Ad-tech loves jargon. It makes no sense to outsiders. Grammar checkers spasm when they review ad tech content. With so many unique phrases and terms it’s easy to get them confused. And even if you know the basics, it’s easy to miss the nuance between two similar concepts.
We’re going to assume that you already have an ad tech foundation and know what a PMP is. You just need further clarification on where Direct IO fit in.
If we’re assuming too much, here’s a refresher on PMPs.
General Definitions
PMP is a general term that refers to the private programmatic marketplace.
Direct IO also known as Programmatic Direct is a type of PMP. Other types are Evergreen, Guaranteed Spend etc.
Direct IO mimics the original advertising model before programmatic advertising came into being. The only difference is that a Direct IO (versus a traditional IO) is transacted digitally,
How IOs (insertion orders) used to work
Advertising deals used to be private in nature. They were enacted on a one-to-one basis between the advertiser and publisher.
To get any sort of placement on a website, for any length of time, it took a lot of manual back and forth. Both parties would discuss the campaign, the goals, the duration, the space, the price, the creative dimensions, the creative itself and so on. Once it was all hashed out with one publisher, an IO (insertion order) was created. An IO is the official “deal” document with all the necessary information to execute the campaign and make it official. It included: start and end date, ad formats and placements, target audience, number of impressions to be served, pricing structure, and cost.
Once the IO was filed the campaign was launched based on whatever mediums and scale the IO dictated. Each part of the launch transacted manually with the IO serving as the guide.
How IOs evolved into Direct IOs
A Direct IO is transacted digitally and includes all those initial back and forth decision making. The only difference is once all the details are hammered out, it is uploaded into the advertisers DSP, connected to the Publishers SSP and it automatically flows through from there.
A Direct IO is generally guaranteed spend. Meaning the advertiser is committing to spend X amount on a Publisher’s inventory over a set period at a negotiated rate.
There is no auction, there is no “first look,” or “always on,” like there is for other types of PMP structures.
Benefits of Direct IO
Publisher – The ability to sell their premium inventory at higher CPMs and establish consistent revenue
Advertiser – The ability to access valuable first party data from the publisher. Get their creative in front of a highly targeted audience in a brand safe environment. Know budget spend in advance.
Both – Greater control over the process because the DSP and SSP are only serving as a connection point and not making any decisions or changes. Therefore, more customization is available on both sides. There is also more transparency and safety because it’s not going through multiple ad partners thereby preventing ad fraud. Also, both advertiser and publisher develop strong relationships with each other for mutual future benefit.
Drawbacks of Direct IO
Integration – While not difficult, integration for a Direct IO is more complicated than a standard PMP.
Scale – Because of the effort it takes to transact it’s not worth it for either publisher and advertisers to engage in one unless the publisher has high volume traffic and the advertiser a large budget.
NMM’s conglomerate of websites enables advertisers to transact with them as one. This provides Direct IO opportunity for both publishers and advertisers to reach targeted niche audiences in any vertical that would have otherwise been out of reach for both parties.
When Should Advertisers and Publishers choose a Direct IO over other PMP structures?
The question always goes back to goal and priority.
For a publisher if their goal is stable revenue with brand safe advertisement – a Direct IO is a wise choice.
For advertisers, brand safety, consistent spend and KPIs would dictate whether to stick with one publisher or diversify into a different PMP strategy. Having clarity on goals will indicate the advertising model direction.
Next Millennium Approach
Next Millennium can transact all types of PMPs, Direct IOs included. To understand which model would benefit you most, have a good chat with our account managers who will walk you through the process and empower you to make the best decision for your business.
