The advertising industry has been hit hard, the reasons for which are not only lockdown but also tightening privacy regulations and the monopoly of walled gardens. Still, periods when the biggest disruptions occur are also the time when the biggest opportunities rise to the surface. Striving to be successful in the ever-changing market realities, companies gradually embrace different and innovative business models and practices. White-label is one of those business models that gives ad tech businesses and publishers a promise of greater flexibility and independence.
A request for independent ad tech amidst the pandemic
Google, Facebook and Amazon – these three corporations are in charge of 70% of advertising spending worldwide. On top of that big corporations have almost exclusive access to user data available for targeted advertising. In such favorable conditions, ad tech giants can dictate the advertising prices and set their own rules. Good examples of this are the cookie crumble we had last year, then additional restrictions and blocks for certain types of video ads in Google Chrome. Following the user privacy trend, Apple also removed IDFA from its system, and for many advertisers and app developers, IDFA (along with cookies user data) was an important targeting mechanism.
In such an advertising market, advertisers and brands strive for better transparency and autonomy. They demand new solutions that would enable them to receive an in-depth picture of how their money is spent. They want to know what fraction of impression cost really reaches the publishers and what margins and commissions they are charged for services. Finally, they also require data ownership and strong targeting mechanisms to become independent of the ever-changing advertising landscape defined by other players.
How white label supports independent ad tech
When every advertising dollar matters, businesses face a more profound need for transparency and attribution. Big brands, like Procter & Gamble, Kellogg’s and Unilever, are massively shifting to in-house advertising, as it enables them to reduce advertising costs, obtain clarity over media spending and utilize their own first-party data for targeting purposes. By 2022, two out of three marketers intend to bring their programmatic in-house.
The ad tech market is transforming and the main drivers behind such transformations are the new market requests for transparency, accountability and independence. As lockdown caused increased media consumption across many channels (e.g. on Connected TV), brands also want to stay flexible in how they redistribute their advertising costs.
In-house advertising provides answers to many questions; however, not every company can afford to build its own advertising platform, especially now, when corporate budgets are damaged most.Roman Vrublivskyi, Chief Commercial Officer at Smart-Hub.io
The new white-label business model that recently came onto the scene allows companies to enter into programmatic without investing too much time and resources into building a platform from scratch. This becomes possible thanks to pre-built ad tech platform cores that companies buy from technology providers based on a white-label model. Installing and customizing such a pre-built platform is straightforward and doesn’t require a great investment of time and labor, which in turn translates into an affordable installation.
Building their own solutions based on white-label, pre-built platforms, businesses create self-branded advertising ecosystems that they control and fine-tune according to their own needs. Companies that already have functioning advertising businesses can also use white-label to diversify or extend their media-trading opportunities. Leveraging white-label technologies, these companies can easily improve their capacities and diversify with new business branches – without risk. In the end, such white-label projects generate additional revenue streams that oftentimes surpass the performance of the main ones.
What’s in it for publishers? how does that impact the sale of their own inventory?
What about publishers? What do they get from turning to in-house programmatic? Getting the ownership of their main asset – user data, which they can use to elevate the value of their inventory while offering data-driven advertising opportunities. The early adopters of this strategy like Netflix and Target were among those companies who leveraged the power of their first-party data for driving highly-targeted advertising experiences. Now many publishers (e.g Spotify) create their own advertising platforms as this way they can provide advertisers with what they need most – good quality user data for targeting.
Again, not every publisher can afford to build their own technology that facilitates data-driven inventory monetization, especially during pandemics. However, with independent technologies, publishers can do something called “partner publishing” at scale. Small publishers that share the same audience niche can ally and distribute platform maintenance costs among ecosystem participants. This way publishers will be able to continuously grow the capacities of the user data they accumulate while accessing up-to-date connections with advertisers.
Chief Commercial Officer, Smart-Hub.io
SmartHub is a programmatic, white-label RTB solution designed to facilitate ad tech market entry for companies that plan to set up their own branded marketplaces. It is designed for small and medium-sized ad tech businesses, ad networks, SSPs that need to build their own ad tech platforms while saving money and time.