Publishers get less than $0.50 of every advertising dollar. This isn’t a new statistic, but with the recent and unfortunate demise of LittleThings, it’s clear that publishers are at serious risk. I fear that within the next six to 12 months, we will see a steep decline in the number of publishers. Where the publishers go, supply-side ad tech must follow.
Publishers depend on advertising revenue to hire reporters, create content, and distribute it to their audiences. Even the biggest and best subscription brands are subsidized heavily by advertising. If the ad tech industry continues to tax publishers at higher than 50%, then we’re partially to blame when our democracy no longer has access to enough quality local and national journalism. These are big stakes.
There are so many middlemen taking their cut, including agencies, trading desks, DSPs, and SSPs. There are countless viewability, brand safety, fraud detection, and ad quality vendors. What real value do they all deliver? I get it that marketers don’t want their ads to appear next to inappropriate content, but with programmatic advertising spend focused almost exclusively on audience-based buying, fraud and brand safety issues are inevitable. Even Google and Facebook, with their massive engineering teams, can’t solve for brand safety and fraud in audience-based buying.
So how can we make it better? I believe the answer may be simple. We need advertisers to focus less on CYA metrics and more on ROAS. Did your campaign sell more of your product, earn social media likes, or get consumers talking about your company? If yes, invest more in that campaign! If no, who cares what percentage of ads were in view? We have precedent for this approach. Focusing on ROAS has served TV, print, and radio advertisers well since those mediums came into existence.
We also need advertisers to focus more on context. After 10+ years of trying, it’s time to admit to ourselves as an industry that audience-based buying has a lot of unsolvable problems, especially for premium publishers and the end consumer. A return to context will have the important benefit of bringing advertisers and publishers closer together in a more transparent ecosystem.
Insourcing programmatic
If you’re an advertiser reading this, I strongly recommend that you insource programmatic, build your own bidder, and bid directly into the header auctions of premium publishers. Why give away margin unnecessarily to agencies, DSPs, and SSPs?
With a relatively small business development team, you can create a whitelist of premium publishers and form direct deals with them. If you want to focus your marketing spend on CRM targeting, make sure to pick legacy publishers with strong first-party data, such as Ziff Davis, Hearst, and Meredith. If you want to focus on scale, pick the digital juggernauts, such as Weather.com, Buzzfeed, and Vox. If you want to focus on enthusiast audiences, pick niche publishers like TEN, Fatherly, and Greatist.
When you’re only buying inventory from premium publishers with whom you have direct relationships, you automatically have a lower risk of brand safety and fraud, therefore less need for the dozens of vendors extracting ad tech tax in these areas. Viewability also tends to be much less of an issue with premium publishers.
Unified auction
If you’re a premium publisher reading this, I strongly recommend that you create a transparent, flexible, and unified auction using an open source technology like prebid. When you have your own independent wrapper, you can add the bidders (including advertiser bidders) that you want, in the timeframe that you want, and at the economics that you want. There are no extra revenue shares for wrapper management, and the performance of the auction is readily available for you to observe.
If advertisers and publishers take my advice, we can move the industry back to the good old days of marketers buying directly from publishing brands, but with the assistance of technology and the corresponding operational efficiency at scale. I’m sure this all seems pretty radical as if I’m drawing a big red X through the LUMAscape. It is, and I am. Recent events have proven that the industry needs to change. We either stop picking the pockets of publishers, or we stop having publisher pockets to pick.
Source: performancein.com
Post by 29 Aug 2018