Rethinking the Online Ecosystem, Part II: Solutions to Publishers’ Advertising Problems

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ADOTAS – In Part I of this series, I highlighted some of the downward economic pressures faced by quality independent and professional online publishers when it comes to their advertising strategies. In this piece, my goal is to outline a few things they can do about it.

To recap briefly: The gap between the brand buyer and the performance buyer leaves a lot of slack in the market. Why is it that a publisher can lock in high CPM rates from a willing advertiser by articulating the promise of their content and reader engagement, but when it comes to working with third-party advertising services, they’re lucky to get a buck, if not $0.50 CPMs?

The answer exists in how an online publisher thinks about and optimizes the overall yield of its media assets. Publishers can no longer simply think of it as direct-sold or indirect demand, premium or remnant. The asset has to be understood and managed holistically for how and when it appeals to a marketer’s goals – and how those goals align to the context and situation of the placement.

In nearly every conversation I have with publishers, it’s obvious that they know and can sell the promise of their sites and the quality of their reader engagement. Marketers who want to target engaged readers on a particular site or sites are willing to pay top dollar for it. The problem is that the best sales team only ends up selling 20 percent of the total inventory. This is not because marketers and advertisers don’t want to purchase the inventory, it’s because most publishers are ill-equipped to present the asset in a compelling way that goes beyond “the guarantee.”

The pressure on the buy side, however, is moving away from an “IO-driven” model and toward a programmatic-driven model. Programmatic means that targeted and massive swaths of inventory can be modeled, targeted, purchased, optimized, managed, tweaked, increased and decreased, all on-demand. To date, this programmatic purchasing has been the domain of the performance-based advertiser, but that’s changing and fast.

Now you may be asking, “Why, then, can’t a premium publisher take advantage of the same technologies to better harness and manage the value of their asset?”

I agree, and it’s the other side of the same coin. But until publishers ditch the idea that programmatic buying is not a source for monetizing their unsold and remnant inventory, they will always be a step behind and in a struggle to defend their economics from increasingly sophisticated targeting and buying technology. Instead, publishers need to learn to embrace the programmatic market holistically and use it across all of their inventory.

Outlined below are key recommendations for online publishers looking to embrace the programmatic market’s dynamics:

Start with the basic outline of how your site is monetized, from custom campaigns and takeovers through to the IAB standard, high-velocity media segments. Use off-the-shelf analytics to understand how readers engage with your site to develop a situational awareness of which traffic sources are most engaged. For instance, do visitors from search engines bounce away after one page, whereas Twitter referrers dive into three or more pages of content?

Next, the same tools that marketers are using to model an audience are available to publishers (think Peer39‘s page intelligence  software, BlueKai‘s data management tools, or something similar). The modeling also goes for content, context and conversation segmentation. Value is in the segments, and until a publisher understands its audience and site segmentation, it will always be a step behind the marketer. And at the end of the analysis, it may turn out that your best ad placement is one that promotes your own asset (such as another site in your network, your Facebook page, or an email subscription offer).

Take the reins off your sales team and enable them to promote direct and programmatic sales. Use the outline and flow of the assets and map your segments of audience, content and context across the flow of your media. Give your sales team the license to sell holistically and across all segments to address the needs of marketers. It shouldn’t be about giving in to lower CPM deals, but rather about addressing a marketer’s needs with a holistic campaign. Moreover, the segments you’ve developed can be combined, packaged and promoted. For instance: Develop or participate in a private exchange, or access an audience extension channel, or perhaps even retarget your readers well beyond your owned and operated network.

The speed of the market and the increasing sophistication of technology shouldn’t be defended against, but instead understood and embraced by premium publishers. This embrace includes comprehensive brand safety solutions; data management; and the ability to prioritize, reserve and even guarantee inventory via these programmatic channels.

The key takeaway for publishers is this: Find a partner who understands your business, enables your goals and better helps to manage your economics. This last part is tricky, because the industry is pivoting quickly and there are only a handful of companies who have oriented their businesses around being true partners to publishers.

2 COMMENTS

  1. Last bullet is key – sales teams should embrace technology beyond the fax machine, particularly programmatic buying, as long as the tech meets their Class 1 needs (control, relationships, etc.) Since isocket launched the first programmatic pipes for publisher’s direct sales in the fall, its been going very well for pubs while creating no channel conflict or price erosion. It can be done!

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