In recent years an increasing number of publishers have been focusing on driving revenue from subscriptions. The most recent one to make the plunge being Quartz which recently announced that it would be putting up a paywall.
In fact, according to Reuters’ Journalism, Media and Technology Trends and Predictions 2019, 52% of publishing executives intended to focus on subscription revenues in 2019. This shift is being driven by declining revenues from advertising due to ad-blocking and the duopoly taking the lion’s share.
However, internet advertising continues to show strong growth. According to a recent IAB and PwC report, internet advertising revenue crossed US$100B growing by 386% in about a decade. Analysts commenting on the report were confident that the industry will further evolve to expand the digital ecosystem.
Moreover, another 2018 21-country study by IAB found that the majority of respondents (52%) preferred free, ad-supported video to subscription-based video. This indicates the substantial potential of ad revenues for publishers.
You hear users don’t like ads. They respond very well to good ads, but it’s bad ads that are bringing down the industry.Jeffrey Turner, Head of Ad Product, Washington Post
John Wilpers, Senior Director of Innovation Media Consulting writes in the FIPP Innovation in Media 2019-2020 World Report, “What ailed digital advertising wasn’t the format but the execution: Pathetic quality, overwhelming volume, visual cacophony, insensitivity to privacy, glacial load times, product irrelevance, and disruptive intrusion.”
All that may soon be a thing of past, for Wilpers adds, “Today, smart media companies and advertisers are fixing all that: they are making high quality, compelling, relevant, privacy-protected, useful digital ads in a variety of new formats that load quickly and actually add value to the reader’s experience.”
These efforts, according to Wilpers have contributed to the “continued robust growth of global advertising.”
In the FIPP report, Wilpers takes readers through some of the innovations publishers have introduced in digital advertising in the last few years.
“Driving more impact in a more efficient way” with banner ads
It’s not right to say the display ad doesn’t work—it has its own merit if done right. It helps you reach a wider variety of audience. If targeted well and with good context and creative, it’s bound to do its job of engaging and inducing action from a consumer.”Gopa Kumar, Chief Operating Officer, global digital agency Isobar
The New York Times and Bloomberg are two publishers that are building increasingly sophisticated forms of display ads.
The Times introduced FlexFrame, its own version of the banner ad, in 2016. They dynamically adjust themselves to fit the screen. They are full-bleed, in-stream units that run down the entire page and are responsive to the page’s width. By 2018, FlexFrames had grown to make up nearly half of the total display units sold by the publisher.
According to Allison Murphy, The Times’ VP of Ad Innovation, FlexFrames perform better as well. Their click-through rate on the Times new article page, designed around FlexFrames, was double compared to the old article page. Also, eye tracking tests revealed that users paid four times more attention to FlexFrame ads.
Bloomberg has also attempted to take the display ad to the next level with its new format, Ad.apt. It requires a brand to only submit basic assets like headline, brand images, and video. The new platform then turns them into different ad variations, showcasing video, data or related news articles. Ad.apt also dynamically tailors the ad delivery to viewers, based on their interests, on-site behavior, and browsing history.
Derek Gatts, Global Head of Ad Traffic, Technology, and Product at Bloomberg Media told Digiday, “It’s about driving more impact in a more efficient way.” He added that with Ad.apt, “We’ll be able to say, this particular kind of audience resonates with a red button, this resonates with a blue button; this type of headline resonates with a CEO whereas a CTO resonates with this type.”
Combating Ad-blocking by making ads useful and engaging
According to the FIPP report, despite improvements in the banner ads, “they will still fall victim to ad blocking software and be wasted on millions of online readers who install blockers.”
The Washington Post is working on that with its new ad-blocker resistant ad format that is engaging and useful to readers. Its called Showcase and it’s an event recommendation ad unit that combines an advertiser’s message with things like recipes and ticket sales. The format targets real estate, entertainment, and sports advertisers. It displays a feed of a venue’s upcoming events and a buy button that takes the user to the venue’s site.
Jeffrey Turner, Head of Ad Product, Washington Post told Digiday, “A brand doesn’t want a negative experience for a user. So it’s the value exchange we’re really after.” He added that the new ad format was driven by the idea of getting readers to engage and interact with the ad. It is a text-based format called “Promoted Headline” that appears right above an article’s headline.
Addressing brand safety and relevance
Brands are becoming more sophisticated about digital advertising. They are tired of their ads showing up next to vile and vacuous content and fed up with mad and manipulated metrics.Robert Thomson, Chief Executive of News Corp
Last year, Hearst Newspapers entered into a partnership with SolidOpinion for it’s pay-per-article technology. According to MediaPost, “The platform from SolidOpinion also enables advertisers to hand-select the articles they want their advertisements to serve near.”
The way it works, according to Fergal Carr, Senior Vice President of Consumer Product at Hearst Newspapers, is advertisers pick keywords and the type of stories they want their ads to appear with. Then they bid on specific topics and locations. If they win, their ad appears whenever an article with matching keywords and topics is published.
That, according to Wilpers, is “exactly the kind of environmental control the advertisers want.”
“I have had advertisers ask me ‘can I be on the home page only when there’s happy news’,?”Fergal Carr, Senior Vice President of Consumer Product at Hearst Newspapers
News UK has similar goals with its ad platform News IQ. According to Campaign, the tool aggregates all its audience data from its media properties on a single platform and allows advertisers to target users based on opinions and emotions.
Dominic Carter, Chief Commercial Officer at News UK said that the platform has a lot of first-party data about its users’ preferences, opinions and emotions and that can drive a potential 45% increase in ad engagement.
According to Ben Walmsley, Digital Commercial Director at News UK it will enable advertisers “to create a custom audience and see what content they’ve been reading.”
For example, the platform will help a travel advertiser target readers who prefer outdoor adventures and have responded positively to adventure stories. The advertiser can target even more narrowly say by identifying readers (through their opinions) who value exclusivity.
Jesse Angelo, News Corp’s Chief of Digital Advertising Solutions. “This isn’t about blasting consumers with ads they don’t care about but intelligently engaging consumers and driving real results for our partners.”
Walmsley added, “Preferences, opinions, and emotions are fundamental factors in driving behaviors and the ability to identify these states and then build campaigns around them is going to change the way that advertisers communicate with audiences.”
Wilpers concludes in the FIPP report that they have barely scratched the surface of innovation happening in digital advertising across the world. He assures that “As long as readers and viewers want access to “free” content and advertisers want access to those people, digital advertising will do just fine.”
However, he adds, “They must stop abusing those customers and continue the trend of delivering advertisements that add value to reading/viewing experience.”
Download WNIP’s comprehensive report—50 Ways to Make Media Pay—an essential read for publishers looking at the multiple revenue opportunities available, whether it’s to reach new audiences or double down on existing super-users. The report is free and can be downloaded here.