CBC is the first major publisher in Canada to make 100% of its desktop display ad inventory available for programmatic buying, a move the company says will enable advertisers to apply rich data targeting across its entire online audience.
The decision was made possible by a relatively new supply-side technology called header bidding tags, which allow the publisher to sell impressions simultaneously through direct and programmatic channels.
CBC director of monetization platform and services Jeff MacPherson says that thanks to the technology supplied by CBC partner Index Exchange, programmatic buyers will be able to apply their audience data to every impression on CBC’s sites, so that they have a higher chance of finding high-value users.
CBC’s desktop display inventory will be available to partner buyers via its internal private marketplace (which is powered by Index Exchange). So far, there are no plans to do the same for video inventory, which will continue to be sold through direct channels, MacPherson said.
“In this scenario, the private marketplace will get 100% visibility into what the inventory looks like,” said Brad Jeffrey, senior director of strategic partnerships at Index Exchange. “There’s just more inventory there that will most likely match what the buyers are looking for.”
The move won’t come as a huge surprise to the media industry, since the public broadcaster has been among the most enthusiastic adopters of programmatic technology. It was one of the first major online publishers in Canada to launch a private real-time marketplace, and it was one of the founding members of Canada’s Premium Audience Exchange (CPAX) in 2012.
MacPherson said CBC has been testing the system for two months now, and it doesn’t see a lot of risk involved in the decision. Many publishers have been cautious about opening up their most valuable inventory to programmatic buyers since they fear they’ll lose out on higher CPMs they would get from direct buys, and ultimately devalue their inventory.
But that’s where the header bidding tech comes in, MacPherson said. By being able to compare rates offered by programmatic and direct buyers on even footing, header bidding ensures that one doesn’t cannibalize the other. Whereas “opening up to programmatic” used to mean sacrificing premium reserved inventory, header bidding prioritizes whichever advertiser shows the strongest demand for each impression, no matter where it’s placed on the site.
MacPherson said having an integrated sales team that works with both direct and programmatic buyers is a key consideration behind the decision. “They are selling differently based on the budget and who they’re talking about,” he said. “I think it’s definitely a component to getting buy-in, to have them [sales force] understand and not be fearful of the concept of programmatic.”
Programmatic and direct on an even footing
Though header bidding has been around for more than a year, it’s recently seen a surge of interest in the U.S.
“It’s definitely starting to snowball in terms of popularity and adoption, both north and south of the border,” said Index’s Jeffrey.
Header bidding provides a way for publishers to streamline the incredibly complex process of selling online inventory, and at the same time ensures that they get the best rate they can for each impression — regardless of whether the offer is coming from a direct or programmatic buyer.
Most online publishers use a “waterfall” approach to selling inventory, which gives priority over each impression to direct sales campaigns. Any impressions that are left over after direct sales orders get filled are then passed to the exchanges to be auctioned as remnant.
That means that an advertiser who is looking for very specific users – ones who have retargeting cookies, for example – can’t view any inventory that’s been pre-sold to direct buyers. They can only access whatever’s left after direct orders have been filled, even if they would be willing to offer more than the direct buyer for specific impressions that reach their audience.
Header tags put all buyers on an even footing. They check all sources of demand simultaneously, and award the impression to whichever buyer shows the strongest demand for that particular user. The system takes into account how much inventory is available, and how much needs to be committed to direct orders to guarantee fulfillment, so direct buyers can still reliably reserve inventory; however, it can be more flexible about which specific inventory they get, recognizing that certain impressions are much more valuable to highly targeted buyers. Publishers like the technology because they end up getting a lot more value out of each impression they sell, while advertisers like it because it means they’re more likely to get the audience they want.
The CBC’s actually gone a step further than what most U.S. publishers have implemented, MacPherson explained. Its header bidding system will actually award the impression to the programmatic buyer even if they bid slightly less than what the direct buyer is offering. CBC has more than enough premium inventory to meet demand, MacPherson said, so it can easily give programmatic buyers access to high-value inventory and still ensure direct buyers get the volume they’re looking for. So for CBC, header bidding isn’t just a CPM play, it’s about increasing sell-through (without having to worry that remnant rates will bottom out on the open exchanges).
MacPherson said header bidding also helps cut down on ad loading times, as well as ad server costs, since it requires fewer calls back and forth between the publisher’s ad server and the exchanges.
While many industry watchers still associate programmatic primarily with cost-efficiency, MacPherson said this deeper push into programmatic is unrelated to the recent cost cuts announced by the CBC.
“From a process stand point its easier than direct, but we still need the bodies,” he said. “One of the biggest parts of this is the communication and the relationships with the clients that are in our private marketplaces. Those need upkeep, and that’s what the salesforce is for.”
