Programmatic Media Buying 101: Bid Shading And Bid Caching Defined

Programmatic auctions are experiencing a big shift in the way inventory is priced. Media buyers who have been using second price auction strategies are finding that more and more SSPs are moving to first price auctions.  In the second quarter of 2018 a report by Getintent found that 43.3% of impressions were sold through first-price auctions, where the highest bid wins an impression. That figure was much higher than the previous study done in December 2017, when just 5.8% of the impressions analyzed were sold in a first price auction. With more money shifting to first price auctions, the programmatic advertising industry, both on the buy and sell side, had to come up with strategies and tactics to mitigate the effect this change has had on the way they buy and sell inventory.

Bid Shading

Bid shading is one of the tactics, which is relatively new to DSPs, that has been developed as a compromise between first- and second-price auctions.  Buyers are unhappy about paying higher prices than they were used to in second price auctions. Bid shading reduces the price for the advertiser so rather than pay the full first price, they get charged and average price between the first and second price auction.  The price is usually calculated by the SSP or DSP from bid history information which includes typical bid win rates for certain websites.

For right now bid shading is mostly used by the supply-side platforms (SSPs) and is free to the user.  But as first price auctions become the norm for programmatic media buying, more Demand Side Platforms (DSPs) are adopting this tactic out of necessity.

Another, less accepted method of dealing with the shift in auction dynamics has been developed by Ad Exchanges and is called bid caching.

Bid Caching

Why has bid caching all of a sudden become an important ad-tech term to be familiar with over the past month?  This is due to the fact that media buyers using the Global ad marketplace Index Exchange did not know that this tactic was being used for over a year until they published this blog post.

“We didn’t think it was an issue with buyers. We were so surprised. We thought this was an industry practice,” said Drew Bradstock, SVP of product at Index Exchange.

So What is Bid Caching and Why Do Media Buyers Not Like It?

It’s when a lost bid on a programmatic auction is used to fill a subsequent auction, where the impression characteristics do not necessarily match up.  For example, if the buyer bids on a particular publisher’s homepage to appear in the morning and loses that bid, the exchange would roll the bid into another auction for the next piece of content that the consumer views. So instead of running on a homepage, the ad would most likely end up on an article page. For the media buyer, this means that they are not  getting what they originally paid for.

So what are the other negative aspects of bid caching for DSP buying?

  1. Overpaying for inventory: advertisers are willing to pay higher prices for the first page in a user session, so if that’s not what they are getting then they have overpaid for the ad
  2. Messing up frequency caps and pacing: delays between a bid and ad server could increase the likelihood that a DSP found the user elsewhere
  3. Brand safety concerns: ad is served on the same domain but not on the same page

What’s Next for Programmatic Media Buyers?

Ad tech professionals have expressed their frustrations with yet another example of the lack of transparency in the industry.  Just when we think we are finally making strides to improve the negativity surrounding programmatic advertising, a story like this pops up and stirs up controversy all over again.  The negative press that has resulted from Index Exchange’s lack in public disclosure of their tactics has hopefully served as a warning to others in this space to own up to any changes in their platforms that would have a drastic effect on the way inventory is bought and/ or sold.  In the meantime, it’s important for media buyers to know all the tactics and associated terms with the move to first price auctions and how their DSP partners are adapting to the changes being made.  Talk to us if you have any doubts or questions about what your next steps should be.

Programmatic & Digital Advertising Leader Adds Jenna Umbrianna Gino to Executive Suite

The Addition of Industry Veteran Bolsters Anagram’s Market-Leading Programmatic Capabilities

BOSTON, May 2, 2018 /PRNewswire/ — Today, Anagram — a digital media agency built for the modern marketing era, and part of the ispDigital group of digital marketing technology companies — announced the hiring of Jenna Umbrianna Gino as Chief Client Officer. In her new role, she will be responsible for the design, development, and management of the company’s customer experience delivery capabilities, as well as serve as executive-in-charge of client services.
Jenna Umbrianna Gino brings a wealth of experience from all facets of the industry to Anagram, having worked at both globally recognized brands and large advertising agencies. Active at the intersection of marketing and technology for a decade, she’s one of only a handful of industry executives who have managed the design, launch and operation of two successful programmatic trading desks — first at Hill Holliday, a unit of IPG, and then at Affiperf, a division of Havas. Both IPG and Havas are among the leading five advertising agencies in the world.
“I’m thrilled to be joining Anagram,” says Jenna Umbrianna Gino. “I’m excited about the company’s strategic direction of meeting the marketing demands of the modern era. I appreciate how its leadership embraces fully transparent client communication strategies, and has created a company culture that facilitates recruitment of top talent.”

Joe Zawadzki, CEO and Founder of programmatic industry leader MediaMath, remarked, “I, and all of us at MediaMath, have been fortunate to work with Jenna for the past decade. We are excited for Jenna, for Anagram, and for the industry. Her ability to not only envision a better world for marketing, but to drive teams, clients, and partners toward that vision and ideal state is a rare and deeply needed gift.”

Before joining Anagram, Jenna Umbrianna Gino served as Partner and Research Director at Invisible Science, an independent research and advisory firm focused exclusively on programmatic marketing. Previously, she was Senior Vice President and General Manager at Havas — one of the world’s largest advertising agencies — where she managed programmatic strategy and trading activities across the North American client roster. Jenna Umbrianna Gino has also held a variety of marketing and advertising roles at Hill Holliday, a top 20 agency in the U.S and part of the IPG network.

“We’re very fortunate to be adding Jenna to the executive team,” says Adam Cahill, Founder and CEO of Anagram. “Her addition immediately strengthens our client strategy and service capabilities. Jenna is one of the pioneers in the programmatic industry, and we know our clients will enjoy more success with her on board.”

About Anagram

Anagram is a digital media agency built for the modern marketing era, with data and technology at our core. As marketing becomes more complex, we find that our client’s needs are quite varied, and tend to evolve over time. In some cases, we operate as a full-service digital media agency of record, planning, buying and optimizing campaigns across all digital channels. In others, we provide strategic counsel and systems integration services, assisting our clients as they build their internal capabilities. We’ve built our company around biddable media from day one: the way we work, the technologies we use, and the talent we hire are all oriented around an approach that is data-driven, fast, fluid, and outcome-obsessed.
Anagram is an ispDigital Group Company.  For more information, visit us at www.anagram.io and follow us on Twitter @AnagramLLC.
SOURCE: Anagram LLC
Contact: Karen Moked, VP of Marketing, Digilant: Karen.moked@digilant.com

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In 2018, Mobile Video Spend Will Dominate Programmatic Media Buys

In 2017, programmatic digital display ad spending reached $32.56 billion and is projected to continue to grow rapidly throughout 2018 and hit $45 billion in spend by 2019. With this rise in programmatic ad spend, there also comes a shift in where advertisers are buying ad space. Another shift in programmatic ad buying is the rapid rise in mobile placements over desktop. The move to mobile is not surprising considering that on average, people in the United States are spending over 5 hours a day on their mobile devices. Media Buyers are set to capitalize on this shift, in 2018, programmatic investment on mobile will reach $30 billion, over 3x the amount spent on desktop. This is in large part due to the popularity of mobile video consumption and mobile-friendly sites such as YouTube, Facebook and Snapchat.

In 2018, Programmatic investment on mobile will reach $30 billion, over 3x the amount spent on desktop -eMarketer

This year, it is projected that mobile video ad spending will surpass non-mobile ad spend. This is due to the rise in popularity of consumers watching video online. It is projected that this year people will spend on average 36 minutes watching video on their phone or tablet compared to 18.5 minutes on non-mobile devices. Around the world, people will watch 25% more video on phone and tablets whereas computer and laptop video consumption is expected to decline. Smart TV streaming continues to rise, but not quickly enough to make up for the mass decline in non-mobile platform viewing. Mobile video ad spending alone is expected to reach $18 billion, a 49% growth. With more consumers watching videos on their phone, media plans are also being adjusted to include larger budgets for mobile video ads and creative.

Mobile Video Ad Boom Driven by Social Platforms

The move towards mobile video consumption is largely due to mobile-friendly apps like Facebook, YouTube and Snapchat. Over 500 million hours of YouTube video are watched everyday. 65% of people who watch the first three seconds of a Facebook video will watch for at least 10 seconds, and 45% will watch for 30 seconds (Facebook, 2016).  These stats clearly explain why Google as well as Facebook have the largest share in mobile advertising. Advertising agencies put aside a portion of their media budget for Facebook ads and although these agencies don’t necessarily plan to use this money for mobile, it is where the audience is going, as most of Facebook’s audience is through mobile. Views for branded video content on Facebook has increased 258% in 2017 making it a great media buy for advertisers. With 10 million videos watched on Snapchat everyday, the company is estimated to experience the fastest mobile ad revenue growth between 2016-2019. As more companies make their websites mobile friendly, the shift to mobile advertising will continue to grow, leaving desktop ads behind.  

By 2019, $45.72 billion will flow via biddable media, more than four out of five US digital display ad dollars. Mobile ad spending will be credited for more than $30 billion of this amount. The era of mobile programmatic advertising is just beginning as advertisers and brands spend more time and budget optimizing their campaigns for mobile.

Read about the other nine trends that we are predicting will be the key to success for programmatic buying teams in 2018 here.

If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed on native advertising and more than 30 other topics.  Need more information, you can also reach out to us here.

2018 Trends: Generation Z vs Millennials, What Programmatic Media Buyers Need to Know?

In the last five years, digital media buyers and brand marketers have been hyper-focused on finding and targeting millennials, forgetting about an extremely influential and profitable demographic, Generation Z. Generation Z defines the group of people born between 1996 and the mid 2000s. They have different purchasing habits and need to be targeted differently than millennials. Most importantly, their influence on the market is tremendous and if brands don’t adapt to fit their needs, they have a great possibility of getting left behind.

Instagram Stories blow past Snapchat with 200 million daily active users as Generation Z becomes more valuable to most organizations than millennials -Statista


Generation Z has very clear and unique preferences that advertisers need to understand. Influencer marketing is very successful with Gen Z. Rather than looking at informational sites, they are likely to head to YouTube and watch a trusted influencer’s video for their information. Although many of them grew up with technology in their hand, this isn’t where they do their shopping. Millennials are much more likely to shop online than Generation Z who prefer shopping in person. Although millennials and Gen Z share short attention spans and the ability to toggle between multiple pages, Gen Z takes this to an extreme level. People in Gen Z have an average attention span of 8 seconds and usually switch between at at least 5 different screens. Advertisers had already seen a decline in television advertising success but now with an even shorter attention span, Generation Z is not the audience to target with TV spots. Gen Z wants real content that makes them feel like they know the brand and the person behind the content. Most importantly, this age demographic wants their independence. They are not interested in loyalty programs but rather want to interact with the advertiser on their terms. Brands that understand the unique preferences of this age demographic and can build media plans, creative and overall programmatic marketing campaigns that have better results.
 

Snapchat vs. Instagram

Brands that are looking to buy programmatic media that targets a younger demographic need to stay up to date with Gen Z likes and dislikes. Especially when it comes to social media advertising. Snapchat, one of the biggest social media platforms with 150 million daily users is starting to fall behind in market share as they realize their competitors are resonating with Gen Z more effectively. Although Facebook, who also owns Instagram, added the “stories” feature and have been accused of copying Snapchat, they already have more active daily users than Snapchat. Instagram started with a larger install base, at over 800 million active users, and have been able to successfully copy what Gen Z users love about Snapchat and adapt it in their own app. This leaves Snapchat to figure out how best to target Gen Z so the users come back to their app and don’t leave them behind in the likes of Facebook and Twitter.  
 

In Summary

What do we need to know about Generation Z?

  1. Trust influencers over direct brand advertising and would prefer to see a YouTube video from someone they follow vs. a TV spot from a brand they might like.
  2. Prefer to do their shopping at a brick and mortar store rather than online.
  3. Have a super short attention span, and are often toggling between 5 screens.
  4. Are super independent and don’t want to be defined by a brand, so advertisers that want to succeed with them need to celebrate the individual rather than trying to group them into categories or audiences.

Read about the other nine trends that we are predicting will be the key to success for programmatic buying teams in 2018 here.

If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed on native advertising and more than 30 other topics.  Need more information, you can also reach out to us here.

In 2018 Native Becomes the Leading Ad Format for Programmatic Media Buying Platforms

Native advertising was established to make ads appear more natural on a web page. Rather than making it overtly obvious that the ad is not part of the original page, native advertising uses the page’s design and layout to design the ad so that it appears as just a part of the webpage.  Programmatic native advertising takes this to the next level by targeting a person based on specific data parameters, with the goal of providing the right message to the user in the context of the page/ and or platform that they are on. This provides relevant and helpful information to the user at the right time.

Increase demand for more native experiences will drive programmatic native spend, reaching $24 million by years end, compared to 13.24 billion in 2016 – eMarketer

In 2018 native digital display ads will make up more than half of all digital display ad spending in the United States. This stems from both publisher and advertiser demands. Publishers are pursuing higher value and more mobile friendly content while advertisers are interested in more engaging, less intrusive ads.  This is a trend that programmatic media buyers need to pay attention to as it will be front and center in 2018 media plans. With the advances of machine learning and AI native advertising will become even smarter and which will likely increase the already enticing engagement metrics. Also, it is easier for publishers to guarantee a viewable and fraud free experience providing brands with a more reassuring level of transparency.

Native Gained Popularity Through Social Media Platforms

Native advertising has gained traction through social media platforms, the trend having started with Facebook. In 2017, 84.2% of native display ads appeared on social platforms, which resulted in a $18.59 billion spend. Because most people consume social media on their phones, the focus native advertising development is equally been mobile heavy.  In 2017, $19.5 billion was spent on native mobile display which encompasses 88.3% of all native advertising, and the share is only growing. However, the social platform trend is slowly shifting as other publishers outside the social platform walled gardens are incorporating in-feed ads and videos allowing media buyers to scale their native programmatic ad buys, especially for those brands who are seeking higher rates of engagement. In the coming months, it is projected that more non-social publishers will quickly move to accommodate native programmatic ad buying.

As non-social sites incorporate programmatic native ads, social platforms continue to incorporate these ads to accommodate demand from both publishers and advertisers for this advertising format, and we predict that the trend will be that in 2018 native programmatic advertising will continue to take share away from display ads. The numbers back up this trend. It is estimated that the total ad spend will reach $24 billion which will make up more than 50% of all display ad spending in the United States.

Read about the other nine trends that we are predicting will be the key to success for programmatic buying teams in 2018 here.

If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed on native advertising and more than 30 other topics.  Need more information, you can also reach out to us here.

Programmatic Media Buying 101: How the Industry is Solving Domain Spoofing and Ad Fraud with Ads.txt & Private Marketplace

In 2018 the ad tech industry, and especially the top DSPs, are going to focus on improving inventory quality for programmatic media, as seen in our top ten trends you need to know about programmatic this year.

Download the full infographic here

What Does Inventory Quality Mean?

Over the past few years, the quantity of fraudulent ads has decreased greatly as the ability to monitor and prevent ad fraud has improved. However, there was still a significant room for improvement. Much of the development that has been made is for desktops ads. As the digital ad buying process continues to become more transparent and ad inventory quality improves, focus now needs to be centered on mobile and video ads. Video ads are extremely enticing to ad fraudsters due to high CPMs. The importance of eliminating fraud and enhancing the quality of ad inventory benefits both buyers and publishers.

On the buyer’s side, there are two major reason to ensure quality ad inventory: brand safety and media waste. If a buyer purchases fraudulent ad space and their brand is presented in a negative environment, it can greatly affect their brand image. In regard to media waste, if an ad is bought and only viewed by bots, instead of human eyes, the media spend is wasted on false impressions. Purchasing quality ad inventory ensures that an ad shows up on the site it is supposed to be published on and that human eyes are viewing it.

Publishers are primarily concerned with ensuring a quality customer experience. Customer experiences are deterred through malware or annoying ads. If the ad exchange is not properly screened, malware can arrive on a publisher’s site. If the consumer clicks on the ad, it will infect their browser, creating a very negative customer experience. Customers do not like when ads refresh, flash or are otherwise annoying. Publishers need to ensure that this is not occurring with their advertisements.

Publishers and buyers need to work together to become a trusted source of quality inventory which involves the following:

  1. Publishers sharing information with one another about negative buying experiences.
  2. DSPs need to educate their advertisers, that buying ad space from many different sources opens up the door for ad fraud.
  3. Create realistic standards for viewability. It is unrealistic to set 100% viewability goals.

Solutions for Fraud and Domain Spoofing

Private Marketplace Deals

Ad space was traditionally bought through open marketplaces. This is a process in which multiple media owners offer up their ad inventory to multiple buyers. All of the buyers compete to have their ad space placed on a page and the highest bidder wins.
Private marketplaces are auctions that are only open to select advertisers through an invitation-only format. Some of these entail only one publisher offering up ad space, others have a few. Before the auction, buyers and sellers negotiate a deal. Each deal is given a unique ID and advertisers bid on that deal only – inventory that does not meet the deal will not be bid on. This marketplace structure requires more work however, it is much more transparent. Buyers will know where their ad is being placed such as the URL of the website their ad will be shown on. The marketplace ensures a more transparent ad buying process and ensures that buyers ads show up exactly where they want them to, reaching the right audience in the right place.  

DSPs Are Implementing Ads.txt

IAB (Interactive Advertising Bureau) has released the latest mechanism that boosts inventory quality and makes the ad buying process less risky. In September, IAB released the authorized digital sellers or ads.txt. This is a simple, flexible method for publishers and distributors to clearly state which companies are authorized to use their digital inventory.

Companies drop a text file on their website that lists the different companies authorized to sell inventory on their site. This will enable buyers to see which programmatic firms have authorization to sell ad space on specific websites, ensuring validity in their purchase. The upkeep for this process is also simple. Someone will have to monitor additions to an ads.txt list to stay up to date with authorized sellers.

If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed and get going.  Need more information you can also reach out to us here.

10 Programmatic Media Buying Trends for 2018 That You Need to Know About

As we kick off 2018, it’s important as marketers, media buyers or media planners to be confident that we are making the right choices, spending valuable dollars in the right places and overall making the returns for those dollars that everyone is expecting.  How do we know for sure we made the right decisions?  We read, we discuss and we read some more on what’s next and how we can outsmart others by being ahead of the trends or implementing the newest ad technology before anyone realized they even needed it.

Our team at Digilant has spent a good amount of time doing the research for you.  We narrowed it down to 10 big trends we know will affect programmatic media buyers this year.  In 2018 you will be hearing a lot of talk about in-housing, ads.txt, OTT, DOOH, native, transparency, attribution and how digital media buying will be going fully programmatic in the next couple of years. We will cover all these topics and more over the next couple of weeks but in the meantime we offer you 10 things you need to know about programmatic for 2018.

Download the full infographic here or read it below. 
If you haven’t already, there is no time like 2018 to get on the programmatic bandwagon.  If you need to get started Digilant University has all the information you need to get up to speed and get going.  Need more information you can also reach out to us here.

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