AOL’s “Programmatic Upfront” — Still An Oxymoron

aol-logo-3Programmatic upfront? AOL’s much-ballyhooed event at New York’s Advertising Week was positioned to provoke.

Upfronts are ginormous, splashy, boozy, star-studded, A-list, steak, lobster and caviar TV blowouts for advertisers, not digital media buyers. It’s where broadcasters preview the next season’s programming. (And, as a Starcomm executive mentioned before AOL’s event kicked off, “We’ve always had an opportunity to see AOL’s premium inventory in advance.”)

Programmatic buying — real-time, automated bidding for ad inventory, is the opposite of carefully negotiated premium display advertising. So what’s a programmatic upfront? It’s still an oxymoron, and a lot of people left the AOL event scratching their heads.

What AOL really announced at an “upfront” that featured precisely one live celebrity (Nate Silver), a velvet rope and mini-skirted, high-heeled models checking agency and client-side guests into a midtown Manhattan venue was a sort of VIP buyers’ club.

Commitment = Right Of First Refusal On Premium Inventory

Beginning next year, the company will make reserved premium inventory (e.g., the Huffington Post, TechCrunch and StyleList home pages) available via its automated real-time buying system, the AdLearn Open Platform, to buyers who have committed multi-million-dollar investments upfront (hence “upfront”) — said to be in the $10M range, per Advertising Age.

So far, two brands and five agencies have signed on: Hyatt Hotels and Resorts, LG Home Appliances, Accuen, Amnet, Havas Media, Horizon Media and MagnaGlobal. DigitasLBi, Razorfish and VivaKi are thinking about it, according to AOL Networks CEO, Bob Lord.

AOL is clearly trying to decouple associations such as “remnant inventory” from “programmatic buying.” It’s looking for deeper and longer-term commitments for brand campaigns and is emphasizing the amount of planning that’s required for such initiatives, programmatic or otherwise.

Effectively, what AOL is offering is not an upfront, but rather a private, reserved marketplace where a group of high rollers get right of first refusal on premium inventory.

Substantial advance monetary commitments to premium ad inventory — not to mention the technology that powers it — are clearly advantageous to AOL. Simplifying the process of buying, placing, targeting, optimizing and re-targeting messaging across platforms and formats, including desktop, Web, mobile, apps, smartphones, tablet and rich media, clearly has advantages as well.

Do Media Buyers “Get It”?

What’s less clear is if AOL didn’t almost completely obfuscate this message in its buzz-building insistence to provocatively brand its event a “programmatic upfront.” Exit polls and post-event email exchanges indicated that there was little more understanding of what the term meant after the event than before it. “And we talked about it for days beforehand at the office,” said one strategist from Universal McCann.

AOL claims to be streamlining online ad buying, to be simplifying the process. “What would you do with more time?” asked banners, signs and projections at the New York event, implying that AOL’s promise is to deliver something newer, more streamlined and simpler.

We’ll take it! But please, call it something different. Because the morning after the event, people who had been there were still asking, “What the heck is a programmatic upfront?” In that one very important sense, AOL still can’t get out of its own way.

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