Tag: SSP

AdMonsters European Publisher Forum Berlin 2013

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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.

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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?

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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.

Best wishes,
Volker

Upcoming AdMonsters Events
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Publisher Challenges

After my well received piece on the RTB industry (part 1 and part 2), I thought I put some thoughts together around the publisher side of things.

I was supposed to chair the European Publisher Forum early June. Unfortunately the organiser had to move the date to September, so pending my next gig I might not be able to chair and moderate the forum. This would be a shame as I come from the demand side and really enjoyed speaking to publishers, learning about their challenges. It will be a really good event with great speakers confirmed already!

The challenges from publishers are manifold. To be honest, I never really looked at publishers before, as sitting on the RTB (real time bidding) demand side, my focus was around how to deliver a good campaign for an advertiser direct or through their agency. But did anyone ever thought that really without publishers, there wouldn’t be any end consumers? I am a publisher, having a blog. People coming to my blog to read the content that is there and ultimately I create a certain audience that might be of interest to advertiser A. I am the one creating an audience – no one else. As simple as this might sound, publishers are key to our value chain!

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So without publishers our whole ecosystem would be in trouble. No publishers, no money to spend from advertisers. But why, at least it seems that way, is no one solely looking after publishers’ interest? Of course each Supply Side Platform (SSP) would jump up now and say that they have the best interest of publishers at heart. Best results and best performance for their remnant and premium inventory. Private marketplaces to ensure quality advertisers on the site, maybe even some direct sales (via or not via RTB) to networks or Demand Side Platforms (DSPs) to have guaranteed income. Floor prices that allow for good yield.

Now there are a few points re this. I remember Microsoft on Tradertalk a couple of years ago saying you can buy their premium inventory at a fixed price and fixed impression volume via an account manager or you can buy it in real time via Microsoft AdExchange, however be prepared to pay a premium and don’t be surprised if you don’t get all the volume of impressions you need. I guess that sums up how RTB works. If you buy impression by impression and the user rather than the publisher, you are happy to pay more for some impressions because they are on a more premium environment. However, if you are really after the individual user, you could argue that the publisher quality doesn’t matter. Re-targeting might be a good example here 😉

Latter, not caring about the publisher quality, is what some publishers do themselves. They collect their audience data and buy this audience across exchanges based on their 1st party data and maybe matched 3rd party data. ‘Audience Extension’ is the word for it. Instead of selling their data, and a question would be whether the data from their site is theirs or the advertisers, they use it to create a packaged audience they can sell at a higher CPM.

The biggest challenges for publishers, at least as far as I understood the ecosystem in the last four weeks, is monetisation of data and inventory. The data monetisation is relatively simple I suppose. You work with some third party data provider who pays you a revenue share for your data (and not on the increased CPM price for the impression they might achieve elsewhere). They sell it on to a data exchange and the advertiser pays a premium to use that data to target someone on the publisher site again. Wait a second, would it not make more sense for the publisher to sell data directly to the advertiser? I guess so. They ‘only‘ need data qualification and classification technology and enough direct sales or ad ops people to sell it directly. It puts the question out there whether the sales person – that is true for data or inventory – needs to be an ad ops person, an analyst or a sales person, or everything together. I suppose the latter would be nice but this skill set is not very common.

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Back to the data question. If the publisher, and I know a few that do, utilise their own data, analyse it internally, they can – given enough impressions – use that data to sell audiences on either their own site or via audience extensions. If the publisher network is big enough there shouldn’t be any problem with supply and higher yields will most certainly be achieved by having the “internal data approach“.

Another challenge, to monetise the inventory at a good CPM, can be solved easily I’d say. I might be too ignorant here but if the internal data approach works, there is no need to sell via exchanges or SSPs. So happy days. However, any other remnant can be sold via SSPs or via PTD (publisher trading desk) technology, e.g. simplified an ad server that plugs into several SSPs and exchange platforms to sell at the highest yield. I have seen some of those tech recently and it is amazing what they can do. Sooner or later this technology comes to an ad server near you. And consultancies are working left right and centre to help publishers establishing a PTD! Watch that space. I know that some publisher have built a similar solution in-house. The additional yield will justify the investment in technology and that of implementation. And of course those companies have to increase the visitors to the site, e.g. make the buyer aware of the new inventory or the new way of buying that inventory but that is the same with any publisher focused solution. So the SSPs become sales people on behalf of publishers going to the DSPs who go to the advertiser….the old value chain.

Floor pricing and guaranteed deals will help the publishers’ yield. RTB will to my mind still be the underlying technology and surely the utilisation internally will improve CPMs and net revenue. Also of course special ad sizes, page take overs etc. which you cannot sell via traded media that easily (yet).

My only question left to ask, and I most certainly cannot answer it, is why the publisher who delivers the end user gets the smallest share of the media buy? If you buy a CPM for £1, the advertiser spends 0.65 pence, the agency takes another few pence and in between the delivery and the publisher another 40-50% margin are lost to tech providers. The publisher is left with maybe 20-30 pence CPM. And, if you are a publisher who delivers the value, and maybe ‘remnant premium’ this could really p* you off. No surprise 🙂

I hope I understood the ecosystem here and made it clearer to some of you. However, as aforementioned I am not an expert on the publisher side (yet) but took my blinkers off the demand side whilst evaluating job opportunities. Exciting times ahead to deliver value for publishers. And that doesn’t mean that the classic ad network won’t be able to do so after all.

Watch this space and feel free to leave a comment below. Or email me, if you know of any jobs, publisher or advertiser side.

Cheers,
Volker