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Publishers: here’s how to build a resilient audience extension offering

September 26, 2022 | By Pete Rooney, Head of Solutions Engineering – ArcSpan Technologies, Inc. @arcspan

The case for programmatic media buying typically references a common mantra: “Right person. Right time. Right place.” Marketers enjoy the control that programmatic media buying affords them. They have the ability to value each ad impression independently on the basis of the user, the point in time within their purchase journey, and the quality of the media environment, among several other factors.

However, if pressed, many marketers would be willing to sacrifice “right place” in favor of “right person” and “right time”. In other words, they value the user and information about that user more than the location where they find said user.

Brands, and their agents, will frequently make room for strategic partnerships with publishers and content creators. However, the time and resources they have invested in developing audience insights and segmentation practices dwarfs their efforts to manage these strategic relationships. Advertisers have built out CRM databases and partnered with third parties to build robust customer profiles. They have partnered with data on-boarders and identity graph solutions, third party data providers and clean rooms. And yet, there is still an appetite for more targeting information, unique audiences, data points, and triggers – some of which are unique to publishers.

This focus on audience above media environment may represent a risk for publishers that are reliant on sponsorships and page takeovers. Those publishers may see performance media dollars redistributed to a wider swath of publishers where marketers can find their precise audience targets. However, it also creates opportunities that some publishers have already seized.

Audience extension: opportunity and trade-offs

One such opportunity that more publishers should be taking advantage of is the creation of an audience extension practice, in which a publisher makes their audience available to advertisers while those users are outside of their owned and operated domains. This practice can create a valuable stream of incremental revenue. It can be particularly valuable for publishers with access to unique data about their users, whether it’s in-market for products and services, interests, or authentic age and demographic information. However, there are several factors to consider when building an audience extension offering and ensuring that it is resilient in the face of cookie deprecation.

To make this work, publishers must be willing to accept certain trade-offs. Historically, publishers have expressed a few key reservations about launching an audience extension business. They cite concerns that it will detract from their direct sales business and loss control of their audiences among others.

These reservations can be addressed to a certain degree by how the offering is productized. For example, publishers can restrict audience extension to media plans that also include ad placement on owned and operated properties. They can also confine the activation to managed service rather than advertiser self-service, and limit advertiser tracking tools such as DMP tags. Ultimately, publishers will need to balance these tradeoffs in order to develop successful programs and earn recurring business from advertisers.

Getting audience extension right

Beyond the tradeoffs, there is more to consider as publishers look to stand up a successful audience extension operation. First, it will require sales and marketing resources that can effectively connect a publisher’s audience composition to a marketer’s target definition. Demonstrating the uniqueness and integrity of the publisher’s audience segments, as well as the potential scale, is critical to creating demand.

Second, it is important to have the tools to develop and configure audiences that meet buy-side criteria, as well as scale those audiences via sophisticated look-alike models. Third, it’s critical to have skilled and experienced execution teams. While Demand-Side Platforms (DSPs) have become more user-friendly over the years, teams that can execute quickly and flawlessly will have more success in maintaining advertiser relationships.

Finally, publishers need to maintain a focus on measurement and analytics. This approach can position an audience extension offering as more than an add-on audience reach tactic, but rather a performant strategy that drives business outcomes for marketers.

Preparing audience extension for the future

As we look to the future, publishers should be thinking about how existing audience extension offerings need to evolve moving forward. As third-party cookie deprecation continues to erode cross-domain targeting, publishers that execute audience extension programs through Demand-Side Platforms (DSPs) will face the same challenges that marketers face. They will struggle to deliver advertising at scale, particularly on Safari and Firefox, and they will find it difficult to demonstrate performance metrics that advertisers have come to rely upon.

Also, publishers that want to preserve their audience extension revenue streams will need to explore and test alternative methods of targeting, whether it’s an alternative identifier based on e-mail addresses or an anonymized identifier generated by the publisher. A publisher’s audience extension business can act as a solid testing ground for deploying alternative ID solutions, allowing publishers to see the end-to-end process and understand scale and performance.

Although Google recently announced a delay in Chrome’s cookie deprecation timeline, marketers are using this time to do more head-to-head testing between cookie-based buying and alternative IDs. They’re also preparing for measurement and optimization in the absence of third-party cookies. And they’re shoring up first party data and experimenting with clean room solutions.

Likewise, publishers with a vested interest in growing their audience extension business have an opportunity to prepare. Publishers will need to balance trade-offs as they decide which methods they use and who they partner with as third-party cookies continue to dwindle. Now is the perfect time to test and understand the revenue implications of shifting to alternative methods of executing audience extension programs.

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