic direct.

Understanding the basics of programmatic buying

Before you jump into a specific programmatic approach to ad buying, you need to understand how buying works.

The first is that programmatic direct deals are transacted via Private Marketplace Deal IDs. 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. 

The second is to understand programmatic direct buying, which is a means to automate direct ad buys for set campaigns. The thought behind programmatic direct is to take the automation mechanisms which 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.

The difference between programmatic guaranteed and programmatic direct

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. But there are some differences. With key programmatic guaranteed:

  • There is one seller and one buyer.
  • Sellers 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. 

You aren’t fixed into a single mode of programmatic buying

The great thing about programmatic platforms, like Life by PulsePoint, is that you can change the way you buy based on your business needs. So even though you have choices, such as programmatic guaranteed or non-guaranteed, it isn’t something you have to stick to permanently.

In this post, we covered PMPs, programmatic direct, programmatic guaranteed and the pros and cons of each. 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.

For more information on programmatic health marketing, listen to our Programmatic Health Podcast.

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