Why ‘Programmatic Premium’ Media Buying Doesn’t Work Today

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There’s been a lot of discussion lately about “programmatic premium”- using machines to fully automate the purchase of premium advertising inventory. It seems like every conference lately has someone from Kellogg’s on a panel saying programmatic premium is GR-R-REAT with very impressive statistics to support their claims.

The Ad Exchanges, DSPs, DMPs, SSPs, and various other TLAs (three letter acronyms) you see on Terry Kawaja’s Display Lumascape have certainly been successful at automating the buying and selling of remnant inventory. But remnant inventory represents only a small slice of advertising spending. According to Mike Leo, CEO of Operative, only 18% of digital media advertising budget is spent through exchanges.

Advertising technology stack vendors are now hungrily eyeing the other 82% of the pie that is currently being spent on premium advertising inventory through guaranteed contracts. Their story is their technology will work just as well for premium inventory as it has proven to be for remnant inventory. However, in practice, they face three very significant challenges.

First and foremost, today’s exchange-based technologies are not well-suited for buying guaranteed inventory.

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