This post originally appeared in Exchangewire
Looking at the ad tech landscape, I cannot help but be struck by the number of dubious companies vying for a cut of the marketing dollars publishers are trying to attract. I’m speaking about technology companies with extensive and slick marketing campaigns, offering generic promises to help publishers “monetize,” “bring demand,” or “leverage data to drive premium value.” And unfortunately, publishers have taken the bait.
The harsh reality is, according to a recent IAB study, only about 45% of working media dollars are finding their way into the pockets of the publisher. The rest is being syphoned by various players for which, frankly, their value to the publisher is suspect. In an attempt to reclaim the other 55%, a publisher's all-too-typical response has been to increase the ad load on their site, or to adopt a less discerning approach by allowing low-grade demand access to their inventory, diluting the quality of user experience and ultimately frustrating the only constituent in the ecosystem that really matters - the consumer. This has led to a massive rise in ad blocking, causing even more revenue fleeing the pockets of the publisher.
Clearly this isn’t working and something needs to change. Luckily, publishers do have options, but it all starts with asking the right questions. As a publisher, you need to take a critical look at your ethos, making sure every single partner you work with is completely aligned with your business objectives as their first priority, transparent in their business model, and committed to a high-standard of ethics.
While there are a number of technology point solutions we could call out, for brevity sake, I’m focusing on the SSP, or Supply-Side Platform.
Teach A Man To Fish
When evaluating an SSP, ask yourself, “how much value are they creating versus what they are extracting?” If you are a broadcaster or premium publisher with great video content and audience, do you really need to cede control - and revenue - to a network to go out and sell your inventory? Often draped in the promise of driving demand, or creating a premium by incorporating a unique data position, they purport to do what you couldn’t possibly do on your own: sell your primary asset (your inventory) to trading desks, agencies, and marketers. Packaging your inventory in an attractive way to the right buyer with the right price is far from daunting, and certainly shouldn’t be outsourced. It’s the same principle of giving a man a fish vs. teaching him to fish. Consultative partners can arm you with the in-house expertise and skills required to manage and generate your own demand, providing advice on packaging and pricing strategies. In the end, you’ll hold on to a lot more of those working dollars.
Credibility Is Currency
One of the other challenges with outsourcing sales to a network or stand-alone SSP is that inventory often gets diluted by the other clients of the SSP or network. Again, the credibility that comes with an established and well-respected premium broadcaster and publisher is more than enough for them to trade their own inventory. Letting a third-party platform create aggregated-audience packages that span a number of sites isn’t maximizing that position. Even the mere association with some networks and SSP’s will be enough to dilute the value of your inventory. As the saying goes, “Be wary the company you keep.”
Ask The Tough Questions
Lastly, and perhaps most critically, there’s a profound lack of transparency, and self-interest is driving the nature of commercial arrangements. Premium suppliers need to start asking tougher questions, especially when aspects of how their dollars are sliced and diced is not 100% clear. How is your inventory being priced in DSPs? What is the value for each SSP-imposed fee? SSPs and networks require huge sales team to operate their demand-driven approach. How are they paying for that? It’s either that they charge the publisher or broadcaster unnecessarily large fees, they have another potentially conflicting revenue stream, or they employ a mark-up business that is hidden somewhere in the wings. None echo my first point of finding partners that make your business objectives their first priority.
When Standalone SSPs Make Sense
All this said, there is a time and a place for demand-driven, stand-alone SSPs or networks. When publishers or broadcasters are still establishing their brand in the market and don’t yet have a compelling offer to attract the mindshare of buyers directly, there is benefit in outsourcing the demand efforts to give their ad business a jumpstart.
There’s no arguing programmatic is the future of advertising, and the industry is certainly becoming familiar - if not eager - to transact in a more programmatic fashion. Magna Global
reports programmatic display and video advertising makes up three-quarters of all digital ad spend today, and by 2019 will represent nearly $47 billion with more than 50% of all video advertising traded programmatically. That said, it’s R.I.P for standalone SSPs. Just as the ‘online’ in online video is redundant, soon the ‘programmatic’ in programmatic advertising will be as well. TV is TV regardless of device, online or linear, and advertising will be advertising regardless if sold programmatically or direct. Ad platforms in the future will reflect this, merging all capabilities of the ad server and SSP into one, giving broadcasters and publishers more visibility and control over their entire inventory - and above everything, claim back more of their hard-earned digital dollar.