With all of the changes and excitement in this new programmatic world, publishers must be proactive and take deliberate steps to develop new partnerships that upgrade their offerings and enable the next stage of monetization.
Let's face it - publishers are finding it increasingly hard to make money from display advertising as old standbys start to dry up. New programmatic advancements are being made in the ad-tech world, which aren't necessarily bad, but mean that in order to earn revenue, publishers will need to get a lot more creative, and develop new partnerships to meet this new opportunity. With more media moving to programmatic, publishers will have to re-evaluate their business to see what changes need to be made to meet the expectations of some of the largest buyers in the world.
Let's take a look at how the publisher/buyer relationship may unfold in the next year as programmatic continues to gain momentum.
Working with ad networks to backfill unsold ad impressions used to be an easy way to support a publisher's site and cover costs. With limited restrictions, the networks made it easy for you to rely on a regular check every month. Since the onset of programmatic, publishers have seen a steady decline in ad network direct revenue as exchanges and real-time bidding (RTB) have grown. Almost weekly, we continue to read about more advertisers who are shifting a large portion of their budgets to programmatic. In order to tap into these budgets, publishers should begin to build relationships with these buyers for consideration for these types of buys.
Along with less direct buys from advertisers, let's think about where ad units are currently served on a page. We've trained a generation to ignore advertisements in the top and right rail and no amount of data science will change this behavior. Yet, with all of the advances in artificial intelligence and advertising, why do we continue to deliver ads into the parts of the page that everyone ignores? Ask around, every publisher will tell you that click-through rates (CTRs) and CPMs for banner advertising are dropping every year.
Viewability has become a growing concern for both buyers and publishers. More viewability vendors are appearing to the point where the Media Rating Council (MRC) has started accrediting vendors to ensure everyone is on the same playing field. It's logical that an unseen ad is deemed useless, and according to comScore, the overall average in-view rate is only 46 percent. Many buyers now pay only when publishers deliver ads above a viewability threshold, such as 70 percent (meaning that at least 70 percent of the ads shown were in view by the user). As more buyers catch onto this trend, the bar is rising quickly and publishers should expect viewability threshold requirements to be above 90 percent. This translates into publishers having less ability to monetize below-the-fold inventory and less revenue overall. Publishers should prepare for this and take stock of what ad solutions do and do not meet higher benchmarks.
Bot traffic is also a big problem and the industry is coming together quickly to address it. Mike Zaneis put it best in his recent piece about what the industry should do to eliminate fraudulent traffic from the supply chain. He puts forth two main points for what needs to be done: we must work together to make sure that we are all speaking the same language of "transaction in only human traffic" and have a set of principals to guide us to identify and filter fraudulent activity. In other words, publishers who may have been mistakenly making money from ads served to bots will see that dry up, too - leaving them scrambling to find new, credible revenue sources.
Ad-tech is changing. The industry will require higher standards and the ad solutions of the past may not apply going forward. Publishers need solutions that are in-view and human. Solutions that make a real impact and are powered by real-time intent. Solutions provided by partners that make publishers at least as smart as the advertisers. So, with all of the changes and excitement in this new programmatic world, publishers must be proactive and take deliberate steps to develop new partnerships that upgrade their offerings and enable the next stage of monetization.
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Eric is the Chief Executive Officer and co-founder of 33Across, bringing 20 years of experience leading successful Internet businesses to 33Across. Prior to 33Across, he was the CEO of Neo@Ogilvy and Executive Director of Ogilvy Interactive North America. Under his leadership, Ogilvy Interactive's revenue grew five-fold from 2003-2007 working with leading brands including IBM, American Express, TD Ameritrade, Cisco, and Yahoo. Eric was COO of Carat Interactive and co-founder and President/COO of Lot21, the award-winning digital agency that sold to Carat in 2002. Eric's career includes leadership positions at CNET, Young & Rubicam, and Anderson & Lembke in San Francisco. Eric holds a BA in Political Science and Philosophy from Boston University.
Hong Kong, May 5-6, 2015
Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.
Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.
May 6, 2015
12:00pm ET/9:00am PT