Over the past few months I have had the privilege to put the programme together for a part of the industry that was new to me. A steep learning curve for someone working mainly on the demand side, I chaired the programme of the European Publisher Forum in Berlin.
So what is the supply side like? Is it more traditional, slower to adopt and generally speaking behind the curve as most industry folk would suggest? I don’t think so. Publishers are increasingly innovating.
Actually, their innovation is at a speed not seen in many areas of the industry. Yet they don’t necessary talk about it. The demand side, particular the agencies, brag about ‘how great they are’. Publishers don’t, however that doesn’t mean they aren’t. There is a lot going on behind closes doors that agencies could only dream about.
Today’s challenges, mainly around monetization, RTB vs. direct, premium vs. long-tail, big data and omni screen multi channel – they all were addressed at this year’s forum. I attended and moderated Monday’s sessions with the exception of a few tracks in the afternoon. Unfortunately, I had to leave for another conference and didn’t stay for Tuesday.
This is my own account of the event, my thoughts and impressions of the burning issues publishers are facing, but also about the innovations happening on the publisher side. I don’t want to give a summary of each session yet reflect the main points. I hope you find it useful and engaging, realising how much publishers are innovating and progressing.
At the beginning of any ecosystem is the question how demand and supply come together. In the old days this was via networks or direct, now via exchanges, technology providers or direct. Interesting however is that the publisher doesn’t get a higher pay for his inventory yet the 50% ‘network margin’ has been transformed into five 10% margins for technologies. This somewhat cannot be classed as progress, can it?
The ad operation guys need to become more commercially minded, trying to understand how they make the most margin for their business. Similar to the sales person needing to understand the data and technology spiel to survive. The job functions are changing, with increasing demand for ‘commercially minded ad operational data analysts with 10 years experience’. And, the argument comes from the premium publishers, that the best net revenue margins are still coming from the direct sales. Yet there are businesses where a complete automatisation of inventory sales makes a lot more sense. Different means for different publishers.
The picture of a football pitch from the BBC’s presentation stuck in my mind. We are running into corners of the pitch: search one year, social the next, then participation and now RTB. What we should do instead is going back onto the pitch and consider the whole game and get on with it….Instead of thinking of different devices and channels, we are essentially just looking “at glass”, with the end user not being bothered where, when and how big it is. We need to wake up to a new game, different layers and middle field action.
The majority of engagement, over 40%, is still on TV. Data and context are helping the targeting. Some screens fit one purpose more than another. However, the rules of engagement are changing. With services having logins across screens, the user can be targeted cross device. And one suggestion came up over and over again: why don’t the publishers and the advertisers work much closer together?
Transparency issues are still there with programmatic buying. This is not only true for the price and the value (?) chain above, but publishers holding back on URL disclosures as they don’t want to disclose all their inventory to everyone. This on return stops brand campaigns to be run and it brings back the argument for closer collaboration between publisher and advertiser. On that note, the question came up whether the ATD (ad trading desks) are just a profit extension of agencies, allowing to keep the “network margin” in house?
Incisive Media shed some light on the possibilities of using data, in house and external, to increase their premium inventory. Firstly they streamlined the cookies that were dropped on their site, and with the help of private marketplace, minimum CPMs, login-qualified 1st and 3rd party data overlays paired with floor prices allowed them to keep the premium prices for their inventory. A great approach!
What other key learning did I take away? Publishers started taking their optimisation in house. As an in house SSP or trade desk. The margins that once were taken by networks are now being taken by technology vendors (see above) so the publisher per se doesn’t end up with more money, nor does the CPM change much for the advertiser over the years. However, publishers are getting more clever with their data, using internal data across portfolio sites to sell audiences to advertisers. Whilst some might still be low volume, the impact and quality is high. On external sites via audience extension they can grow their reach and some do so already.
As a summary I can suggest that there is a need for ad operations to consider the P&L and being part of the bigger picture. They need to think outside the technical box yet getting the recognition and responsibility to drive innovation forward. According to some there is no remnant inventory just different tiers, similar to airline seats. A right thought highlighting the misleading perception of inventory when it is called ‘remnant’.
Agencies seem to take more of the revenue in house, building their demand stack, so it seems advantageous to have a tech, eg SSP, in house for publishers. High floor prices keep low profile adverts at bay whilst still monetizing premium inventory via programmatic. The combination of data and content helps segmentation and profit, leading back to the P&L consideration mentioned earlier.
A fascinating forum, lots to learn for a demand side person, yet it shows how much the publishers are pushing innovation in order to stay competitive and fight the attack to sell their inventory below value.
I hope I got the challenges across and looking forwards receiving any comments.
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