You don’t have to be an expert in the intricacies of programmatic media buying to understand the rapid adoption of this latest innovation in the online advertising space. According to a recent AOL survey, 76% of advertisers buy display banners via programmatic across all industries and an estimated 9.5% of the total online media investment is being bought programmatically (WFA Survey, Aug 2014). Quite simply, large-scale advertisers have realized many benefits. Recognizing the potential, Ogilvy CommonHealth Medical Media first started offering the option to our medical advertising clients back in 2012 via our in-house Demand Side Platform (DSP) technology. Four years later, we review the fundamentals of the technology and the potential benefits to professional medical advertisers, while discussing the unique market conditions our industry faces that have hindered adoption. Ultimately, we ask, “Is programmatic buying right for advertisers looking to reach busy medical professionals?”
What Is Programmatic Buying?
Making banner buys programmatic simply means automating the process via a “machine” called a Demand Side Platform (DSP). Banner buys can be programmatic with or without the element of bidding (real-time bidding, or RTB), in which case two or more advertisers compete simultaneously for the same impression, with the win going to the highest bidder. The “machine” or technology not only automates the buying process, it analyzes first- and third-party data feeds to define custom audiences and then finds these targets as they move throughout the web via banner impressions available through ad exchanges. The DSP is a comprehensive solution that assists buyers by managing data, inventory and bids.
What Is the Opportunity?
The immediate opportunity for industry is to exponentially increase brand exposure and reduce costs by targeting healthcare professionals as they move across the web, beyond pure play medical sites such as Medscape and MedPageToday. The professional medical media sector continues to rely primarily on the direct 1:1, agency: publisher buying model. Given that most medical sites have a limited supply of inventory, banner CPMs are high, often averaging over $100.00 ($250.00-$350.00 for targeted banners) and premium publishers sell out of annual inventory very quickly. The DSP model solves the inventory supply problem and simultaneously yields cost-efficiency gains. With the ability to serve banners across the web to a qualified audience, we have realized CPMs downward of $20.00.
What Are the Challenges?
In the highly regulated pharma sector, we can expect to encounter challenges with the prospect of reaching a physician on ESPN.com or other nonclinical environment. Privacy concerns have been paramount but not insurmountable. Many leading pharma and medical publishers have revisited registration and opt-in language on their websites in order to broaden the use of captured data. Even when site categories are tightly constricted to news, weather and travel sites, control over ad placement and content adjacency may be compromised, which can lead to concerns for brand safety. Additionally, regulatory teams remain apprehensive around serving HCP-targeted creative on consumer-centric, nonmedical sites.
If the DSP only tapped into medical inventory, these challenges could be better addressed. However, the fundamentals of programmatic buying would be turned upside down, negating many of the benefits:
- Scale: Inventory on medical sites is limited and finite.
- Quality: As the stewards of physician member/user data, premium healthcare publishers such as medical societies will not relinquish inventory to an exchange.
- Efficiency: CPMs could easily surge to over $400.00 to reach the most productive physicians.
- Demand: There is a definite cap on what professional media buyers are willing to pay for banners as a tactic—regardless of who could potentially see the ad.
In order to realize the efficiencies of programmatic buying against a professional medical audience, advertisers must work with a partner that can tap into large-scale general market ad exchanges while validating targets on the physician level. This would provide the inventory scale needed to drive CPMs down but ensure a professional message is delivered to an appropriate audience.
Despite ongoing buzz around the launch of an industry-specific programmatic buying platform whereby HCP publishers would exclusively place inventory they are willing to sell via automation with a single media buying agency, the concept has not yet been realized. Full-service media agencies have programmatic capabilities, and given that quality, transparency and neutrality would be compromised in such a scenario, there seems little incentive for media buyers at large to work through a third-party media buying agency. The key questions: How would advertisers be assured they had a fair bid for the most premium inventory, and how would optimizations across multiple campaigns be neutrally managed, given the size of the audience?
As discussed, retargeting professionals strictly on medical sites has some challenges. Even so, medical publishers willing to try programmatic selling on their sites should continue to work directly with all media agencies, but offer programmatic direct deals. This type of transaction closely mirrors a direct 1:1 digital sale since the inventory and pricing are negotiated and guaranteed. However, elements of the buy are automated from the RFP through campaign management. Neutrality, quality, control and transparency would remain intact, as media buyers would not be required to buy via a third-party agency and the publishers could maintain control over ad messaging, placement and user data on their sites.
There is certainly room in the medical media sector to innovate. But given the unique characteristics of our market, going programmatic may not translate into greater banner revenue for medical publishers if demand is weak and advertisers are not willing to participate due to inflated CPMs. Specialized medical publishers would be better served to innovate offerings beyond banner advertising—lead generation, native advertising, and real-time dynamic content opportunities are just a few that are long overdue.
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