With programmatic ad spending in the US projected to exceed $264 billion in 2024, it is natural that publishers and website owners selling ad space should be interested in leveraging this technology.
When it comes to programmatic digital advertising, there are several different types of programmatic deals that can be employed.
These include open auctions, private auctions, preferred deals, programmatic direct, and perhaps the most lucrative of them all, programmatic guaranteed.
This article covers the ins and outs of programmatic guaranteed deals, including the benefits to publishers and how they can get started.
What Is Programmatic Guaranteed?
A programmatic guaranteed deal is where advertisers negotiate to buy ad inventory directly from the publisher, without becoming bogged down in manual processes such as exchanging tags and troubleshooting discrepancies.
The buyer agrees to purchase a fixed number of impressions, with publishers agreeing to deliver that exact number of impressions at a fixed price.
Both the publisher (seller) and the buyer bring a guarantee to the table in this transaction, hence the term ‘guaranteed’ for the arrangement.
As independent tech consultant Paul Gubbins states:
“Programmatic guaranteed is a new model that enables a programmatic buyer to device ID or cookie match an audience with a publisher and pre-agree to buy at a fixed price so long as the publisher sends the correct ID on their bid request via supply-side platform or exchange.”
Guaranteed deals work by allowing agencies to sync their data management platform (DMP) to a publisher DMP to match with an appropriate target audience. It enables ad buyers to access specific publisher audiences on a larger, more automated scale than that offered by private marketplaces.
This can greatly benefit an advertiser looking to protect their brand safety, as they have more control over where their ads are displayed.
Media buyers and premium publishers alike are increasingly favoring programmatic guaranteed deals. Around 58% of all display advertising purchased programmatically in the US in 2018 was done through a programmatic guaranteed deal.
In Australia, meanwhile, programmatic guaranteed's share of total programmatic spend reached 13% in 2021, up from 11% in 2020, according to a report from IAB Australia
Also Read: DMP vs DSP: What is the Difference?
How Did Programmatic Guaranteed Evolve?
Programmatic deals have revolutionized online advertising over the years. However, programmatic guaranteed is comparatively a new programmatic method, only having been introduced in 2015. Here’s a quick journey through its various stages of evolution.
Early Days and Real-Time Bidding
(RTB) was a revolutionary approach to online advertising when it was first introduced. However, its failure to ensure guaranteed cost and impressions along with data security issues in the open marketplace has been a concern among ad buyers.
Private Auctions
The private auction was introduced to solve some issues of ad buyers. With the introduction of the private marketplace, the programmatic process became more secure. Yet it failed to guarantee the desired price for advertisers.
Programmatic Direct
Programmatic direct was introduced to allow buyers and sellers to communicate directly and strike a deal based on predetermined impressions and pricing. Programmatic guaranteed is a branch of programmatic direct along with preferred deal campaigns.
It's safe to say that programmatic guaranteed evolved as a result of advertisers looking for new ways to make the process more equitable.
Also Read: 9 Programmatic Advertising Trends You Need To Know
How Is Programmatic Guaranteed Different From Other Programmatic Deals?
A programmatic guaranteed deal's biggest differentiator is the fact that it is characterized by concrete specifics.
While other forms of programmatic deals have some degree of uncertainty—from hundreds of bidders in open RTB auctions to non-guaranteed volumes in preferred deals—programmatic guaranteed has both a fixed price and guaranteed volumes.
While real-time bidding systems have a high efficiency when it comes to delivering relevant ads, publishers and advertisers have little control over each individual ad unit.
Moreover, traditional direct-reservation-based orders, while they are great at ensuring only ads from select brands appear on premium publisher's sites, are costly and time-consuming.
A 2018 study from Google found that programmatic guaranteed deals took 57% less time for publishers to set up and manage than traditional direct ads.
Further to this, with over 40 manual steps required to set up a reservation-based order, these orders are susceptible to human error.
Programmatic guaranteed deals aim to combine the best of these approaches while mitigating the associated drawbacks.
Benefits of Programmatic Guaranteed
Programmatic guaranteed has partly evolved due to publishers' frustration with private marketplaces. Below we look at the benefits programmatic guaranteed provides to both publishers and advertisers as compared to private marketplaces.
Programmatic Guaranteed's Benefits for Publishers
- Predictable Revenue: Although getting started with programmatic guaranteed deals requires publishers to invest time in building connections and relationships, the long-term benefits make the effort worthwhile. One of its key advantages is predictability of revenue, as publishers can rely on agreed-upon terms with advertisers, knowing exactly how much they will earn from their ad inventory.
- Efficiency After Setup: Once the initial setup phase is completed, programmatic guaranteed deals become highly efficient. Publishers no longer need to create and process insertion orders, manually enter data, fix errors, generate confirmation reports, or chase down invoices. The streamlined nature of a programmatic guaranteed campaign minimizes these administrative tasks, allowing publishers to focus on other revenue-generating activities.
- Faster Payout Cycles: Programmatic guaranteed deals are financially efficient compared to most reservation deals. While traditional deals often payout after 60 or 90 days, programmatic guaranteed deals ensure payments are made on a 30-day cycle, improving cash flow for publishers.
- Increased Revenue Potential: These deals help increase overall revenue by reducing overheads through automated payment systems. Moreover, programmatic guaranteed gives publishers access to advertisers willing to pay a premium for high volumes of ad inventory and targeted audience reach, further enhancing the publisher's income.
Programmatic Guaranteed's Benefits for Advertisers
- Access to Premium Inventory: Programmatic guaranteed provides advertisers with access to exclusive, premium ad inventory that is not available on open marketplaces. This ensures advertisers can place their ads in top-tier environments that are more likely to align with their brand’s goals.
- Guaranteed Impressions: By offering guaranteed impressions, programmatic guaranteed eliminates the need for advertisers to participate in bidding processes. This allows buyers to secure inventory without the uncertainty and competition typically found in auction-based marketplaces.
- Transparency and Control: Advertisers benefit from knowing exactly where their ads will appear. With programmatic guaranteed, they can select specific publishing sites, ensuring their ads are placed in environments that meet their standards for brand safety and relevance.
- Improved Ad Revenue: Programmatic guaranteed often includes the use of first-party data, enabling more effective marketing strategies. This data-driven approach helps advertisers optimize their campaigns and improve overall ad performance.
- Greater Efficiency: The streamlined ad trafficking process eliminates the need for manually copy-pasting tags and issuing insertion orders. Advertisers save time and reduce costs by handling fewer invoices and not worrying about managing impression counts, making the entire buying process more efficient.
Disadvantages of Programmatic Guaranteed
While programmatic guaranteed is beneficial, it does have some drawbacks for both publishers and advertisers:
For Publishers
- High Barrier to Entry: New or smaller publishers may find it difficult to participate due to the need for a large audience and solid relationships with advertisers.
- Technical Expertise Required: Publishers must hire specialized staff and acquire technical know-how to manage deals, adding operational costs.
- Inventory Limitations: Publishers must allocate a portion of their inventory to these deals, which can limit flexibility in selling to other buyers.
For Advertisers
- Higher Costs: Advertisers often pay more for guaranteed inventory compared to open marketplace bidding.
- No Benchmark for Pricing: Without a bidding process, there is no price comparison to ensure a fair deal, which could lead to overpayment.
- Obligatory Purchase: Once a deal is signed, advertisers are locked into buying the agreed-upon inventory, even if circumstances change.
Programmatic Direct vs Programmatic Guaranteed
Programmatic direct and programmatic guaranteed may seem similar since both involve direct agreements between advertisers and publishers, but there are key differences. Programmatic direct focuses on one-to-one transactions where advertisers buy ad inventory directly from publishers through an automated platform, such as a demand-side platform (DSP) or a supply-side platform (SSP).
While this process automates much of the buying, it doesn't necessarily guarantee a fixed number of impressions or a set price. Programmatic direct allows advertisers more flexibility, often making it an attractive option for brands that seek transparency and control but want to avoid rigid commitments.
On the other hand, programmatic guaranteed is more structured and provides certainty for both parties. Advertisers and publishers pre-agree on a fixed number of impressions at a set price, creating predictability in ad delivery and pricing. This model guarantees advertisers that their ads will be shown in specific inventory, while publishers benefit from knowing exactly how much revenue they will generate from the deal.
Programmatic guaranteed offers greater reliability and is often preferred by brands that prioritize assured results over flexibility.
Programmatic Guaranteed vs Private Marketplace (PMP)
While both programmatic guaranteed and private marketplace (PMP) deals fall under the umbrella of programmatic advertising, they operate in fundamentally different ways.
Programmatic guaranteed involves a direct, one-to-one agreement between the advertiser and publisher, with a fixed number of impressions and a guaranteed price. This structured arrangement ensures both sides meet their obligations, offering predictability in terms of ad placement and revenue.
Private marketplace deals, on the other hand, function as invitation-only auctions where a select group of advertisers is invited to bid on available inventory.
In this model, there is no guarantee of impressions or pricing. Publishers set a floor price, and the highest bidder secures the inventory. PMP offers more flexibility than programmatic guaranteed, making it ideal for advertisers who want competitive pricing and publishers who prefer not to reserve inventory for specific advertisers.
However, it lacks the certainty that comes with programmatic guaranteed, which is why many brands seeking fixed results may opt for the latter.
Getting Started
Publishers looking to get started with programmatic guaranteed deals first need to negotiate a one-on-one agreement directly with an ad buyer.
This can be done in a variety of ways, including through Google Ad Manager
Before getting the ball rolling, there are several factors publishers should consider to get the most out of their guaranteed deal.
Analyze Your Workflow
Firstly, consider your current workflow. How many people in your business are currently involved in rolling out your ad campaigns?
Research shows programmatic transactions can reduce the time spent on these tasks by 30% to 60%. Think about how this will affect your bottom line and where you will redeploy these resources.
Consider the Financial Advantages
Think about how the 30-day payment reconciliation will benefit your business. How can this money be re-invested to benefit both you, the advertiser, and the consumer?
Assess Your Team
Before you launch into a guaranteed ad campaign, it is vital to ensure you have the necessary in-house support. A typical website publisher will have the majority of its sales staff assigned to traditional deals, so they may need to upskill in order to feel confident running a guaranteed account.
Final Thoughts
Automation in the ad tech industry is on the rise, with no sign of slowing down.
Programmatic guaranteed deals offer an excellent opportunity for publishers to increase their ad revenue, build better relationships with advertisers and buyers, and ultimately save valuable time, resources and money.
Publift helps digital publishers get the most out of the ads on their websites. We’ve helped our clients realize an average 55% uplift in ad revenue since 2015 through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.
If you're making more than $2,000 in monthly ad revenue,contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.