Mad Channels for Mad Men

The Sell-Sider"The Sell-Sider" is a column written by the sell-side of the digital media community.

Today's column is written by Tom Shields, Co-Founder and Chief Strategy Officer of Yieldex, an analytics tools provider for sell-side, yield optimization.

Selling digital used to be easy: how big is the budget, and do they want the News section, or the Sports section?  Anything you couldn’t sell this way became “remnant” and went to an ad network.  Today we can point to nearly a dozen different ways to sell digital.  Have you taken a look at all of these, and figured out how they can increase your revenue – or decrease it?

Many different options have emerged for unsold inventory, from networks to SSPs to public and private exchanges.  Growth in different media types, including video, mobile, apps, and tablets, have created different sales challenges.  And the rise of audience targeting has created conflict with those who have traditionally sold content and context.  Finally, some folks are looking outside their walls for more inventory to sell.  Let’s take a quick look at these different dimensions:

Unsold inventory.  Lots has been written about secondary channels like networks, exchanges, and SSPs.  The interesting question for many publishers is when these are combined with different media types – unsold video and mobile may be higher yield on specific networks or video- and mobile-only exchanges.  The answer seems to depend on whether the somewhat increased CPM makes up for the additional operational costs.

Media types.  Some publishers have a separate team to sell mobile, app, and tablet inventory, while others have divided video from display.  The challenge for media types other than display is they are often still small (though growing), so they are hard to forecast. Small size also means they are often sold-out, and that it can be hard to strike larger deals with buyers.  Since small deals take just as much work as bigger ones, the margins are often squeezed by support costs.  This is an area where many publishers are experimenting and investing.

Audience targeting.  Some publishers have chosen to create a separate sales force for audience or interest-based targeted ads.  The objective is to convince advertisers currently buying audience on exchanges to pay somewhat higher CPMs in order to be certain of their premium context. In some cases these sales forces offer additional advantages, such as guaranteed impression buys, rich media or expandable ads, and companions.  This can be an effective way to upsell otherwise remnant inventory, but care must be taken not to cannibalize other premium contexts.

Audience extension.  Most publishers don’t create a separate sales team for audience extension, preferring to include it as “value added” or lower-cost inventory to supplement high-value sold-out sections or audiences.  In this way, publishers can increase total deal size, or win bigger deals, usually at the cost of a lower margin.

With audience and context targeting on web, mobile, video, and tablet media, and direct or secondary channels like exchanges, networks, and SSPs, what’s a publisher to do?  Here are some suggestions:

  1. Create clear lines of demarcation
    The main challenge with sales channels is channel conflict, as any experienced sales manager knows.  The key to minimizing conflict is to create clear lines of demarcation, and up-front mediation capabilities to handle the inevitable ones that do arise.  For example, content sales and audience sales are selling the same impressions, just in different ways, so what happens when they try to reserve the same inventory?  You don’t want your audience group selling for $2 CPM to a client that would have been willing to pay $10 CPM for a content channel?  Without clear lines and strong management, more sales channels can actually lower revenues.
  2. Enable cross-channel communication and training
    Sales people sell what they know, so training them in these different ways of selling is crucial to maximizing revenues. Sales folks from the print or broadcast side of the business may know the content cold, but be unaware of the audience targets or geographic overlays they can offer for higher CPMs. Big buyers often want to buy across many of these different channels simultaneously, so cross-channel communication is essential to landing these deals.  As an example, upselling audience targets as part of a larger deal containing video and sponsorships can increase overall CPMs dramatically.
  3. Look at data across channels for big yield gains
    Some channels have good internal optimization – SSPs for example.  But to find big yield gains, look across channels.  Audience segments that are currently going to the exchange may be much more valuable when added to video deals to create a lower blended CPM.  Packaging sold-out tablet inventory with related mobile channels can increase overall revenue.  Publishers should invest in people and tools to report CPMs, sell-throughs, and overall revenues across channels and inventory overlaps to spot these opportunities.

New channels are appearing all the time, and wise publishers are experimenting with them all.  Ensuring you have clear lines of demarcation, good communication, and good analytics can help you ensure that you are increasing your revenue, not just moving it around.

Follow Tom Shields (@tshields), Yieldex (@yieldex) and AdExchanger.com (@adexchanger.com) on Twitter.

 

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