• by Skip Brand , January 28, 2014

Real-time bidding offers indie publishers an efficient way to maximize their revenue stream. “We grew up with the reality of technology stripping out inefficiencies and disrupting established systems. We are not going to fight it. We are going to embrace it and take advantage of it,” says Alex Magnin, CRO of Thought Catalog. “Efficiency is a great thing. One only needs to look at the differences between the net CPMs of old school ad networks and the CPMs of the RTB market to understand the value of programmatic and RTB, especially to an indie publisher like us.”

Thought Catalog has a lean sales force, but boasts a large volume of traffic with over 20 million unique visits a month. “When we look at partners who sit in the middle between us and the end ad buyer, we don’t just test with anyone,” remarks Magnin. “We look for folks that are going to add value.”

Thought Catalog is ruthless about perceiving the value of old-school ad networks in the market that must create more value to get a good price, given the balance of supply and demand, explains Magnin. “We privilege fill rates with our partners more than ever,” he says. “This is another consequence of RTB and the data that’s necessary to go along with the impression. Pass backs cost more than ever to us because of the loss of data and the loss of perceived value and the subsequent drop in CPM you get for a passed back impression on the exchanges.”

The supply side can win back the advantage and add more value in an industry that is boiling over with supply by employing two things: predictive pricing and identification of valuable data. Magnin points to the Rubicon Project and Google as companies that are working on predictive pricing technology, saying, “It’s going to be an arms race.” He also says that publishers have an opportunity to look at the real first-party data being created on their site as an asset that can be sold. “We’ll see less of publishers buying a ton of third-party behavioral data and churning it in their own mill, and more publishers actually focusing on the experience of their user on their site and how that could be used to generate data that’s valuable to the market,” he says.

Thought Catalog has a concentrated young-adult audience with very interesting cultural conversations going on that feed into its data. The publisher is using this insightful position to focus on “tag targeting” rather than the standard “vertical’ targeting. “This allows us to be really nimble about finding pockets of user interest, on top of which may be layered an audience type that a buyer is looking for, and directing that buyer to those pockets of cultural conversation on the site, which in turn gets us higher prices and higher fill rates,” Magnin explains.

As an indie publisher with limited resources, Thought Catalog is investing in a programmatic future. The company is focused on bigger standardized ad formats and places emphasis on viewability.  The publisher also thinks a lot about the below-the-fold (BTF) space, because there is a unique and engaged user down there. “We think that as measurement gets more nuanced the value of the BTF space will increase and we’re thinking about how we can provide a great experience and great units down there in addition to our standard 100% viewability, big above-the-fold unit,” explains Magnin. 

In the end, Thought Catalog’s goal is to be a professional place for all sorts of compelling voices and conversations. Today those conversations are among Millennials and young adults. “But in five or ten years, who knows?  As long as we always make available to ad buyers the ability to tap into relevant cultural conversations and do so in an effective and efficient way, we’ll be good,” concludes Magnin. “Obviously, automation is a big part of that.”