The open market for programmatic is running out of steam, but publishers see a silver lining in private programmatic deals


Last week, Digiday reported that several publishers’ direct-selling advertising businesses were off to a slow start through 2023, with their first-quarter ad revenue falling 10-25% behind forecast. But the programmatic side of the business isn’t necessarily better placed.

While publisher sales teams are busy sourcing customers to bring them into sales meetings, the programmatic open market is also in a tough spot. Three medium-to-large national publishers told Digiday that their RPMs (revenue earned per 1,000 page views) were down 20-55%, while two other publishers agreed they were also seeing declines in this area. , but refused. disclose the exact percentage.

Looking at the broader programmatic market, the average monthly CPM (cost per 1,000 impressions) in the open market for January 2020 was $1.45, $0.04 higher than the January 2021 average, which was equal at the average January CPM. 2022, according to Operative’s STAQ benchmarking data. In January 2023, however, the average CPM dropped from $0.20 to $1.21, according to the data.

For publishers’ programmatic businesses, measuring based on RPMs can help paint a clearer picture of how much money they’ve made per page, because while CPMs measure the price of individual ad spots, RPMs take into account other variables such as the number of placements on the page, according to Justin Wohl, CRO of Salon.

Wohl declined to share exact prices for the average RPM his company earns in the open programmatic market, but he said that from January 2022 to January 2023, the average RPM was down 55% year-over-year. . Compared to January 2020 before the pandemic, the average RPM in January 2023 is down about 21%, making January 2023 “the worst January ever”. [when it comes to] a d [RPMs] since 2020,” he said. Meanwhile, average RPMs over the three consecutive January months from 2020 to 2021 and 2021 to 2022 increased by around 24% and 43%, respectively.

“We feel good, on the programmatic side, the lack of competition, the lack of presence of advertisers [and] lack of price pressure,” Wohl said.

Another news publisher, The Guardian US, is also taking a hit in its programmatic activity, but the publication’s vice president of advertising, Luis Romero, said that was largely due to its inclusion on lists of blockage – an aggravation commonly shared by news outlets. This business is starting to grow, he added, but did not share by how much. That said, Romero’s goal for 2023 is to reduce the publication’s reliance on programmatic revenue from 50% of ad business at the start of 2023 to a minority by the end of this year.

A digital media executive who spoke on condition of anonymity said his company’s indirect programmatic CPMs were down 30-40% year-over-year, but as that’s only a very small portion of ad business, they’re not concerned about how that drop will impact revenue earned in the quarter or even all of 2023.

“It’s a weak spot that can be mitigated by the events and talent part of our business,” the media manager said.

Betting on programmatic direct deals

There is still hope among several other media executives that programmatic direct deals can make up for shortfalls on direct sales and open programmatic ends of the business. While programmatic in the open marketplace allows advertisers to purchase display ads on a publisher’s site with little clarity about what content their ads will appear alongside, programmatic direct deals that occur in a private marketplace or via a vendor (programmatic guaranteed) have more guarantees around things like content adjacencies, impressions, and engagements.

Two other publishers who spoke on condition of anonymity said the number of bids for guaranteed programmatic (PG) purchases is increasing, as well as RPMs for those campaigns.

“Our programmatic RPM is up. January is still a pretty quiet month programmatically, but our RPMs are probably up about 30% from what they were in Q3. [2022]said the second media manager, who compared RPMs from Q1 2023 to Q3 2022, as Q4 is often an inflated quarter for programmatic rates and Q3 was the most recently comparable quarter that has also been affected by the economic downturn.

The second head of media also said that the private market was the main area of ​​monetization of their direct programmatic activities, and while CPMs remained consistent, stronger ad units and more ad inventory on more pages led to an increase in earned income. Additionally, the executive sales team has “regained some traction” with guaranteed programmatic deals after declining slightly in the second half of 2022, driving further programmatic ad revenue growth.

Meanwhile, Operative’s STAQ benchmarking data showed average guaranteed programmatic CPMs fell from $9.39 in January 2021 to $9.91 in January 2022 and then back to $10 in January 2023. But between 2022 and 2023, average CPMs have gone up and down. from a high of $14.50 in June.

The third media manager said they received the most tenders this quarter for their guaranteed programmatic activity compared to tenders for branded content, indicating that clients and agencies still want campaigns human, but which can be executed quickly and facilitated according to defined tariffs. , they added.

The free market is not an equal experience

Not all publishers’ open market experiences are created equal, as unlike the other publishers featured for this article, the third media manager said their open market revenue is doing “pretty well” despite the circumstances, and are considered the business that is “as predictable as possible”. The executive declined to share revenue numbers or year-over-year comparisons, but they said the majority of that revenue came from Google’s open market.

For media buyers, falling CPMs are something they want to take advantage of, according to Seth Hargrave, CEO of Media Two Interactive, however, since most of those falling rates are due to delays in budget approvals, there’s a chance their customers aren’t in the programmatic ad market right now anyway.

The tides may change by the end of the quarter – and perhaps they did at the end of last month – if these clients release budgets at the end of their planning cycles. But whether those final dollars are enough to repair a quarter of the damage done to publishers’ programmatic activities is up in the air, Hargrave added.


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