Reach Extension Can Help Publishers Supersize Their Incremental Revenue

frostprioleausellsiderThe Sell Sider” is a column written for the sell side of the digital media community.

Today’s column is written by Frost Prioleau, CEO and co-founder of Simpli.fi.

When visiting McDonald’s, you could once count on hearing these six words: “Would you like fries with that?”

This familiar phrase helped McDonald’s generate immediate high-margin revenue in the 1970s without making incremental investments in its infrastructure. It became the benchmark of upselling across industries, a billion-dollar question that generated billions of dollars in incremental revenue for McDonald’s.

Given the shift to mobile, programmatic buying and competition-lowered CPMs, many digital publishers are also looking for ways to generate incremental revenue and margins. One solution they’re increasingly turning to: reach extension.

In the publishing world, however, the upsell question often sounds something like this: “Would you also like to target your audience across the rest of the Internet?”

While many publishers are already well down the path of selling advertising packages based on audiences, others are sticking to the practice of selling only the impressions on their owned and operated sites. Publishers not engaging in reach extension are putting their sales teams at a disadvantage, as they are limiting their ability to deliver highly targeted audiences at scale. Also, these publishers are limiting their own ability to maximize the return they generate from the costs of fielding an expensive direct sales effort.

Ancillary Benefits

The extended targeting of audiences on sites that are not owned and operated by the publisher can be helpful to publishers in many ways. For example, consider the supersized I/O. The most basic benefit from reach extension is the same one that McDonald’s sought: increasing average order size. In this case, the average order size is increased by selling and delivering impressions displayed on other sites.

Reach extension can help publishers improve performance and drive repeat business. In some cases, impressions that deliver the best performance, whether based on CPA, CTR or another metric, are those that come from another site. This is especially true when the highest-value users can be served additional impressions on other sites. By increasing performance of the overall campaign, publishers increase the chance of winning the renewal and maintaining the relationship for other opportunities.

Reach extension can also enable omnichannel marketing. Advertisers are increasingly demanding that campaigns are optimized across multiple media and device types, including banners, mobile, social and video. This can be difficult for campaigns where most conversions come from desktop impressions, while the publisher mostly offers mobile or video. Reach extension can bridge this gap.

Many Flavors

Publishers can leverage lots of opportunities to execute high-performing reach extension campaigns. By using data beyond the standard demographic data used in most look-alikes, publishers can create more relevant reach extension audiences for their advertisers.

They can, for example, create look-alikes from advertiser converters. In addition to targeting users who already visited an advertiser’s website, the publisher can target other users who have searched with the same terms or those who have visited the same sites as converters. Look-alikes on converters can be the most effective audiences to target.

Publishers can also create look-alikes from publisher pages or section visitors. If a publisher is selling an audience on a particular section of its site, it can provide a reach extension audience with the same characteristics as those who visit those pages or sections.

Finally, publishers can create look-alikes from geofenced audiences. Publishers that are selling geofenced mobile audiences can target users with similar geolocation, search and site visitation profiles.

The most unique reach extension offering that publishers can deliver is one that leverages look-alike models that take advantage of their own data. Travel sites have been doing this for a while, using the data from user travel searches to target those travelers with ads featuring flights, hotels and rental cars in the specific destinations that they searched. Auto configuration sites do the same with ads for specific auto models. All publishers can emulate this by building look-alike audiences from the relevant traffic on their own sites.

To be sure, there are some challenges to executing reach extension using look-alike data. Publishers need to insert data collection tags either on their own sites or their advertiser sites. Also, sales teams need to be trained to sell to audiences across many sites, as opposed to just impressions on their owned and operated sites.

Although delivering highly targeted reach extension is definitely more involved than hawking fries at the drive-through window, publishers are finding it to be a profitable way to extend their offerings and increase their share of wallet at the same time.

Follow Frost Prioleau (@phrossed), Simpli.fi (@Simpli_fi) and AdExchanger (@adexchanger) on Twitter.

 

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