“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is by Paul Bannister, co-founder and executive vice president at CafeMedia.
For years, programmatic promised to lower costs and make transactions easier while generating the same amount of revenue. But that wasn’t the case. It created great operational complexity and made doing private deals painful, while revenue rang in at a fraction of the levels seen in the days of IO-based business.
Over the last year or so, technology and processes have advanced to where programmatic-first publishers can succeed, reaching an inflection point from the prior world of struggling to get by. But getting to this point requires in-depth market knowledge, strong partnerships and serious technical chops.
Enabled By Header Bidding
Sometimes it takes years for a technology’s true potential to be revealed. When header bidding came to market around 2014, it was clear that it would help drive publisher yield and give better access to buyers. What wasn’t clear was all of the other issues it would unleash.
Header bidding enabled private marketplaces (PMPs) to become value drivers and forced ad servers to be smarter. Header bidding gave publishers much deeper insight into the market value of each impression. This is critical for driving value, because if publishers don’t know the value of what they’re selling, the market will take advantage of them.
Header bidding also created massive competition in the market. While in some ways the choices are overwhelming, having a market with multiple strong competitors, a host of secondary players and a large cohort of supporting players is far better than a market with just a handful of powerful companies that don’t need to compete.
All of these market and technical changes that were driven by header bidding have finally allowed publishers to cross the inflection point from break-even to business-building. But getting there isn’t trivial.
Getting To The Promised Land
A business plan to optimize revenue as a programmatic-first publisher has at least three main components.
First, publishers must choose a high-performing ad layout and format for their site.
Second, they must train their sales teams to sell PMPs and programmatic guaranteed deals, and train business development teams to build strong relationships with exchanges and other partners.
And finally, they must build technology to manage and optimize all points in their ad stack, from wrappers and analytics to flooring and code timing.
Vital Components
Every site is different, and understanding an audience’s opinion on advertising and its engagement patterns is key to determining the right type of ads and layout. There are certainly best practices that are useful to apply, but ultimately every site must be customized to match the audience’s needs.
A strong sales and business development team is another important part of the puzzle. Working with advertisers – either brand-direct or trading desks and agencies – can unlock significant budgets and allow publishers to sell the unique value of their audiences. Business development teams can build strong relationships with supply-side and demand-side platforms to ensure their properties are presented in the best possible light, and with the best possible terms.
And technology is the underpinning for all of this. A strong header bidding-enabled ad stack starts with a publisher’s choice of wrapper(s), its own customization and any logging and testing framework. Optimizing their partners’ platforms is equally important in terms of ad server setup, wrapper timing decisions and more.
All elements of a monetization plan must be backed up with analysis. Publishers must measure, monitor and maintain everything, while ensuring that the decisions they made six months ago are the right decisions today. Publishers must constantly test and refine what they’re doing because the industry changes quickly – if they’re not ahead of the market, they’ll be behind.
Buy Or Build?
As complex as this may seem, more and more publishers are making it work. It does require investment and focus, but it can pay off in a big way. One of the main challenges to get to this inflection point is the difficulty of running both the content and audience development side of the business, and the ad revenue side. Each company must decide how much of each they want to own for themselves and how much to outsource to partners.
In almost all scenarios, publishers need to find the right partners – building their own ad exchange is rarely the right approach. Each company must decide how comfortable they are giving up certain amounts of control versus how much they feel confident they can excel in each area.
Any number of possible combinations can work and, if they execute well, publishers will find themselves on the road to success.
Follow Paul Bannister (@pbannist), CafeMedia (@CafeMedia_) and AdExchanger (@adexchanger) on Twitter.
