AdExchanger: Other “content and commerce” approaches, like the one Lucky Magazine tried, haven’t worked out well for publishers. Why?
GREG MASON: This is a classic case of content companies that have done nothing more than put buy buttons on their pages. Gawker has positioned themselves as a content and commerce company. They tout some good numbers, but have done nothing more than put Amazon buy buttons on their pages.
The poster child was Thrillist. The reality was Thrillist and JackThreads were two completely different businesses. They used Thrillist as a marketing vehicle for JackThreads, but they were never brought together as unified entities, so it’s no surprise they split that up.
Purch raised $135 million in June last year, making it part of the investment trend in digital media. What’s your take what’s going on in the space?
The current climate reminds me of the late ’90s, when a lot of companies seemed to have ridiculous valuations and growth rates could never support the valuations. What adds to the stress is that these thousands of companies are competing for the 40 cents on the dollar not going to Google or Facebook.
Consequently, there are too many mouths to feed off too few dollars, regardless of how fast the dollars are flowing into the medium, which is a risk for anyone who is predominately dependent on brand dollars moving into the medium. The other dimension is that although there are brand dollars moving into the medium, even digital video is having to prove itself with some form of ROI metric. It’s one thing to sell a campaign. It’s another to renew a campaign.
Have you been able to improve monetization of your publisher acquisitions post-purchase?
It’s been substantial for Tom’s brands and AnandTech, in particular. AnandTech had no programmatic advertising on the site and no affiliate or referral links in the network. They were really undermonetized. That’s something we try to pursue when we make an acquisition of that nature. Because of our diversification of revenue, we have the highest revenue per thousand visits I know of.
Purch has invested in technology, including with your header-bidding solution RAMP. How will that differentiate you in today’s publishing marketplace?
We were pretty early into the header-bidding landscape because we wanted to create more demand sources for our non-direct-sold inventory. As the result of the tech we’ve built, we saw 20 to 30% lift in eCPM for all that inventory. It was really a yield effort. We continue to develop the capabilities to adjust price floors and optimize inventory at scale and have an advanced team doing that. The next iteration of RAMP is being able to apply that to all revenue sources on the page, where it can dynamically optimize the marking messaging for the revenue lines, based on where we can make the most money.
Are you facilitating much mcommerce?
It’s developing. Nearly 50% of lead gen is coming from mobile, which is significant. In lead gen, 30% of traffic is mobile, and we buy a bit of SEM that is picked up off a mobile phone, and traffic is closer to 40% to 50% mobile. With mobile lead gen, things like click-to-call are taking off for us. Instead of passing qualified leads to the salesforce, you can call the salesperson and get the information you need.
Are you competing against Amazon?
I don’t think so. What Amazon is capturing with their advertising business is the flow of in-store co-op dollars moving to digital. I wish I could say we were competing for co-op dollars, but we aren’t. We do drive upward of nine figures in gross sales to Amazon on an annual basis through the “buy” button, but that actually has the least value of everything we do to earn revenue.
What are publishers doing wrong right now?
They are focusing on eyeballs. They are not focusing on engagement. That is a big change we are going to see going forward. Anyone can get eyeballs. You can do it through legit BuzzFeed ways or black-hat SEO, but audience is a commodity. Engagement is where the value is going forward. To drive the mindset around engagement, our thinking has moved to a service mindset. If you really hope to have meaningful engagement with or long-term loyalty to a publisher, you have to think, “What are the problems I can solve for a consumer?” That’s more of a software engineering mindset to publishing.
What’s your take on platforms like Facebook Instant Articles or Snapchat Discover, where publishers are increasingly going to find audiences?
It’s not that different from 10 to 15 years ago when portals controlled a lot of traffic. When publishers did business development deals to make content available in the context of the portal, the question was, “Are we giving them the keys to the kingdom?” I think some of the dynamics are similar. Portals are on the decline now and Google and Facebook are on the ascent. There is the need to expose content to consumers wherever they are congregating. We will be participating in Facebook Instant Articles. We are close to AMP. We are in Apple News. I like to think of it as aggressive experimentation. Every publisher has to participate in these emerging ecosystems.
How will publishers survive and thrive in today’s climate?
Because of the fragmentation in the ad market and the volume of companies competing for the pie overall, it’s imperative that publishers ask much harder questions of themselves, to define what genuinely makes their value prop unique for consumers and marketers. In our case, we’ve steered the development of our brands where there is a natural bridge to products and services, and we can attract a consumer base and that in-the-moment purchase intent.
This interview has been condensed and edited.