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InContext / An inside look at the business of digital content

Mitigating risk in the age of big tech

May 19, 2021 | By Joseph Lospalluto, EVP Americas – Smart AdServer @SmartAdServerEN

We have all purchased some sort of insurance to protect against the risk of an accident or a total loss. We often do this with little consideration because we all want to be able to sleep soundly at night. Yet few of us think about applying the concept of insurance to the tech that is mission-critical to a company’s revenue. As the dominant big tech players expand the control they have through their browser and ad tech ecosystems, publishers are rapidly losing flexibility. This means the time is now for media owners to think about what their “insurance policy” should cover.

In my last post, I mentioned there would be a lot of uncertainty when operating within multiple sandboxes (aka monopolistic platforms). Frequent rule changes and regulations imposed by the big tech platforms challenge media owners’ core business. And, as publishers must operate their sites or apps to survive, it is important to explore alternatives. 

This new dynamic means publishers will need to change strategies to navigate and extract the most value for themselves. The key to success is remembering that each sandbox, privacy rule, etc, is but one element of that sprawling big tech ecosystem. And the ecosystem itself is where publishers should heighten their focus.

Is your tech stack creating risk?  

The technical stack is the beating heart of any media organization’s revenue production. While it is a necessity, if left as the sole engine for driving a majority of your revenue, it creates the biggest dependency and single point of failure for any media owner. Why? Simply because the big tech platforms control the browser, the buy-side tech, the sell-side tech, and the identity tech… Talk about being a superpower. They own the whole ecosystem. And this has created an imbalance of control. This intentionally manufactured dependency allows big tech to generate vital revenue streams for their benefit first. It also poses a significant risk of revenue loss for publishers.

Operationally, it is possible to switch tech providers, but the stack isn’t easily replaced. I’m not advocating an outright replacement, as that is not the answer for most publishers. A singular tech stack may have worked in the past. However, it’s no longer tenable to depend solely upon a single company acting as judge, jury, and executioner. Publishers must be ready and willing to mitigate risk through diversification. A singular stack will no longer offer rules to monetize all types of traffic.

Protecting against loss

If the future means navigating a world dominated by the big players, the best way to protect your interests is to understand how to work with multiple providers. To start, one should use the main tech stack to extract the most value from what that stack will deliver. For most publishers, GAM serves as the main stack and requires publisher data to feed it. As long as consumers provide consent, revenue should remain intact. However, with the rise of consumer privacy regulations, we will see an ever-growing pool of users who won’t provide consent. 

Without consent and data, a secondary tech stack can complement a publisher’s monetization efforts. Additional value can be unlocked through options for targeting non-consented traffic. In instances of no consent, these impressions can be paired with semantic contextual targeting to help ensure ad delivery. Additionally, this helps protect against potential revenue loss.

Insurance policy: a second stack

A secondary stack may also provide rules that complement the rules of the main stack. For example, content classified with an R rating that gets excluded from one platform can be monetized by engaging another tech provider. The same can be true for niche advertising categories, such as cannabis. As more states legalize cannabis, depending solely on a provider that limits access to sensitive categories can have a large impact on revenue. Diversifying the stack also offers better monetization options for different ad formats and can provide access to different regions. 
So, while it may seem counterintuitive to operational efficiency, leveraging the respective strengths of multiple tech providers can result in greater efficiency and decreases your dependency on a single platform. Understanding what each offers can help you tailor a solution that best protects your interests and insures you against potential risk. 

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