By Shunning Ad Nets And Exchanges, Can Premium Publishers Monetize Better?
A few weeks back, RTM Daily published a story about NewsCorp.’s announcement that they would no longer be releasing inventory to third parties or ad networks. As Tyler Loechner’s article read: “Ad networks are bracing for the loss of some of the most valuable inventory in the exchange-based media marketplace, as News Corp. takes its secondary inventory back in-house with the launch of its ‘global programmatic advertising exchange.’ The move will be felt by some of the biggest ad networks in the business, including names like ValueClick and Undertone.”
An impassioned conversation broke out in the comments: How dramatically would NewsCorp.’s move affect the digital media industry? Are the networks and exchanges doomed to a life sentence of low-quality inventory as advertisers are forced into direct programmatic buys with premium publishers? Jeff Hirsch of CPXi seems to take NewsCorp.’s move in stride, a sign of an evolution rather than a revolution: “There remains a dearth of quality inventory and tremendous, fragmented demand. Moves like this will likely point out ways that all players in the space can find the right mix of selling, technology, and 3rd party partnerships.” A like-minded Gregory Calvert of eXelate adds: “Ad nets will not be going away (some will), but they will definitely be changing.”
But others (including me) view the change as a positive one. Alberto Aceves from Smaato believes a strategy shift is in order on the publishing side that “would allow a pub to sell 100% of their inventory at a top CPM: scarcity. Show less ads. Improve the UX. The basic laws of supply and demand should apply in this ecosystem.” Martini Media’s own Jason Shugars agrees with Aceves’ comment: “Publishers can maintain, or even improve, site experience while still commanding existing ad budgets. Less ads at existing budgets. A true win for the publisher and the advertiser.”
This last option, in my opinion, is a great one -- and (bias aside) Shugars is right: it really is a win for both publishers and advertisers. He also proclaimed in his comment: “Perhaps the future for publishers looks like a combination of well-formatted native advertising, data-driven real time advertising, and a lack of ads where it doesn't make sense.” I love that vision. Couldn’t we take the lemons of this NewsCorp. news and make some user-friendly lemonade? Think about it: Remove some of the irrelevant, annoying excess “remnant” advertising that has given RTB such a negative reputation -- and replace it with seamless, hyper-relevant native and targeted advertising. On every page, a handful of ads that are uniquely targeted to each user, and to the page on which they appear. This is what we could achieve with programmatic native ads.
I shared my own opinion in the article -- that publishers need to have both a data strategy and their own exchanges, and this is exactly why. With data-driven programmatic and contextual-native advertising, publishers can do more with less. Publishers will remove irrelevant, rarely viewed ads from their pages (which probably aren’t driving revenue, anyway). Pages look better, and for users, feel better. With streamlined inventory, all inventory becomes “Premium,” and higher eCPMs can be charged with this newfound scarcity. That means publishers can earn the same or more revenue with cleaner pages and less inventory to unload. Single share of voice, 100% visibility and high quality can attract and drive pent-up demand from Brand Advertisers.
Critics will argue that (a) this is a pipe dream -- there’s simply too much inventory and too many advertisers with CTR metrics for it to ever work in reality. Others will argue that (b) programmatic native is a contradiction in terms, since native is, by definition, platform-specific. And others won’t even engage in the discussion since they see programmatic as a remnant-only channel to begin with. That’s all fine -- there’s room for everyone’s opinions here.
For the record, I’m not worried about the future of “audience” networks and “private” exchanges. They will survive, and they will continue to sell unsold media and support DR advertisers as well as the Brand Advertiser coming online.
But Shugars’ vision is worth moving toward. Native can scale, and it’s a solid option for publishers who want to monetize efficiently and effectively.