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InContext / An inside look at the business of digital content

How Programmatic Can Help Publishers Unlock New Revenue

July 30, 2014 | By Joe Gallagher, Collective

Effective advertising is based on reaching the right audience. This was true in the 1950s. This was true in 1990s. Today, it is true more than ever.

At the advent of digital publishing, publisher content helped advertisers reach a particular audience. For example, a cooking website would be an appropriate site for a kitchenware maker to buy advertising; inventory on a financial website would suit a luxury watch brand. From an advertiser’s perspective, buying inventory this way was a slow, painstaking process. Orders had to be placed one-by-one, and performance metrics and audience insights were limited.

In the last few years, technology has evolved, changing how ads are purchased and how audiences are targeted.  Programmatic media buying, which broadly describes ad buying with a computer interface, when combined with data lets advertisers reach their intended audience anywhere online, on any device.

With data science, ad technology companies can transform information on individual web behavior into a massive pool of audience profiles. Predictive technology and audience modeling allow for extremely accurate inferences about what users want to buy, where they consume media, and even what they are most likely to watch on TV.

For publishers, does the shift away from reaching audiences via relevant content threaten ad revenue? Does it lessen the value of sites that appeal to specific audiences? The answer to both questions is an emphatic “no.”

Publishers now have more options for ad revenue. By combining programmatic technology with their unique audience data, publishers can now sell audience relevant advertising beyond the constraints of the websites they own and operate. Publishers can monetize their audience profiles anywhere on the Internet, even on TV. This new capability is commonly referred to as audience extension.

Audience extension not only provides a new revenue stream, it can help solve business problems such as insufficient or excess ad inventory. By allowing for increased ad reach, audience extension also helps publishers better cater to their advertisers.

For example, a website dedicated to fitness is perfect for a new age healthy beverage ad. However, advertisers find that full coverage of a target market can’t happen through one web buy. A publisher that uses audience extension can help advertisers reach that audience wherever they consume media. The advertiser’s mission is more effectively and easily completed and the publisher has a new revenue stream, at little cost or risk.

One of the most significant challenges for top publishers is inventory scarcity. To meet demand, publishers are pushing editorial teams—writers, videographers and designers—to rapidly create great content. Typical solutions include: more ads on a page and increased refreshes, which often compromise user experience. Publishers that offer audience extension can sell inventory beyond the limitations of their own sites, increasing ad revenue, without reducing the quality of content and design.

Demand for audiences can even help publishers divest excess inventory. Brands want to reach their target, wherever they are. Thus ad-tech firms will chase that premium inventory, and include it in their ad network.

Regional publishers, whose advantage is coverage over a geographic market, also benefit. Nowadays, regional news publishers often have less local coverage digitally than they did in the days of print dominance.  Audience extension not only solves that problem, it offers a better alternative. For example, through an ad buy with a local publisher, an automobile brand can blanket a geographic zone while targeting users currently shopping for cars. The business goals of both publishers and advertisers are improved.

Economic growth is based on innovations that increase efficiency and open new markets. Programmatic audience extension is this type of advance. It streamlines ad buying, minimizes costs and generates new revenue. It can help publishers prosper, but most importantly, it allows them to better serve their advertising clients.

Joe-Gallagher-2778811-220As SVP of Channel Sales, Joe Gallagher spearheads Collective’s indirect business with an emphasis on developing new channel partners for the company’s full suite of digital solutions. His audience includes digital publishers and media companies that desire to expand their digital offerings with Collective’s audience reach and multi-screen solutions. Gallagher brings 15 years of digital sales and management experience, with senior executive positions at Firefly Video, Exponential, BBE, The Wall Street Journal and Real Media, under his belt. He is also a founding member of 212, New York’s Interactive Advertising Association.

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