Managing Risks While Monetizing Unsold Inventory

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ADOTAS — “Programmatic.”

Publishers have a love-hate relationship with this word. On the one hand, programmatic channels help sell unsold ad inventory. On the other hand, introducing third parties into online ad sales opens the door for potential data leakage (the collection and usage of consumer behavioral data without the website owner’s knowledge), and inherent brand identity risks.

Protecting publishers’ brands, and more importantly, their customers’ data, is critical when trying to maximize revenue opportunities. Finding the right balance between using third parties to drive sales and maintaining a safe brand environment may prove to be difficult at times, but it can be managed. There are three issues for publishers to consider in minimizing risk and maximizing revenue opportunities.

1. Protect first-party data through the right partnerships. Publishers’ partnership decisions often extend beyond the sales department. Any widget, programmatic vendor or website management system used by publishers should fall into the “trusted partner” category. Publishers need to understand all of their partners’ business models and what the partner expects from the publisher in order to succeed.

Social widgets that allow readers to share content on social platforms are one of the most common risks for data leakage. Many social widgets are free of charge to the publisher but act as a direct gateway to a website’s first-party behavioral data. In return, the company providing the widget monetizes the publisher’s data, weakening the value of the data and consequently, the publisher’s inventory.

Another example, a publisher may have a relationship with a supply-side platform (SSP) which works with hundreds of other companies that have direct access to its data through the SSP. Those other companies can end up buying around the publisher and monetizing its data – also weakening sales efforts.

As a general rule, publishers should limit the number of partnerships they enter into. For instance, we usually recommend that publishers have only one supply-side platform (SSP) partner to manage risk and to be able to quickly and easily resolve any issues that may occur as a result of programmatically sold ad inventory.

Successful partnerships are those which provide value to a publishers’ business but don’t usher in unknown third parties that will cause them to lose control of their data and weaken direct sales efforts. And the best partnerships are those which are aware of the issues that publishers are facing and provide tools that prevent data leakage.  Ask trusted partners for recommendations on other partnerships.

2. Create audience segments that buyers will find valuable. Every programmatic buyer is looking to improve CPMs, enrich content and drive more subscriptions. Addressing buyers’ needs through proprietary audience segments will increase the value of publishers’ inventory, and in return, drive up CPMs, resulting in increased revenues.

The best audience data segments are broad enough to address more than just a single publisher’s needs but narrow enough to address advertisers’ and buyers’ needs. Some partners will have a set of standard segments based on activity across its clients. For instance, Krux offers more than 100 standard segments that already have been proven valuable to buyers. Publishers’ partners (SSPs, demand-side platforms and data management platforms) should be able to easily provide information on the most common audience segments that are being purchased or leveraged in the open market. This information will also benefit direct sales.

3. Manage all sales channels. Publishers need both programmatic and direct sales channels to maximize revenue opportunities. At first glance, it may seem that these two channels compete (and they sometimes do), but most successful sales programs today have a common driving force: first-party data – which has quickly become the new currency in the publishing industry.

Here are a few quick tips for publishers to manage and protect their greatest assets across channels:

  • Choose how the publisher’s brand is exposed in programmatic channels. Many premium publishers will mask their URLs in programmatic environments to protect direct sales. While this is a huge risk for a buyer and will result in lower rates, it works well for premium publishers who rely more heavily on direct sales than programmatic. Publishers with less revenue from direct sales may choose to expose their brands/URLs to maximize yield.
  • Create a block list. Publishers should decide which advertisers it has a reasonable chance of working with directly and be sure to maintain those relationships. All other advertisers should be allowed to run through third parties, assuming they are serving quality ads.
  • Establish a quality standard. A bad or low quality ad could negatively impact publishers’ brand images. Premium publishers should block categories of advertisers that greatly diminish the perceived quality of their sites.
  • Understand what partners will do with publishers’ first-party data. Each company a publisher works with will use its data differently. Some partners may use one publisher’s behavioral data to optimize another company’s campaigns.  The data can also be used to power ad networks, enabling advertisers to buy around publishers. Buyers are savvy and will work with companies that provide the best inventory at the lowest rates. Publishers may consider having a data rider that outlines how partners are allowed to use their audience data.

In sum, publishers should reduce the conflicts between sales channels by decreasing the number of third parties that have access to their ad inventory and data.  The result: increased control and brand value, higher programmatic rates and stronger direct sales.

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