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‘Local Programmatic’ Opportunity Exists, Education Still Needed

A Forrester/Simpli.fi report suggests that exchange-based ad sales are desired by both local buyers and publishers, despite a few wrinkles to be ironed out.

Simpli.fi's Frost Prioleau
Simpli.fi’s Frost Prioleau

The use of automated, self-serve ad tools like those associated with real-time bidding and ad exchanges are no longer the province of large national advertisers and media sales operations, says a study of both camps by Forrester Research (pdf) on behalf of local market programmatic software provider Simpli.fi.

The findings about growing interest in programmatic tools are mostly positive, says Forrester, which conducted interviews with more than 100 digital publishing/ad execs in 29 markets between this past February and April.

Still, both the researcher and Simpli.fi, which has singularly focused its platform on bringing real-time bidding and automation to local buyers and sellers, agree that there are several issues to be resolved around promoting greater understanding of the technologies, strategies, and costs involved.

Frost Prioleau, Simpli.fi’s CEO, also points out that the industry needs to work on reducing hurdles around pricing for some smaller publishers and advertisers, even as increased scalability of local programmatic ad sales has brought significant cost efficiencies and reach to both sides of the sales divide.

“We are definitely seeing greater enthusiasm for programmatic by local marketers and media outlets,” says Prioleau. “But many publishers are worried that they don’t have audiences that would match what local advertisers need.”

The Structure Of Local Audience Segments

Specifically, publishers believe that in many cases the consumer segments typically available on exchanges are built for national audiences; therefore, finding the right match for the advertisers’ needs proves difficult.

Prioleau is not surprised. To be sure, he’s pitching Simpli.fi as the answer by dint of the “unstructured data” the company aggregates. In essence, the meaning of “unstructured data” implies the avoidance of pre-determined models — in this case, models based on a defined list of audience segments. Instead, solutions like Simpli.fi’s rely on the use of specific keywords to package groups of consumers that can then be carefully targeted by ads on the local level.

“With unstructured data, we can enable local advertising networks and publishers to customize an audience to their particular needs, as opposed to trying to fit a national-based audience segment onto their local advertiser,” Prioleau says.

Transparency Is Key

While 58 percent of publishers surveyed by Forrester reported that their advertisers are concerned that the extended audiences associated with generally borderless exchange-based ad sales would fall outside of their target geography, another 48 percent say highly-targeted segments are too expensive.

When it comes to committing a greater proportion of their advertising dollars to programmatic channels, 47 percent of publishers say that their advertisers will find high minimum campaign spends to be a “significant barrier,” followed by 42 percent who think that the lack of a perceived or measurable ROI will halt progression.

Prioleau has a response to those cavils as well. For the most part, as many other programmatic practitioners advise, greater transparency at all levels of the buying and selling process tends to ease anxieties.

“When we talk about transparency, I think of three buckets,” Prioleau says. “One is financial transparency, so the advertiser knows how their dollar is being spent. Another is domain transparency, so that brands know what sites their money is going to. The last piece that we’ve uniquely addressed is data transparency, so marketers can see into the audience and understand the specific signals that are driving the performance of a campaign.”

“Quality” Not Solely Synonymous With “National”

Once those levels of transparency are established, Prioleau contends, campaigns can be “optimized on the fly.” And as individual publishers package the raw, unstructured data to create audience segments that best reflect the value of their ad placements, over time their custom packages will get better as more consumer information is gathered.

The other big quandary for publishers is deciding what kind of ad placements they want to put on exchanges. Although ad exchangers are often associated with cheap, remnant or “unsold” inventory being chased by equally low-spending direct response/performance advertising, national sellers have begun putting more high quality (aka “premium”) placements up for sale on automated sales platforms.

The trend of selling more desirable inventory programmatically isn’t being lost in the local space, Prioleau insists.

“Publishers have seen that smart advertisers are willing to pay up for the ad inventory that they want,” Prioleau says. “In general, they are saying to publishers, ‘You have good inventory for sale.’ High-quality audience segments are seeing higher rates of monetization from programmatic buys in local markets. That shift, which is accelerating, is much more true today than it was even a year or two years ago.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.