SOURCE: The Boston Consulting Group

The Boston Consulting Group

July 17, 2015 00:01 ET

Programmatic Ad Sales Boost Overall Revenues, Profits for Publishers

As Traditional Direct and Programmatic Sales Converge, Publishers Pursuing Cross-Channel Strategies Increase Revenues and Margins, New Research by BCG Shows

LONDON, UNITED KINGDOM--(Marketwired - Jul 17, 2015) - As programmatic advertising gains a growing share of the digital market and the line between traditional direct and programmatic sales blurs, publishers that base their strategies in both channels boost revenues and CPMs, outperforming the market, according to a new report by The Boston Consulting Group (BCG). The report, titled The Programmatic Path to Profit for Publishers, is being released today.

Many publishers still treat programmatic sales as a lower priority: fewer than 25 percent of publishers regularly translate data analysis into sales initiatives. Those that embrace this fast-rising opportunity and deploy technology to operate more efficiently are increasing revenues and margins and establishing a solid foundation for long-term competitive advantage.

While some publishers organize themselves to realize the most value from their programmatic efforts -- one company has built programmatic revenue to more than 50 percent of its digital revenue while increasing direct sales and total CPMs -- the study found that most companies do not. Less than 25 percent of programmatic team time is spent on value-creating activities; publishers use nowhere near the full range of technology tools that can increase programmatic sales and profit margins.

"It's clear that publishers that lack a coherent cross-channel strategy, including an aggressive programmatic capability, leave money on the table today and risk loss of revenue, commoditization of inventory, and lower market share in the future," said Paul Zwillenberg, a BCG partner and coauthor of the report. "On the other hand, those that position themselves to deliver value to their advertisers in the programmatic market will both increase revenues in the near term and have a big and growing advantage over their competitors as the digital market grows and evolves."

The study found that outperforming companies employ increasingly well-defined approaches to achieve their success. Much more than others, they:

  • Deploy a cross-channel data-driven sales strategy that encompasses both traditional direct and programmatic sales and is tailored to the publisher's market position and market dynamics.

  • Understand which advertisers value which inventory and audiences and why, and leverage technology and data to match audiences to buyers and achieve higher prices.

  • Assemble the right technology, both as an efficient way to access demand and as a decision engine to maximize revenue.

  • Develop the right capabilities (particularly in sales and yield management) and realign their organizations and incentives to support a cross-channel strategy and programmatic sales goals.

"Programmatic is no longer limited to desktop display; it is fast gaining traction in mobile and video," said Benjamin Faes, managing director, partner business solutions EMEA, at Google, "Large advertisers are increasingly shifting budgets to programmatic, including branding budgets, as more premium inventory becomes available and marketers gain confidence in the benefits, especially as they realize the richness of data available. 'Programmatic guaranteed' will accelerate this shift even further."

A major North American broadcaster aims to completely replace direct sales with programmatic guaranteed within the next two years.

The study, which was commissioned by Google, involved 25 digital publishers, including print and digital-only publishers, broadcasters, e-commerce companies, and Web portals, based in Europe, North America, and the Middle East. The study involved in-depth operational workshops to understand the details of programmatic sales and operations and where these create value. BCG used the lean management methodology of value stream mapping to visualize and measure both sales and operations processes, and it conducted interviews and analyses around the key drivers of revenue.

A copy of the report can be downloaded at

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 82 offices in 46 countries. For more information, please visit

About features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

Contact Information

  • The Boston Consulting Group
    Eric Gregoire
    Global Media Relations Manager

    Tel +1 617 850 3783
    Fax +1 617 850 3701