For anyone working in ad tech for more than a few years, the publisher monetization challenge comes as no (major) surprise. Ever since the ecosystem divided itself into demand-side and supply-side with the “impression” as the primary currency traded over automated exchanges, it was only a matter of time until the side “closer to the money” would overshadow the other.
While digital-native publishers quickly embraced these models and optimized their traffic for automated buying, traditional publishers (typically in print negotiating the “digital transition”) faced a different story. Most assumed that brand and editorial quality would ensure buyer competition to lift prices. However, this intersection of traditional and digital publishing ultimately diluted the value of these brands given the surge in digital inventory and resulted in disappointing “fair market value” in a CPM world.
Publishers are now in a race to (re)create value for their content, as we see two main trends emerging:
1. Creating alternatives to platforms by aggregating scale and data
To better compete with the scale and data capabilities of the Google-Facebook duopoly, premium publishers in various global markets, including the US, have formed alliances. The jury is still out on whether this model will ultimately succeed, forcing competitors to work together while balancing “infighting, lethargy ,and incompatible data and systems.”
2. Aligning business models with editorial expertise – content and experiences
Publishers have recognized that advertising revenue is not linear with content “quality” particularly with the emergence of programmatic buying as quality has given way to reach and data targeting. Therefore, publishers are diversifying their revenue and incorporating subscription models to be paid on their own definition of quality.
Beyond creating various flavors of paywalls for their readers, something deeper is happening. Publishers are rethinking their approach of the digital ecosystem to their advantage.
The next generation of publisher direct sales
Similarly, on the advertising front, publishers can now leverage technology, data, and AI to unlock new opportunities and empower their sales teams to better compete against the duopoly and challenge legacy ad transaction models.
Publishers can and should move beyond the traditional CPM model and move towards advanced outcome-centric models (i.e., CPCV, CPiV, vCPM, etc.) to compensate for intrinsic scale limitations while better meeting the true goals of their advertising clients. Combined with premium context which results in better ad performance and engagement, these new models should become part of publishers’ core strategy to reinvigorate their advertising revenue and maximize the value of their content.
How do we move towards this new model?
Moving “closer to the money” and further up the value chain requires publishers to start a deep, cooperative discussion with advertisers. They will then need to create packaged, scalable solutions to address their specific challenges. To succeed with highly qualified but limited footprints, these solutions need to leverage all possible optimization levers towards advanced, advertiser-centric KPIs (i.e. leads, completed video views, etc.).
For example, to run a successful CPCV (cost per completed view) campaign, optimization starts with the creative itself (along with the data set, user-definition and targeting) to AI that will model reader behavior to identify the most probable combinations that will lead to video completion (which ultimately limits inventory waste).
Looking beyond the supply side view
Unfortunately, most publisher ad tech stacks solely aim at optimizing the supply-side view of the world, while most of the high-value operations occur on the demand-side platforms. Publisher technology typically stop at the “CPM wall” leaving out most of the optimization levers that help drive the most conversions from a given impression.
Publishers need to adopt tech stacks that use AI to also compute demand-side data-points, similar to those used by DSPs to extract the most value from their inventories. In addition, these tech platforms also need to support outcome-centric optimized transaction models beyond CPM.
Only a limited number of ad tech companies have a comprehensive vision that spans across both demand-side and supply-side visions of the world. And even fewer have the scale to make their capabilities relevant or share them directly with publishers instead of to their own benefit. The publisher ad tech stack of the future will ensure that advertisers can deliver advanced KPIs while preserving and optimizing the publishers’ inventory.
Republished with kind permission of Digital Content Next, advancing the future of trusted content