Advertisers that solely opt to access publisher inventory through the open marketplace (OMP) face significant addressability problems. While the OMP completely changed the way media owners and advertisers collaborated, becoming the “path to least resistance” for both buyers and sellers, it is now creating more resistance. But as with so many things in life, what’s old is new again and direct-sold strategies are delivering benefits to publishers once again.
Open programmatic no longer serves its purpose
Even with Chrome’s third-party cookies still in play, only 30% of audiences on the open web are targetable. This is because 40% of Chrome’s users make their data unavailable to advertisers and the Firefox and Safari browsers already operate without third-party cookies.
Open web addressability is a big problem: Why would advertisers want to use the majority of their ad spend to reach 30% of audiences? There is also no guarantee of premium inventory and placements as well as a lack of control and transparency in the OMP as a result of ad fraud and third-party targeting that doesn’t deliver on the audience advertisers are trying to reach.
In light of this, publishers are re-evaluating their strategies. For example, one parent and lifestyle publisher made the proactive decision to reduce their reliance on the OMP, not just because it isn’t a reliable source of revenue, but because they can’t control their narrative with buyers in that environment. Working with advertisers directly means they get to highlight non-endemic audiences at a scale they can achieve.
Publishers need to make revenue and ensure they are giving their audience the best possible experience, while advertisers only want to reach the most relevant people within this audience. The lack of addressability in the OMP leads to failure on both fronts.
The building blocks of going direct
Between October and November 2022, the IAB surveyed 223 buy-side ad investment decision-makers and found that 53% planned to increase their focus on ad placements with publishers using first-party data. According to a report by Adweek, brands like Hershey’s, which spend between $350M- 450M annually on advertising, realise they are spending a lot of money and not showing up in premium environments. Hershey’s now has a target of buying 80% of addressable media via private marketplaces (PMPs) and only 20% on the OMP.
Publishers’ first-party datasets—built on authenticated, contextual, declared, and behavioural data—can be leveraged by advertisers directly to activate unreachable audiences. But for this shift to work, publishers must continue encouraging buyers to see the benefits of working directly with them and perhaps even educate an entire population of buyers that have worked primarily with OMP.
To do this, publishers need to satisfy advertiser demand by providing quality audiences from interest, intent, and in-market audiences, provide scale and ensure reach across all relevant platforms and browsers, tell rich and compelling stories about their audiences via deep insights, showcase how audiences are built and be transparent about audience creation, and demonstrate how their first party audiences can help deliver and improve performance mid-flight and achieve advertiser objectives.
Reaping the benefits
Publishers already working this way benefit from using their first-party data to drive direct deals, and buyers are seeing an improved performance. Trusted Media Brands (TMB), whose titles include FailArmy, Family Handyman, Reader’s Digest, and Taste of Home, have been working on their data strategy to ensure they can understand audiences across all browsers, especially in cookie-blocked environments such as Safari.
TMB now delivers direct-sold campaigns 94% of the time using first-party data. The work has resulted in a 140% increase in revenue from deals using first-party data, a 31% increase in RFP win rate when data is on an IO and a 2X increase in deal size when data is present on an IO vs no data.
Similarly, Gumtree is seeing results from using first-party data in direct deals, with a 36% increase in click-through rates in Q1 2023, and a 14% increase in average cost per thousand impressions.
The driving force behind addressability
The best way for publishers and advertisers to maximize their revenue and budgets, respectively, is to focus on addressability. First-party data and direct-sold will be the driving force behind that.
Direct deals deliver quality first-party data and scalable first-party audiences that meet advertisers’ needs, increase transparency, and control, and enable access to premium inventory and ad placements. Working direct also results in insights and reporting into audiences on how they inform an advertiser’s targeting strategy. Advertisers know where their ad spend is going and which audiences they are reaching with more accuracy.