Commentary

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.”

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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. 

 

 

10 comments about "By Shunning Ad Nets And Exchanges, Can Premium Publishers Monetize Better?".
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  1. Bob Gordon from The Auto Channel, September 17, 2013 at 11:42 a.m.

    More thought as to where and within the "right" content will be possible when people talk. Lets make advertising once again an art.

  2. Christopher O'Hara from Krux, September 17, 2013 at 11:45 a.m.

    I like where you are going with this, Jason. By "programmatic premium," it sounds like you mean putting mid-premium and premium inventory inside private exchanges, rather than a "programmatic direct" approach that streamlines direct sales? Not that either appraoch is wrong...just curious.

    I do agree that "programmatic native" is growing. It doesn;t get more programmatic than sponsored posts and tweets, and it looks like those are working well for marketers so far.

  3. Jay Sears from Rubicon Project, September 17, 2013 at 11:47 a.m.

    Plenty of folks heard this tree fall. And it is for the better.

    The future is automation brings both efficiency (workflow where sellers have more time to sell vs. busy work) and efficiency (programmatic where sellers can leverage and extract value for both media and data). Same thing for buyers.

  4. Mike Einstein from the Brothers Einstein, September 17, 2013 at 1:12 p.m.

    Seems to me that "premium", like beauty, is in the eye of the beholder. Premium content, therefore, is anything a consumer chooses to watch or read. Stated another way, what makes the WSJ any more "premium" than a porn site if the same guy chooses both? And, what if that same person spends more time on the porn site? Simple logic dictates that an advertiser has a better chance of reaching him there.

  5. chris shirling from New Media Shop, September 17, 2013 at 3:16 p.m.

    Mike... The WSJ is read by people who are well educated, have high paying careers, have more disposable income, and are more likely to spend that money on a wide range of products and services that advertisers are promoting.

    Porn watchers certainly span a wide range of internet users... many of them teenage boys.. many of them adult men who live in their mom's basement.

    Not a lot of WSJ readers live in their mom's basement and watch porn.

    Not all people are the same.. not all sites are the same.. not all audiences on the different sites are the same.. Otherwise, you would see the Fortune 500 companies advertising on porn and gaming sites because they can get that inventory cheaper. Ad networks have been parasites on publishers who have taken a big hit on their business model over the last five years. These changes are good for the people who create the content we all read on the web.

  6. Michael Lynn from Storandt Pann Margolis, September 17, 2013 at 5:48 p.m.

    Chris, you got way too literal. Mike's basic point is dead on...especially in today's media marketplace. Most reps never get a chance to sell their "premium" inventory to the media groups. The RFP is electronic, just like the marketplace. The shift is to programmatic and this is not a pendulum. It will never return to the old way of planning/buying. "Premium" is a perception not a reality.

  7. Mike Einstein from the Brothers Einstein, September 17, 2013 at 6:16 p.m.

    Chris, your remedial Advertising 101 spiel notwithstanding, your comment shows a wholesale misunderstanding of my intended point, which was simply to suggest that "the content we all read on the web" includes both what the MSM considers "premium" and what it has labeled as objectionable. The fact that the same people consume their share of both is a sober reality you can choose to accept or deny. You can also choose to do your homework before you next make a fool of yourself in public by insulting the wrong guy. But in the meantime, you should check out the 2/2/2010 story in the WSJ about SEC staffers being fired for watching porn while at work.

  8. Ken Nicholas from VideoAmp, September 17, 2013 at 7:16 p.m.

    Naturally, huzzahs from a vendor in the NewsCorp program are expected here.

    With the all churn in AdTech lately, one bar to a;sp measure against might be, 'Is it Profitable?', instead of such a focus on, 'Are the AdNets Dead?'

    Let's give NewsCorp time to play with this, see how it goes for them...and if it is indeed, profitable or not.

  9. chris shirling from New Media Shop, September 17, 2013 at 7:28 p.m.

    For 5+ years, there have been ad networks convincing media buyers to not look behind the curtain and their product is as "premium" as the next. They have benefitted from far too many premium publishers dumping their inventory into that mix. "yes... our network includes all the top sites," and that pacifies skeptical media buyers and validates the ad network sales pitch. The Chief at Pubmatic has said publicly that the news sites like Newscorp, others are the ones raising the overall performance of ad networks. In a relative short amount of time, media buyers will get a clearer picture of what premium is as premium is removed from the ad network herds. They won't see it immediately, but they will see it and certainly the digital press will cover it and buying patterns will quickly evolve. I should have laced that into my "guy in the basement watching porn" bit so everyone would get it. Having said that, did the entire staff at the SEC get fired? You would think so if you believed everyone was watching porn as much as they were reading the WSJ.

  10. Mike Einstein from the Brothers Einstein, September 17, 2013 at 8:30 p.m.

    Chris, take a lesson from the Starkist folks who knew 50 years ago what I'm trying to teach you today about audience dynamics: Starkist doesn't want tunas with good taste...Starkist wants tunas that taste good.

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