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Rise of the Machines

  |  December 4, 2012   |  Comments

A web publisher's survival guide in the age of programmatic buying.

As online publishers, we have a lot to be thankful for this holiday season. The U.S. economy avoided the dreaded double-dip recession and actually had a 2 percent growth in Q3. This growth was fueled, in part, by the growing strength of emerging industries, which include online advertising. According to eMarketer, Internet advertising will total $37.31 billion in 2012, a 16.6 percent rise from 2011. The display market grew to $14.98 billion, accounting for approximately 40.2 percent of the total market. This trend is expected to continue into next year where domestic online advertising should increase by 13.9 percent.

Even with this growth in the online display market, all is not well in the world of web publishing. Programmatic buying - the process of buying and selling ads in an automated manner - is one of the main culprits. It grew more than 98 percent during 2012, and now accounts for more than 13 percent of the entire display market. This has placed a major damper on the future prospects of online publishers maintaining their ability to sell their display media through a direct sales channel.

Web publishers worryingly (and probably accurately) suspect that the continued growth of programmatic buying will come at the expense of their direct ad buys. Some companies, such as Federated Media, feel the market for selling premium display is so bad that they have shuttered their direct display sales business altogether.

Even with this growing shift to programmatic buying, the situation is not as dire as it seems. Online publishers still occupy a central role in the digital advertising ecosystem. Traditional media companies and nimble publishing upstarts alike have continued to produce high-quality content that attracts large audiences across a broad spectrum of sites. To stay ahead of the machines, publishers need to make sure that they are properly positioned for success in 2013 and beyond. Here are some of the points that web publishers should embrace moving forward.

Align Your Site Portfolio and Sales Team Structure to Embrace "Fewer, Bigger, Better"

With the increasing amount of funds marketers are allocating to programmatic buying and social media channels, marketers and their agency partners are going to be expecting more out of their publishing partners for their branded media spends. On several different occasions, I have directly heard from multiple agency heads that they want to work with "fewer" publishing partners in order to allocate "bigger" budgets to run "better" programs.

To optimally position themselves, companies that publish multiple sites need to carefully consider realigning how they sell their portfolio of web properties under a single sales structure to take advantage of the "fewer, bigger, better theme." Many forward-looking publishers are doing just that. NBC recently bundled its iVillage sales team under its NBC News banner. Earlier this year, Turner Media consolidated its various sales teams into a single structure to sell all of its various web properties. In this day and age, having one stronger and larger sales team selling a deeper portfolio of web properties will more likely generate better results than two smaller sales teams.

Go Beyond the Banner

Publishers need to make sure that they offer their marketing partners advertising solutions that programmatic buying cannot easily duplicate. After all, why would a media planner place an order if she can get the same class of advertising inventory through an ad exchange or programmatic buying channel? As a collective group, web publishers need to fully embrace larger, more impactful IAB Rising Stars ad units. Publishers should also create and implement display solutions that are unique to their site. To make these custom solutions successful, publishers need to properly invest in their sales marketing and creative executive teams in order for their creative solutions to stand out from the crowd.

Sell a Story of Ad Effectiveness, Not Efficiency

With the emergence of programmatic buying, it's even more important to effectively communicate how a brand can engage with your audience. Web publishers should drive conversations around how a marketer can align their brand messaging within your site to influence their target audience. To demonstrate ad effectiveness, publishers should also try to incorporate brand studies as part of large media campaigns. Finally, publishers should also emphasize engagement or interaction rates as a proxy for ad effectiveness and steer clear of the dreaded click-through rate metric.

Embrace Content-Led Advertising Opportunities

Of all players in the digital advertising ecosystem, web publishers are best positioned to offer marketers content-led advertising opportunities. Whether that is having a marketer sponsor a series of articles around a particular topic or integrating their brand inside a webisode video series, these content-led solutions need to be sold in conjunction with the site's available ad inventory. Publishers who are moving entirely away from a display sale are making a critical mistake.

While the standard ad format is on a path to commodization, it will remain the primary advertising currency for the foreseeable future. Publishers who produce content and have large scale will always have a place in the marketing mix. However, it's those publishers who heed the advice above that should be able to stay two steps ahead of the machines and have a successful future.

Rise of Machines image on home page via Shutterstock.

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ABOUT THE AUTHOR

Aaron Broder

Aaron Broder is co-founder of Evolve Media, a unique media company unparalleled in its ability to offer brands a complete solution to online advertising. In 2000, Aaron transitioned into the world of online ad sales when he co-founded and became CEO of Gorilla Nation Media, LLC, the world's largest online branded sales company and a division of Evolve Media. In 2004, Aaron advanced in the digital world by developing AtomicOnline, a diversified online media company that develops leading consumer Internet brands such as SheKnows.com and Craveonline.com. Aaron recently brought Gorilla Nation and AtomicOnline together under one banner company, Evolve Media. Evolve's primary mission is to provide marketers with unique, integrated creative programs across branded consumer content sites, allowing brands to engage with a passionate, influencer audience. To drive the best results we offer best-in-class integration and creative solutions tailored to specific brand objectives.

Aaron began his career at the William Morris Agency, a Hollywood Talent Agency, and co-founded Celebrity Blvd. Graduated UCSB, 1991; M.B.A from University of Wisconsin at Madison, 1993 & J.D. U.C.L.A. He co-founded Gorilla Nation in 2001 along with his business partner Brian Fitzgerald. He currently resides in Los Angeles with his wife and three children.

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