If you work for a website or traditional media company in sales, ops, or finance, it is likely that you have a mandate to find a way to generate more revenue profitably. You also are probably not given a big staff, capital to invest, or great tools to achieve this goal. Most publishers are under pressure to grow revenue, innovate, and satisfy client needs with few resources and therefore need to find new, innovative ways to monetize their audiences and maximize yield.
We have all tried using ad networks, yield optimizers, and exchanges to improve yield on our unsold inventory, but unless you have massive inventory scale, this barely impacts the top line, and to make it worse, the yield optimizers and exchanges reduce the earned revenue by nearly 25 percent, making the revenue less profitable and hard to predict.
The CPMs and revenue a publisher's direct sales team generates will always (with some exception) be more valuable and represent more profit, so finding new media products for them to sell will drive top-line revenue much faster.
I speak to many publishers and they always ask me about ways to generate additional sales or increase the value of deals. Most think buying third-party data will help them monetize their unsold inventory, but unfortunately, most publishers don't have enough scale to sell standalone buys that will satisfy the advertiser. However, most publishers have done an amazing job of aggregating high-value audiences on their own and can flip the model and possibly integrate third-party data with their own proprietary audiences to create unique packages of inventory offsite that can be added to a plan. Most people refer to this as audience extension. The idea is that a publisher can identify a segment of their audience that can then be reached across the web as the user moves from site to site. Why would an advertiser buy this from a single site you may ask? There are a few reasons. The obvious one is ease of buying and efficiency. The buyer only needs to issue one IO with a trusted partner instead of working with many vendors. Another is creating an affinity with an audience that has been exposed to the brand in context and then audience extension can ensure the marketer reaches the audience with their preferred frequency.
Another way the publisher can leverage offsite inventory is to augment or scale reach of a given target. For example, a publisher may reach 1 million golf enthusiasts in context and charge a premium CPM for that but could then add a second line item to the program reaching golf enthusiasts using third-party data offsite at a discounted CPM to give the marketer a more efficient price and access to a much larger audience. Again, why would the marketer buy this from the publisher? Ease of buying, sure, but more importantly, the seller likely knows far more about the audience, their interests, the topic, and how to construct the segment to resonate with the brand.
Audience extension is a great tool for publishers who have high-value audiences, need to drive scale, or simply want to augment a plan with innovative audience targets. It can separate you from other sellers and help you to capture a larger percentage of spend. And working with a technology platform that seamlessly enables a publisher to analyze audience-, segment-, and purchase-targeted inventory simplifies the process enormously. Has audience extension worked for you?
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Larry Allen is SVP, Global Platform Sales for Xaxis. He has responsibility for overseeing solutions for publishers including Xaxis for Publishers, Xaxis Exchange, and Xaxis Marketplace globally.
Larry has extensive experience in digital media, marketing, and business strategy unmatched by most standards. Prior to joining 24/7 Media (which merged with Xaxis in 2014), he held senior management positions at cutting-edge digital media companies such as AOL, Viewpoint, Unicast, Yieldex, Real Media, and TACODA.
Larry also ran his own consulting business where he advised many major media companies such as The New York Times, Meredith, 33Across, and Business Insider. He is a frequent contributor to a number of trade publications, blogs, and industry conferences.
A graduate of Clarion University of Pennsylvania with a degree in Business Management, Larry is based in Xaxis' headquarters in New York City.
Follow him on Twitter at @lawrenceallen2.
March 19, 2014