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Perspectives

DCN’s must reads: week of October 21, 2021

Here are some of the best media stories our team has read so far this week:

Perspectives | Supporter Spotlight

Engaging audiences: How publishers can shift heated arguments into meaningful discussions

The Internet is renowned for bringing out our worst instincts. When anonymous strangers with differing views converge in online community forums, the result is often heated arguments that can quickly descend into insults, threats, and abuse.

Once upon a time, that tendency to “pile on” seemed like a good thing for publishers. If strong emotions drive engagement, and engagement means more page views and ultimately more revenue, then stirring up angry debate must be good for business, right? 

The risks of allowing online toxicity to flourish

Is it actually effective to sow controversy in an article, then sit back and let commenters fight it out below the fold? Based upon what we’ve seen over the past few years, not very. 

For one thing, social platforms and publishers have had to contend with advertiser boycotts, as brands rush to distance themselves from hate speech and misinformation. Publishers like The Atlantic and Vice, meanwhile, have felt they had no choice but to shutter comments sections completely, cutting themselves off from their readership in the process. 

There’s another, much more appealing option: building a safe and healthy online community of engaged commenters. Our research shows that quality conversations and respectful debate actively attract engaged users–and engaged users typically view 4.6x more pages, spend 3.6x longer on-site, and drive 3.2x more revenue than non-engaged users. 

What drives incivility in online community forums?

So how can publishers turn heated arguments into quality discussions? First, it’s useful to understand what drives online incivility. Then these underlying drivers can be taken into account in audience engagement strategies. Here are three for starters:

  • People behave in a less inhibited way when they interact online with people they don’t know and are never likely to meet, in an environment where they can be anonymous and where there are few or no repercussions for behaving aggressively.
  • People get addicted to being right. Winning an argument can produce a flood of feel-good hormones, similar to winning a bet. As with gambling, that feeling can become all-consuming, leading to a greater focus on “winning” than on debating respectfully.
  • Comments without context get misinterpreted. While it may not be 100% true that 93% of communication is non-verbal, a comment can seem hostile when elements like body language and tone of voice are missing. And that, in turn, can promote an aggressive response.

How to shift heated arguments to meaningful discussions

There are several options open to publishers who want to elevate the quality of debate in the communities they host. Here are four approaches that we believe in at OpenWeb:

Encourage visitors to become registered users

When people feel they belong to a community, and get to know their fellow community members, the online disinhibition effect starts to fade. Interactions between community members become more civil as a result. But that’s not the only benefit. Registered users are also more likely to return more often, spend more time on-site, and deliver more revenue than non-registered users.

Have editorial teams join the conversation

Editorial engagement is a powerful way to increase the quality of online debate. Editorial teams set the conversational tone and guide discussion by responding to the highest-quality contributions. We’ve found that editorial involvement of this kind typically leads to a 17% decrease in toxic comments. 

Define and reward civility

Most people don’t come to an online community forum looking for a fight: often, it’s the atmosphere they find on the site that tips them into incivility. Sophisticated moderation technology can help publishers cultivate a civil atmosphere. For example, you can:

  • Make it clear what kinds of language and behavior are encouraged, and what won’t be tolerated. For example, our OpenWeb Clarity Mode puts community guidelines front and center, ensuring everyone knows what’s expected of them.
  • Invite users to rethink their comment before posting, if it looks like it may breach the community guidelines. This draws on the “nudge” theory of behavioral economics, which holds that positive reinforcement at the right moment can spur more considered decisions. When we experimented with such prompts across some of our top publishers, we saw a 12.5% lift in civil and thoughtful comments being posted.  
  • Use multi-layered AI and ML-based moderation to analyze, sort and highlight comments based on their quality rather than their propensity to incite hostility. That way, community members who post high-quality, thoughtful and expert content will be rewarded by seeing their comments highlighted and featured on the site. 

Analyze and filter incivility

If rewarding quality conversations is the carrot, then filtering out incivility is the stick. For the most efficient moderation results, a hybrid approach using category-leading AI and ML moderation (combined with a healthy dose of intuitive, manual moderation) can reliably filter out a large proportion of toxic language–and analyze users to understand who are most likely to post toxic comments in the future.

Today, publishers no longer have to make a Hobson’s choice between enabling comments (and seeing them degenerate into petty arguments) and turning them off completely. With positive reinforcement, editorial engagement and multi-layered moderation, overheated arguments can become meaningful discussions–bringing healthier online communities, and higher reader loyalty, to publishers.

About the author

Andrew Sullivan is the Chief Product Officer at OpenWeb.

Perspectives | Revenue | Supporter Spotlight

The bad ad problem: balancing short-term profits and long-term success

There are telltale signs that digital publishers haven’t embraced a user-first approach to monetization. Frequently, these unwelcome surprises come in the form of bad ads. There’s a subtle, yet crucial safety issue at play – that of the end user, and to publishers.  

Bad ads have become more tangible in recent years. They range from offensive and unpleasant imagery to off-brand messaging. Unfortunately, they have a raft of negative effects. These include user churn, widespread user complaints, and a serious dent in monetization.

In 2021, 76% of publishers reported ad quality challenges affected user experience.  Sixty-six percent of publishers reported that ad quality issues impacted their revenue, underscoring how vital it is to adopt a user-first approach. 

User experience expectations are changing, and working practices must keep up. Considering fundamental recent shifts in user sensitivity and expectations, we can’t expect outdated approaches to remain effective. 

The brand suitability question 

With 35% of publishers experiencing worsening ad quality challenges, the pressure is on for publishers to consistently deliver on-brand experiences. In the last 12 months, the definition of brand safety has evolved. These days, the focus is on the distinction between brand safety and brand suitability. It’s no longer enough for publishers to wonder, “Is this creative acceptable for a premium publisher?” The question now must be, “Is this acceptable for my audience, my message, and the content on this page?” That is the philosophy behind a user-first approach. 

Poor ad quality threatens the publisher-audience relationship. However, nearly half of all publishers say they lack the tools to control the ads that appear across their digital properties. Misleading links in ads are the primary type of low-quality ad publishers are seeing – 48% of publishers say they’ve seen such ads. Almost as many (44%) of publishers report witnessing fake news in ad content, 28% reporting links to sites with security threats (malvertising), 31% reporting violent content, and 27% reporting explicit or offensive content. 

Publishers are brands too 

To cultivate strong relationships with their audiences, publishers must deliver engaging, relevant advertising that works for their brand. And every ad counts towards retaining user loyalty, engagement, and ultimately, monetization.  

Publishers require custom controls to maintain their standards and values because there is no universal guide for what counts as a “good” or “bad” ad. In fact, publishers are demanding customization, with 47% reporting they need “more control and transparency” from their ad quality tools. 

Real-time protection against off-brand ads is essential to maintaining a positive user experience. Realtime ad quality protection enables publishers to avoid advertising that is inappropriate for their brand’s unique sensitivities and values but may be fully appropriate for another brand. Today, advertising must be aligned with a publisher’s brand based on its sentiment, tone, and messaging.

A dynamic need 

It is nearly impossible for a publisher to regain a user’s trust once the user has seen an ad that contradicts the publisher’s tone or looks suspicious, or especially if the user clicks through to a deceptive ad and lands on a scam website. In the world of brand suitability, it’s often “one strike and you’re out.” 

While an overall approach to brand suitability, trending topics, and news or event cycles is a must, continual diligence is needed. A user-first approach requires that publishers roll up their sleeves and assess suitability on the ground to ensure their audience’s experience remains on-brand. In short, brand suitability is not static. 

Publishers don’t have to start from scratch. Real-time ad quality tools that provide granularity exist to eliminate the heavy lifting. Setting content parameters and reviewing ads on a site is not merely a maintenance task for ad ops. It’s a vital component of a publisher’s business strategy. 

The way forward

Publishers have devoted time and resources to assure brand-safe environments for advertisers. Now, publishers must remember to devote the same attention to brand suitability for their own brand and users. Going forward, a user-first approach requires publishers to align page content and ad content, and consider them holistically. That control requires full visibility into all ad content on each page, as well as granular customization for their unique audiences. 

Boosting ad quality translates into revenue upside and enables a brand to stand out. When a user-first approach informs ad quality decisions, the benefits are felt by publishers and users alike.

Perspectives

DCN’s must reads: week of October 14, 2021

Here are some of the best media stories our team has read so far this week:

DCN’s must reads: week of October 7, 2021

Perspectives | Supporter Spotlight

Digital publishers must avoid being dazzled by vanity data

Professionals in all industries have become obsessed by data over the last decade. It is true that having a firm understanding of your data sets is key to growing a successful business. However, data for its own sake is never the answer.

The whole point of collecting data is to achieve something, such as optimizing subscription experiences to improve your conversion rate. Doing so leads to better value alignment, longer lasting customers and, ultimately, higher revenue.

But data that isn’t understood and actionable is a waste of an organization’s time. And the concept that data is gold dust has led many publishers to chase vanity metrics.

How to approach data

We advocate for a new outlook on the types of data that digital publishers have at their disposal. Working backwards from the outcome, rather than forwards from the granular metric, data can be prioritized into three buckets:

Performance data

The most important data is performance data. These are the metrics that tell you whether things are, generally speaking, getting better or worse. In turn, this is the data that you should call on when deciding to explore a new initiative.

If you don’t have performance data, then filling this gap should be an urgent business objective. Doing so allows you to report on the overall health of your business. For example, if your organization’s churn rate has gone up, you know you need to fix it. Similarly, if acquisition rates have tanked, you know the conversion journeys aren’t working. These insights are the very least you should be getting from your datasets.

Actionable data

The next metrics to turn your attention to are actionable insights. This data points you towards improvements you can act on immediately. These are high priority as they are the clearest and least risky levers you can pull to affect your performance stats.

For example, if no readers are reaching the end of a paywall meter, you know you’ve set the limit too high. The data is the average number of pages a visitor consumes against a meter; the action is to reduce the meter size.

Everything else

There is a plethora of datasets available. However, if the metrics don’t give you an overview of your performance, or provide you with an actionable route to improvement, they shouldn’t be prioritized.

You could call this bucket of data “vanity metrics,” or data that have diminishing returns. By this we mean data that might appear interesting in theory, but in practice needs so much contextual explanation that it becomes more time consuming than it is valuable.

Let me give you an example. Imagine a publisher that uses a metered paywall, allowing five free views per week. This publisher tracks their average number of free pages before subscribing, which is 30. What are the actions that the data points can trigger?

On its own, it’s just not enough data. The metric doesn’t distinguish between visitors who viewed all five free pages, six weeks in a row, from those who dabbled with the odd article here and there over the course of a year. To derive an action would require a lot more analysis, probably with data scientists. A different metric, average meter consumption, would be far quicker and cheaper to action. This data could immediately point to a misconfiguration in the meter.

How to approach data tools

There are a myriad of tools out there to enable news and media companies to collect, clean, manage and store their data.

Data solution red flags

There are two extreme ends of the same spectrum that digital publishers should avoid at all costs.

One of these is a black box. Solutions in this camp do not expose any data or allow you to export it to other systems. In other words, these tools may do the job, but exactly how they get to the output is unclear. Digital publishers need access to their data to take action on it. Ideally, the data is embedded at the point where decisions are made.

The other red flag is a company that offers a specific solution but is proposing to solve every pain point you have. We often see solutions that provide a rich dashboard that looks great. However, it may rarely be in practice because the data is either non-actionable or not holistic.

Does the perfect tool exist?

You would be hard stretched to find a holistic, actionable solution that covers all ground. In an ideal world you could build a data warehouse that combines business intelligence and actionable functionality, although this could be expensive.

In reality, best-of-breed solutions should expose performance data for their own domain. And – crucially – they should integrate actionable data into their UI at the point of action. The important thing is that this will guide users toward an informed decision.

Modern businesses need to experiment, iterate and A/B test in real time, without calling upon a team of engineers to implement changes. All readers that interact with your content should be tracked in a comprehensive and meaningful way, by a platform that then allows commercial decision makers to test and learn from different conversion strategies.

In short, a full-scale subscription experience platform should not only show you what your data looks like, but also how you can use it to improve the customer experience. Publishers that match deep industry knowledge with powerful technology solutions will take market share from those still relying on “one-size-fits-all” customer journeys.

Data provides the key to profitability, when done correctly

You need to have quick and effective reactions to underperforming aspects of your business. This means having holistic and actionable data locally situated to make changes effectively.

Those who approach the data conundrum with a creative, long-term mindset, and avoid being dazzled by vanity data and impractical tools have the best chance of success.

Perspectives | Revenue | Supporter Spotlight

Publishers can’t afford to ignore data leakage

The problem of data leakage is one often not well known or understood by publishers. Therefore, addressing data leakage is rarely prioritized. This particularly true if the pressure to monetize their inventory is high and resource is limited. But what does data leakage mean? And are there ways publishers can protect their data from leaking? It’s crucial that publishers learn more about this problem and about the solutions available that help prevent it.

Data leakage typically occurs when a brand, agency, or ad tech company collects data about a website’s audience and subsequently uses that data without the initial publisher’s permission. The core concern with data leakage is that it causes a publisher’s ad inventory to depreciate in value. If bad actors collect data about a publisher’s users, they can use this information to target these users elsewhere — potentially on cheaper inventory. In other words, programmatic spend is diverted from the original publisher. This results in a reduction in demand and, therefore, a lower yield.

Data leakage can happen transparently with the publisher’s knowledge or consent. For example, a company might request that a publisher install code on their page that allows data to be gathered about their users in exchange for something else such as a minimum spend commitment. In some cases, this might be considered a commercially worthwhile proposition providing the appropriate regulations are complied with.

More frequently, however, data leakage does not happen transparently. In the context of programmatic, this usually occurs when publishers choose to work with numerous technology partners in an effort to maximize revenue and yield. There frequently a correlation between the number of partners a publisher chooses to work with and the risk of data leakage.

How data leakage happens

There are a few ways data leakage can happen:

Open RTB bid requests

Data leakage can occur when Supply Side Platforms send bid requests to Demand Side Platforms via using the OpenRTB protocol. This contains a wealth of information about the user, the content they are consuming, the device they are using, their cookie id, where they are located to mention a few. (See the Site, App, User, Publisher, Content Objects). Much of this is information integral to the programmatic auction process. However, it could be used to profile users and target them elsewhere. How much this actually happens is unclear. It may even occur unintentionally by machine learning, bidding algorithms.

Cookie syncing or tracking pixels

Data leakage can also happen when a third party gets access to a publisher’s page either via cookie syncing or a tracking pixel. A pixel is an invisible piece of code that marketers or ad tech platforms use to track users, apply campaign strategies such as frequency capping and monitor performance. Pixels can also collect information about a publisher’s audience. Unfortunately, that can be used to enable the targeting of those users elsewhere.

Today, the vast majority of players in the programmatic digital supply chain are reliant on third-party cookies for user identification and for campaign targeting, optimization, measurement, and attribution. Cookie synchronization is a process that is required to communicate user identity between platforms.

The problem of data leakage arises when platforms that publishers work with give other platforms that have no direct relationship with the publisher access to the page to cookie their users. That platform is then able to build user profiles, which allows them to reach that audience elsewhere without having to buy any media on the original publisher.

How to ensure your data is protected

One way to prevent data leakage is for advertisers, agencies, ad tech companies and publishers to have legal contracts that stipulate who owns what data and how other parties can use it. You might be protected contractually. But how do you monitor and enforce these contractual obligations in practice?

Publishers can also leverage tools that track which platforms are dropping unnecessary pixels or bringing unwanted data collectors. These tools can be used to undertake periodic audits to identify where data leakage is happening. Alongside, publishers should implement policies and practices to qualify, monitor and deal with bad actors.

How to balance the risk and rewards

It is important that publishers find the balance between a closed, safe environment and a risky but sustainable monetization strategy.

With the impending “cookie apocalypse,” publishers are already opting to work with identity providers that are not reliant on third-party cookies to ensure they maintain a healthy programmatic revenue stream and protect themselves from data leakage. Next-generation identity solutions provide a foundation for user identification, which is fundamental to campaign targeting, optimization, measurement and attribution. They also offer new safer mechanisms and tools that limit the amount of data leakage.

When choosing a provider, check that they have built mechanisms that will only assign your users an identifier if they have consent to do so and only share those identifiers with the platforms you have authorized. Finding the right identity provider today can help you prevent data leakage, respect consumer preferences and local privacy regulations while facilitating sustainable monetization.

blue and red led light motion blur
Perspectives | Supporter Spotlight

Preparing measurement for the post-cookie data divide

The post-cookie world is facing a measurement problem. There is plenty of talk surrounding FLoCs, Unified IDs, first-party data, contextual advertising and more. However, there is not enough conversation about how the worthiness of these solutions will be understood by buyers and sellers. 

There will likely be no silver bullet replacement for third-party cookies for some time, so teams need the ability to analyze the effectiveness of new technology and data sets. This is particularly true for publishers, who will suddenly be attempting to meet new advertiser KPIs based on a much broader range of data types and technologies.

More data, more discrepancies

Publishers have typically been in a reactive position relative to advertiser expectations. But what happens when those expectations evolve due to the industry-wide push to replicate the performance of behavioral targeting through various post-cookie solutions? Complexity will increase, and with it, there is the potential for increased friction. This will inevitably impact publisher revenues.

Discrepancy management was historically limited to the differences in first-party and third-party campaign pacing. But as new data is used and advertiser KPIs change to incorporate different technologies for the same campaigns, discrepancies will become more of a three-dimensional problem. 

Cookie-based targeting is an example of where this could get more complicated. Third-party cookies made it very simple for a sports brand to serve ads to an audience of soccer fans in the 18-36 age range. Without access to third-party cookies, advertisers will want a way to analyze the audience data that determined the age group and interests, or the context of the page, or a number of other potential factors in order to understand whether the ad was served to the right audience. This makes campaign analysis and compensation inevitably more complicated. 

Another example can be found in the case of contextual segmentation and semantic differences in classification. An alcoholic drink recipe that one advertiser may consider as “cooking” may also be classified as “alcohol ” with a different advertiser. Since publishers work with many partners, they need the ability to recognize and normalize these nuanced differences that can have a large impact on campaign discrepancies. In short, the new world we’re entering is even more fragmented, and existing publisher workflows must adapt. 

The need for measurement alignment

In a soon-to-be-released survey conducted by DoubleVerify, 47% of publishers cited measurement standards as one of the biggest challenges with relying on first-party and contextual data. The same will likely be true for advertisers, as more complex data sets will be closely tied to KPIs. This highlights the need for neutral measurement that improves collaboration and reduces friction between buyers and sellers.

Even within individual solutions such as FLoCs or Unified IDs, there have been delays and setbacks that highlight the complexity of these issues. The industry will need different types of data to fill the gap left by third-party cookies. Ensuring this data is trusted, verifiable and actionable will be a key challenge for the industry.

Ensuring post-cookie success with holistic data strategies

The looming industry changes will make it more important for publishers to address instances of data silos and manual reporting that slow down decision making and reduce transparency. This can be made possible with a holistic data strategy and tech stack that can manage the rising complexity. Publishers focusing on aggregating their data and optimizing workflows can better position themselves to be proactive and take control of how targeting and measurement impacts their business. 

In this age of experimentation where new variables lead to more complicated deals, it’s even more important for publishers to invest in tools that will facilitate the ingestion of a variety of both first- and third-party metrics holistically. Successful campaigns must account for making first-party audience data actionable for advertisers while considering key media quality metrics and any third-party data that buyers rely on. Many industry stakeholders expect first-party data to be key, but this is only the case if the data is able to be used to effectively replace third-party targeting.

What you need for a holistic data strategy

Holistic data strategies will help manage complexity in discrepancy management and ad targeting, but what does this look like in practice? To help publishers get into a holistic mindset when it comes to data and workflows, they should ask themselves the following questions:

  • Which data sources does your organization rely on now? How is it collected and aggregated?
  • Which data is valued by your top advertising partners? How will this change in the future due to cookie deprecation?
  • Does the organization have a system to connect these resources in a meaningful way?
  • What teams stand to benefit from data that they don’t collect themselves?

Once publishers decide to move forward with a holistic approach, they must determine whether they will build a technology solution in-house or purchase one that can adapt as the industry evolves. One key point to consider moving forward is the potential for automated, algorithmic optimization based on the intersection of these data sets. For publishers, it’s important to think about the long-term implications of this choice, as workflows and tech stacks are often difficult to transition out of once they are established.

No one can fully predict what’s coming next for post-cookie targeting and how those results will trickle down to publishers. What publishers can prepare for is the fact that complexity will only increase from here. With that in mind, it’s vital for media companies to prepare by evaluating their tech stack and data foundation in order to aggregate and analyze more complex data sets.

Perspectives

DCN’s must reads: week of October 7, 2021

Here are some of the best media stories our team has read so far this week:

DCN’s must reads: week of September 30, 2021

Marketing | Perspectives | Supporter Spotlight

What CTV marketers can learn from TV’s past mistakes

People working in CTV advertising often toss around phrases like “the living room of the future” and “the connected consumer.” TV technology today is pretty darn impressive and its easy to be optimistic. With content like choose-your-own adventure programming and sophisticated hardware, today’s TV tech puts the “home theaters” of even a decade ago to shame.

However, there’s also a central dilemma: The tension between wanting to innovate and wanting to play it safe in order to avoid annoying or alienating consumers. How high-tech is too high-tech for certain audiences? There are a number of emerging technologies designed to enhance the viewing experience that advertisers could leverage. However, just because they can doesn’t mean they should.

For brands, designing a campaign for unproven territory can mean designing a campaign that doesn’t work because it fails to resonate with consumers. On the other hand, if you pass up the chance to be first-to-market, someone else will get there instead. The trick is to find the just-right spot in between.

Luckily, there are some lessons to be found in some of the past few decades of innovation in the living room. As with ad overload, history can teach us a few things about marketing on CTV.

Watch for consumer adoption

First, track consumer adoption. Just because a technology exists doesn’t mean that consumers are using it. That might be because it’s too expensive, too difficult to use, or just not useful. Consumer uptake is what really matters, especially with an emerging medium. And the reality is that plenty of TV technologies promoted by mainstream consumer electronics retailers encounter lukewarm reception from buyers.

Remember curved TVs, which were hyped up back in 2013? It turns out that you can’t replicate an IMAX experience in your living room, no matter how high your ceilings are. Meanwhile, take a look at voice control, something that may have seemed like a science fiction technology not long ago. You can thank the marketing behind Amazon’s Alexa and Apple’s Siri for convincing consumers that voice control is both useful and user-friendly. As a result, we’ve found that voice-controlled ads really do engage users.

Consumers crave convenience

Second, never forget that consumers crave convenience. Integrating new tech into your advertising often isn’t worth it if it makes the brand experience more complicated for the consumer. This is particularly important when translating digital campaigns from desktop and mobile to the lean-back CTV environment.

There’s perhaps no better cautionary tale here than 3D TV. Watching some entertainment in 3D – sports, for example – seemed thrilling at first. But needing to wear specialized glasses for the experience, in addition to the added cost of 3D TVs, posed a barrier to entry that consumers weren’t willing to surmount. Then ESPN backtracked on a plan to put live sports into 3D, which eliminated the one incentive many consumers had to adopt the new tech – a more immersive sports experience.

There’s an exception to this, though. You can offset added complexity with a value exchange. If you’re going to make an ad experience more complicated, be upfront with what consumers will get in return. That might be fewer commercials for the rest of the episode they’re watching. It might be discount that they can capture with their mobile phones straight off their TV screen (or both).

Prepare to adapt to change

And finally, be ready to adapt to change. Things change fast – hardware, software and consumer habits. Five-year plans for a new medium may need to be altered in a matter of weeks.

In addition, keep an eye on market signals even if you consider them to be externalities. Some media executives and technologists were singularly focused in the mid-2000s on the HD-DVD vs. Blu-ray race to supplant the standard DVD. However, that might have distracted them from the fact that before either could “win,” streaming media became the choice of consumers worldwide. Millions of dollars were invested in technologies that were obsolete before they even hit the market.

“We’ve screwed up in the past but we won’t do it again” is a common mindset that’s been in the ad industry for decades. Typically – spoiler alert – we do screw up again. But even as we look to the future, having an eye on the past can never hurt to help avoid a few missteps.

Perspectives | Revenue | Supporter Spotlight

OTT monetization needs to adapt fast or die slow

Streaming TV may have killed cable － but where do we go from here? After the pandemic-induced streaming boom, consumers are cancelling subscriptions at record rates. As viewers grapple with rising prices and an explosion of subscription services, OTT players should embrace the potential of ad-supported streaming in order to survive an increasingly competitive market.

OTT on the up

The OTT (over-the-top delivery of TV and film via the internet) industry is booming. In 2017, approximately a third of U.S. adults cited streaming services as their main means of consuming television. Double that for people aged 18-29. During the pandemic, streaming television has continued to display incredible growth. In 2020, screen time overall was up almost a third on the previous year. Viewers watched streaming services, such as Netflix, Amazon Prime Video, and Disney+, for one hour and 11 minutes per day. Also, 12 million people joined a service they had never used previously. Three million of those viewers had never previously subscribed to any TV streaming service at all.

A changing paradigm

The mass adoption of streamed OTT services coincides with a fundamental change in the television business model. While television has traditionally been funded largely by advertising, most streaming TV platforms have instead opted for a subscription-only model. For traditional TV providers transitioning to streaming, this choice is understandable, given the abundance of legacy technologies that cannot easily be switched towards an advertising-based SVoD. New players like Netflix, by contrast, have made a strategic decision not to offer an ad-supported subscription.

OTT overload

The subscription model appears to be working well enough for Netflix, the undisputed market leader. The problem lies in the explosion of alternative streaming platforms. In 2020, the average viewer was subscribed to nearly eight streaming services, compared to six in 2019.

Netflix raised the prices of their memberships in 2020 and may well do so again. The result is that the monthly cost for consumers of streaming tv is increasing, as both the prices and number of services go up. There is an inevitable tipping point where paying multiple subscriptions becomes too expensive for the viewer and they will choose to let some go. Many have already crossed that threshold: 36% of Americans plan to cancel streaming subscription services in the next 12 months. And the most common reason – by far – is the price of service.

Ad-supported gains ground

Although subscription dominates, ad-supported streaming services have seen substantial growth during the pandemic. Research by Deloitte found price to be a key factor in consumer streaming decisions. Most consumers (65%) want cheaper ad-supported streaming options (up from 62% pre-Covid). And, of those who did, more than 50% preferred ad-only streaming. Sixty three percent of respondents in a PwC survey said they would be willing to sit through more ads if it meant cheaper subscriptions. Providers offering ad-supported streaming now include The Roku Channel, IMDb TV, Discovery plus, CBS, and Hulu, to name a few.

Sell smarter ads

Part of the appeal of the subscription-only model lies in its apparent simplicity. For established television providers, transitioning their advertising model from cable to digital presents many technical challenges.  For those providers who have embraced ad-supported, a combination of white-glove and programmatic ad sales are the norm.

However, a new approach is also gaining popularity: self-serve advertising platforms. Inspired by the walled gardens of Facebook and Google, self-serve ad platforms allow OTT providers to sell their ad inventory through a branded, automated marketplace. This allows them to tap into the massive SME ad spend that currently drives digital ad growth. SMEs increasingly favour self-serve solutions, and for OTT brands with their own platforms, less value is lost in the infamously murky “black box” programmatic supply chain.

Roku, for instance, sells home screen banner ads, Roku screensaver ads, and video ads via their self-serve platform Roku Ad Manager. Ad Manager is designed to be a smarter, simpler, and more cost-effective way of managing channel promotional campaigns within the Roku ecosystem. It is just one of an increasing number of self-serve platforms popping up among OTT brands.

The other important aspect of ad-supported streaming is that it’s not simply a return to the dark days of regular, irritating ad breaks (as still found on linear TV). OTT providers that adopt ad-supported models are innovating the user ad experience to make it more effective and less obnoxious. Hulu, for instance, runs pause ads. This non-disruptive, non-intrusive user-initiated ad experience appears only when viewer presses pause when watching content. That’s a far cry from the ad breaks of old, and an indicator that ad format innovation is an essential part of the new streaming experience.

Ad-supported is inevitable

As OTT prices and the number of platforms continue to rise, consumers are increasingly looking for flexible, low-cost alternatives to meet their streaming needs. For OTT providers, offering only subscription models means that they price themselves out of the market for cost-conscious cord cutters.

We are not likely to return to the days of constant ad breaks and linear TV. Rather, the future lies in the flexible middle ground where consumers can pick and choose from a selection of price models: subscription, ad-supported, or a hybrid of both. OTT providers need to embrace ad-supported streaming － the sooner, the better.

About the author

Johan Liljelund is the Executive Vice President at DanAds based in Sweden. Johan is an entrepreneur with more than 20 years of experience in developing technology towards the media industry and a pioneer in the digital advertising industry enabling publishers to streamline and efficient their internal processes on a global market.

Perspectives | Revenue | Supporter Spotlight

Two ways publishers can increase digital ad revenue from news content

The media is covering news from more angles, and at more depth, than ever before. The Tokyo games generated a flurry of content that spanned fashion, mental health, gender equality, politics, and more. (And let’s not forget the athletes and actual events!)

The summer games reflect how big news events typically branch out across industries, lifestyle categories, etc. Sometimes, the link between what would be considered a critical piece of news and everything else is tenuous.

Unfortunately, in the pursuit of absolute safety and stringent brand preservation, many advertisers err on the side of caution. They employ rigid brand safety practices that lead to overblocking, which diminishes the yield publishers need to bring the important conversations to the fore. As a result, many advertisers sit on the sidelines as journalists explore the various facets of evolving news. Unfortunately, that even includes topics that could be on-brand for many advertisers.

News content holds digital advertising’s future

The advertising industry’s pullback associated with Covid-19 coverage early last year illustrates the negative impact this can have on publishers, advertising brands, and the overall consumer experience. In early 2020, traffic to major U.S. news sites jumped more than 50% compared to the same period the previous year. However, that increase in visitor time and attention did not provide a corresponding revenue increase because many advertisers were steering clear of any content referencing the virus.

The root of the problem lies in the “blocklist.” This simplistic brand safety tactic prohibits ads from being served based on keywords appearing in URLs or nearby content. According to news reports, “coronavirus” was the number-one term on industry blocklists. In fact, more than three thousand advertisers have blocked ads from appearing near it.

Despite these challenges, there is ample opportunity for publishers to move the conversation past purely transactional ad sales and take more active control of their content strategy. By offering curated inventory packages that are both contextually relevant and brand suitable, publishers are able to address advertisers’ brand safety concerns. They can provide also advertisers with greater control over the audiences they are reaching and the content they are aligned with.

Adapting advertising to the news ecosystem

Overly restrictive blocklists impact publishers and advertisers, yet the news will always have complexities and nuances. However, according to GroupM, “There are simple ways to advertise in news without compromising brand safety. But to avoid hard news, or even bad news, flies in the face of the facts.”

Adapting to fast-paced news cycles requires you do the following:

1. Gain insights and control

Evolve from the brand safety of yesterday. Focus instead on understanding the context of the content surrounding brand messaging. Contextual Intelligence tools help advertisers and publishers understand and evaluate billions of webpages and other digital content. This allows them to evaluate supply and identify brand-suitable environments for advertising based on overall page context, not a single word or meta data.

For example, many advertisers might decide they are comfortable with ad placements around current content related to topics like personal hygiene, cleaning, telework, streaming entertainment, food delivery, education, cooking, books, games, or exercise. While each marketer needs to determine its own standards for brand suitability, this type of related content may be appropriate.

In an interview, Edwin Wong, SVP of Insights & Innovation at Vox Media, noted that: “When quality content is matched with people’s passions and interests, it creates a much richer picture of who the audience is, why they are there and what motivates them. When we do this right, we no longer base contextual targeting on just the individual, an individual action, or an individual piece of content, but on what our platforms deliver for the audience holistically. It changes the retroactive perspective of targeting and makes context targeting future-facing.”

2. Provide meaningful ad measurement

Establish baseline metrics

Two primary benefits emerge from consistent monitoring and accounting for viewability, invalid traffic, and brand-safety reporting across your campaigns. First (and very importantly), you protect your advertisers’ brand dollars. Second, effective brand safety will be dynamic. Brand suitability takes page context and intent into account to address continuous content evolution.

Life beyond verification

Connect your campaign to data sets that reveal meaningful impact so that attention becomes an outcome to pursue in tandem with traditional KPIs such as viewability and verification. More broadly, marketing campaigns need an industry ready for new metrics to gauge cross-channel impact beyond just verification.

Measure across channels 

Publishers and platforms will look to brands to maintain consumer loyalty and trust in their expertise. This calls for both robust content and multichannel dissemination.

Evolve KPIs to gauge true engagement and impact

Innovative marketers who experiment with formats beyond traditional social media posts and editorial-style content learn more because verification alone won’t tell you about impact post-view. As marketers seek further control over their ad spend and a better understanding of campaign efficacy, measuring advertising outcomes like consumer attention will become crucial.

When you move measurement beyond ad verification to attention, you’ll show advertisers how your inventory helps them drive success and hit their KPIs. That’s a surefire way to keep them coming back for more.

Drive more revenue through agility

Changes to ad targeting, data collection, and privacy regulations will continue to challenge the digital advertising ecosystem to evolve and bring new solutions to market that support its future. The ability to stay agile and adapt to the changing industry will be critical for publishers while increased collaboration across the ecosystem will provide not only innovation, but an increased customer experience and the need every stakeholder to rise to the occasion.

Perspectives

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