Lately, there has been much investor handwringing over CTV investments. With Netflix’s latest results, some worry that if Netflix’s growth has stalled, the prospects for everyone else may be diminished as well. This is why the same day that Netflix stock came down 35+%, there were also (albeit much smaller) declines in other broadcast stocks too.
But the concerns may be misplaced. If YouTube can build a $28.8B annual revenue advertising business, without subscriptions, surely there’s hope that Netflix and other media brands with strong content catalogs can build and sustain ad-supported offerings.
The YouTube business
To better understand the YouTube business, MediaRadar took a look at the mix of YouTube’s current advertising. For this analysis we reviewed pre-roll, mid-roll and post-roll ads from the largest 3,000 YouTube channels across 33 content categories through a panel of over 2 million users.
What we found was a robust, growing business, with significant lift in advertising revenue the trailing year, but also the number of advertisers, across most product categories, was up. Alphabet Inc, which owns YouTube, recently released FY 2021 numbers. The economics look strong. The company grew revenue 47% in 2021, up to $28.8B. Almost all of this was from ad revenue, with very little from subscriptions. The implications for all broadcasters and publishers is meaningful.
Some view YouTube as a platform only, not as content creator. But this is not quite right. YouTube is a platform of course. But they also invest aggressively in their influencers and third-party content creators. While they don’t finance scripted shows, they don’t leave content creation to chance. They do this by providing physical space, the latest tech, upfront grants, and even assign a manager to advise creators once they hit a certain number of followers. As reported by the WSJ in October 2021 they note YouTube employs 1,000 full-time managers assigned to the top 12,000 creators. With this in mind, there are takeaways for others on how to build a hybrid approach to content creation.
YouTube advertising findings
The industry verticals with the most concentration of ad spend include entertainment, technology, retail, finance, and pharma. Altogether, these categories accounted for 60% of ad placement, and each segment increased > 30% YoY from 2020 to 2021.
Retail and ecommerce advertising are up significantly year-over-year. We observed an increase in ad spend within this category of 109% from 2020. Unlike in certain categories, in retail we continued to see steady growth throughout the year. The Retail Category increased advertising on YouTube by 60% in Q3 2021 and 91% during the Q4 2021 holiday rush.
YouTube’s music content was the most popular in both 2020 and 2021 with advertisers. YouTube benefits from strong renewal rates, but also from new clients. 52% of advertisers in music YouTube channels were new in 2021.
Everyone knows Travel advertising would be up. YouTube did not disappoint. Advertising investment in the Travel vertical grew by 270% YoY from 2020. Some of the ad spend was from kid-friendly vacation destinations and theme parks like Disney World and Discovery Cove. Ad spend increased 8x year-over-year.
Content is key to advertising growth
Next, we looked into YouTube’s programming channels to see what content categories are helping to drive growth of the platform. Interestingly, the most popular among advertisers were the same in 2020 as 2021 – music, kids, society and culture, and gaming.
YouTube’s music content was the most popular both years among advertisers. Furthermore, 52% of the companies investing among YouTube’s music content were newcomers to the category.
Another trend we uncovered was within “kids” content. Advertising investment among travel vertical grew by 270% YoY from 2020. Most of the ad spend was from kid friendly vacation destinations and theme parks like Disney World and Discovery Cove. Ad spend increased 8x among this group.
What’s next?
As we move through 2022 and into 2023, we expect retail ad spend to continue growing on YouTube. YouTube will continue to be a hot-spot for advertising among retail brands.
While ecommerce has had an increasing presence for years, the pandemic likely accelerated this possess by uncovering new technology to help making digital buying easy. YouTube has had success with shoppable experiences, and we expect to see more of them.
Publishers have long understood the value of affiliate revenue and shoppable content. The opportunity here – as demonstrated through YouTube’s success – is to evolve this into video and CTV offerings as well.
It will be interesting to see how the “new normal” plays out post-pandemic. Obviously, the industry and buying behavior has been forever changed. The online video market is also becoming cluttered with numerous CTV and OTT options. Even Disney+ and Netflix are launching advertising-based models. The constantly evolving market will impact the way video is consumed and the methods advertisers need to use to promote their products.
The combination of content and commerce is a strong one. And, as we are seeing throughout the streaming space, content drives audience interest. And audience interest drives ad sales success. YouTube’s success illustrates the opportunity for ad-supported streaming success.
True digital natives, Gen Z grew up with smartphones, social media, and video on demand. “Understanding Gen Z’s media experiences and entertainment preferences is a priority for publishers,” Michelle Manafy, DCN’s Editorial Director, observed, “ because they provide a proxy for the future of digital media.”
Not to be confused with millennials, Gen Z’s outlook and media habits are very much their own. A powerful demographic — and audience — in its own right, Insider Intelligence noted Gen Z is expected to constitute more than one in five (20.2%) of the U.S. population in 2022. With nearly 70 million tweens, teens, and young adults falling into this category, “Gen Z is the most racially, ethnically, and sexually diverse generation in history.”
So, what do we know about this demographic, and how can publishers best reach and engage with them?
1. Understand their social media habits
Given that this group was “born digital” it is no surprise they are active users of social media. One key segment of this demographic, teens, spends around four hours a day on social media new research from Piper Sandler shows. This latest semi-annual Taking Stock With Teens survey also revealed TikTok is teens’ favorite social media platform (33%) surpassing Snapchat for the first time (31%). Instagram ranks third (22%). YPulse’s social media monitor reports that, although Gen Z’s use of platforms such as Facebook, Instagram, and Snapchat increased slightly last year, “no platform has seen growth comparable to TikTok’s in 2021.”
Gaming platforms and emerging social spaces also present some intriguing possibilities. For example, YPulse found Gen Z is more than twice as likely as Millennials to use platforms such as Discord (34% vs. 15%) and Fornite (25% vs. 10%). They are also less inclined to use products like Facebook (42% vs. 75%) and Facebook Messenger (42% vs. 62%) although that may change as they get older.
With roots in gaming culture, but not exclusive to gamers, Wilson argued, “digital campfires have become a force defining not only how Gen Z audiences connect, but also how they experience and shape the culture at large.”
“For that reason, marketers can no longer afford to ignore them,” she said. The same argument can be made for publishers and other content creators too. Twitter Spaces, live streams, and AMAs are just the mainstream tip of this intimacy iceberg. Other platforms like Roblox, Geneva, and Discord should also be on your Gen Z radar.
That means “you must earn their trust, as they need to believe in your product as well as your purpose,” according to Erik Huberman, the Founder & CEO of Hawke Media, a full-service, award-winning marketing consultancy headquartered in L.A.
For media players, that may mean everything from providing more behind the scenes stories on Instagram Stories, as well as having a more defined voice on issues that matter to Gen Z. Those subjects include climate change, social justice and the wider uncertainties faced by this generation; uncertainties impacting Gen Z’s economic prospects and their mental health.
Having a voice on such matters may challenge traditional journalistic concepts of neutrality and objectivity, but can be clearly seen in outlets such as VICE, Complex, and The Recount. These are publishers I find many of my Gen Z students naturally gravitate towards because of this.
4. Lean into theircontent preferences
Video, mobility, and short-form content all matter to this cohort. DCN’s research established the primacy of video. Gen Z values video over other media platforms by a margin of around 2-to-1.
More than half of their daily video viewing is on Netflix and YouTube (both 30%) Piper Sandler showed.The research also found 87% of teens own an iPhone; with 87% expecting an iPhone will be their next phone too.
“Gen Z typically have an attention span of just 8 seconds,” the IAB reported, “a few seconds shorter than millennials, who come in at approximately 12 seconds.” From Under The Desk News on TikTok, to Axios’ penchant for bullet points (a format they’ve trademarked as Smart Brevity®) and the emergence of audio “microcasts,” no medium is immune to this short-form trend. Given that it’s not just Gen Z with infinite sources of distraction and entertainment available to them in the palm of their hand, short-form’s prevalence is only likely to grow.
5. Find fresh ways to make it pay
“The number of those [Gen Z] investing in cryptocurrency in the US increased by a whopping 200% since Q2 2020,” GWI highlighted last month. This presents intriguing possibilities for outlets seeking new content verticals, as well as new ways to secure reader revenue.
As I demonstrated in a list of 231 Ways To Make Media Pay, publishers such as the Chicago Sun-Times, Time, and The Marginalian (formerly Brain Pickings) have already been experimenting with cryptocurrency payments. More widely, Gen Z’s propensity to consume media on platforms like Netflix, Hulu, and Spotify may mean they’re more in the habit of paying for premium content.
Examples of tipping on social media, via The Information
In a similar vein, the tipping culture manifest in parts of the creator economy also offers some fascinating possibilities. Publishers may want to tap into Gen Z’s relationship with influencers and above-average propensity to use platforms like Discord and Twitch where this type of functionality is baked in.
Lastly, as more and more publishers seek to add e-commerce into their revenue mix, the emergence of social commerce — and Gen Z’s growing habit of not only drawing inspiration from social networks but then purchasing products and services directly through them — is another area publishers must pay heed to.
Implications for publishers
For content creators chasing after Gen Z consumers, the data suggests it is important to be active on newer, more visual, video-led social networks like Instagram and TikTok. At the same time, YouTube remains the most popular social media channel used by Gen Z and the rest of us, a traditional platform many publishers do not make the most of.
And it’s not just social video attracting Gen Z. Spotify’s data shows that Gen Z (and millennials) actively use audio to access diverse viewpoints and to find out about social issues, potentially creating a space to dig deeper and offer more long-form content.
Embracing these platforms, certain characteristics of the gaming ecosystem, as well as the style and tone of voice Gen Z expects from much of the media they consume, is essential if publishers are to develop long-term relationships with Gen Z. Given their size and purchasing power, Gen Z is a group no publisher can afford to ignore.
The need to evolve in the digital advertising world isn’t anything new. But the end of cookies has driven much speculation and we’re here to debunk some of the uncertainty that comes with it. Given the amount of discussion on the subject of cookies and identity solutions that’s taken place, it’s not surprising that certain common misconceptions have arisen. Let’s clarify what you need to know about identity and address the question of a critical factor in digital advertising: addressability.
“I can wait until the last minute.”
As tempting as it may sound to see what happens when everything is said and done, that approach isn’t in anybody’s best interest. As we’ve discussed before in “Why preparation is key,” solving for identity won’t be a quick fix or happen at the push of a button. Re-strategizing your approach to programmatic advertising requires a series of tests, trials, and adjustments to get it right. This process takes both time and effort. The sooner publishers lock in new solutions and curate new partnerships, the sooner the buy-side can adapt. These steps will enable us to enter 2023 as a unified industry with a tried-and-true approach for success.
“I can only choose one identity provider.”
It’s not uncommon to have one provider for varying solutions. While you may only need one CMP for consent or one DMP for audience segmentation, the same doesn’t necessarily apply to identity. As you evaluate who to leverage for direct deals or contextual targeting, consider as many identity providers as you see fit.
Many publishers scout out a handful before narrowing it down to three to five during the research and development phase. From here, you should test to see which best suits your needs. While you become more familiar with your first-party data, adding additional partnerships enable extra coverage and support. It also allows you to finesse your approach and keep what serves you in your new advertising strategies.
“Identity is an additional stream of revenue.”
When discussing addressability, revenue often arises during conversation. Why wouldn’t it mean more revenue if you’re adding another partner to help you identify and target your users? Additional revenue may be a happy byproduct. However, it’s important to set the right expectations in terms of objectives and results.
Identity should serve as a privacy-first solution to identify and address users that would otherwise be unreachable once third-party cookies are gone. Thus, acting as an alternative means to continue to do what has taken place for years past. A different connection equals a new and improved bidding logic rather than an extra stream. When publishers can address an otherwise blind user, they will see increases to bid rates and bid CPMs in otherwise blind environments.
“I can’t leverage identity since I don’t have emails.”
A theme around email addresses has emerged. Unfortunately, this theme is taking precedence over the real issues here. Yes, having emails is the strongest connection for buyer preference. However, there’s more than one way to address a user that isn’t tied to email alone. Direct deals and contextual targeting can take you part of the way. Identity aids as another layer to help bridge any remaining gaps.
You can start with identity, end with identity, or choose identity alone and regardless – it will take you just as far. The good news for publishers and advertisers alike is that identity allows you to target your end-user and target them 100% of the time. Thus, allowing for both addressability and scale. Some partners may only support hashed emails, whereas others can support declared and inferred signals. This is the common currency that will take you all the way and then some. It is crucial to understand what you’re working with and who or what you need.
“I’ll let the identity provider do all the work for me.”
Third-party cookies allowed publishers to put their advertising needs in the hands of others. Thus, letting them focus on other efforts in parallel. The role of conjuring up a game plan is now in the hands of the publisher. SSPs will still play a role and will continue to be there in support. Yet, it’s now up to the publisher to understand their data and make the best use of it for their own return or gain.
Adopting an identity partner alone isn’t a solution. Identifiers should empower publishers to protect their data and protect their users while using said data to convert into currency. Identifiers enable publishers to have the means to address their users in a safe and controlled environment. However, what they do with those IDs is in their court. Use the time to gain a better understanding of your first-party data and ensure the rest of the ecosystem is equipping itself with support.
At the end of the day, we all have the same goal which is why working together is the best approach. Publishers can make the most of their advertising strategies by confronting these common misconceptions in the name of addressability. With the right finesse, breaking down these barriers ultimately paves way for a future that educates, enables, and empowers media owners to address more users at full scale. As well as allowing them to maximize their value of inventory with a new form of currency. The coming changes allow for new and exciting opportunities, should they be properly seized, and should proper expectations be set.
Just a few weeks ago, Think Premium Digital in Australia launched part three of their research into the effectiveness and competitiveness of premium digital video. As the ex-CMO and ex-CEO of GroupM, I love to see the investment in quality research to help lift the performance of marketing and challenging out of date thinking.
This latest report, called “Not all time spent is equal,” looks at time spent on a platform vs. the advertising attention on that platform. The research shows that time spent on a media platform is not the same as time spent consuming advertising. Publisher premium digital video performed the best in terms of ad exposure and ad attention – beating out YouTube and social platforms.
The research also found that just because consumers are spending hours and hours on a media platform doesn’t automatically qualify it as a great place to advertise to them. The study highlights that ad attention (the time that eyes were on the ad), rather than time spent, should play a more important role in media channel selection. Time spent on a platform is not a suitable proxy for advertising effectiveness and should challenge agency planners to think differently about digital planning.
The new way to choose marketing channels
The obvious question becomes, if time spent is no longer the driving forced behind where advertisers should spend their money, what factors should they take into consideration. Here are three important factors to understand before making a channel choice:
Time spent on platform – Total time spent converts to 10.2% ad exposure for premium video compared to 4.5% for YouTube and0.7% for Social Video.
Ad exposure opportunity – Ad exposure for premium video is 2.2X more than YouTube and 16X more than Facebookin an average hour.
Ad attention is what drives engagement and behavior change – An hour on premium video generates 5 mins of ad attention; 2.6X more than YouTube and 25X more than social video.
Notice time spent is still a consideration – but only part of the equation.
Why attention matters
“Attention” is getting a lot of attention in marketing, advertising and agency discussions – as it should. The pressure on marketing dollars to truly deliver impact and business results has never been higher and selecting the right channel and environment is critical. This is an area where multiple research studies have shown that premium digital video on premium publisher’s sites deliver best in class results.
If the publishing industry ever wanted insights and results to help drive transformation of their video offerings to be a perfect match for advertiser needs, these are those insights. Building premium digital inventory should be every publisher’s priority. Premium video refers to short- and long-form video housed in the digital environments of known and trusted media brands that are brand-safe and offer meaningful scale.
Dr. Duane Varan, CEO of MediaScience, said about this latest piece of research, “Here, we’re looking specifically at these video ads appearing and trying to understand those differences. Similar research needs to be done across 100 other variables. But attention is a good starting point, because if you don’t have attention, you don’t have anything else. Attention is the start of the conversation.”
Dr. Varan added, “As we’ve consistently demonstrated, environments matter. The case for premium video continues to strengthen with this research showing its ability to deliver ad exposure and even more importantly, advertising attention.”
Rethinking your media strategy
Venessa Hunt, General Manager of Think Premium Digital in Australia, wasn’t surprised by the findings given consumption behavior. Where the disconnect comes from is that people aren’t looking at the full picture in the planning processes, she said.
“It’s often frustrated me when we talk about time on reach and exposure to advertising, because they are such different things. If a client is paying for time on a platform, or the ability for time on the platform, it doesn’t potentially benefit the brand. But if the ad isn’t even there, you’re using the wrong data to start that planning process.”
Hunt expected this kind of exposure and attention would become a factor in industry decision making, though she admitted the industry isn’t there yet. Measuring attention is problematic and variable.
“For now, though, we have to start changing the conversation around the planning,” Hunt said. “Why are we spending so much on this platform over another? We’re using time spent as the justification, and the fact everyone is there and there a lot. Sure they are, but there are no ads. Changing the mindset around planning ad exposure and ad attention as opposed to platform exposure and attention is key.”
Digital advertising needs to be rebuilt and reinvigorated. Consumers want better privacy protection, engaging content, and an overall foundation built on trust and transparency to ensure loyalty. To achieve this, data management platforms (DMPs) and supply-side platforms (SSPs) are joining forces.
As we enter the privacy-centric era of digital advertising, third-party cookies will be replaced by first-party data, which is even more powerful and effective because the signals originate directly from a publisher’s page, works on every browser, and doesn’t require third-party syncs.
In the privacy-centric era, first-party data will be the new currency for digital advertising.
Overcoming the third-party data challenge
The deprecation of third-party cookies and the need for better audience consent for cross-domain and cross-app targeting demands that publishers and advertisers put privacy at the center of everything. Publishers, like consumers, want control of their data.
By replacing third-party cookies with first-party data solutions, the combination of a DMP and an SSP will deliver that control, keep privacy at the center of business, and help to unlock the full potential of their inventory — including deeper audience insights. This deeper view will not only benefit publishers, but it will make it easier for advertisers and their DSPs to target and reach their audiences more accurately across mobile, web, and connected TV.
DMPs and SSPs are more powerful together
When leading DMPs and SSPs combine their valuable media and data capabilities, it makes for a powerful combination that will raise the fortunes of publishers and advertisers alike.
In March, TripleLift announced that it acquired our company, 1plusX. This supply-side platform bought a first-party data management platform to activate first-party data to help its publisher partners better monetize their inventory once third-party cookies are phased out. This is the first acquisition in the company’s history, which speaks to the importance placed on privacy and identity, and the confidence SSPs have in partnering with DMPs built for the privacy era. Combining a scaled SSP and a savvy DMP is a pathway forward for thousands of publishers and ad buyers. This acquisition has created that pathway.
TripleLift is not the only SSP that is planning for our industry’s privacy-centric future. Earlier this year, Magnite announced that it acquired Carbon, a platform that enables publishers to measure, manage and monetize audiences. Other partnerships aim to bridge the gap between consumer identity and the privacy-first web. As a result, publishers and advertisers will get more accurate data for campaign targeting without the need for third-party cookies or mobile ad IDs. Buyers and sellers would then in theory be able to transact based on consumer insights without data leakage or scale reduction.
Mergers and acquisitions will lead the way in MarTech
Companies everywhere are looking to accelerate their ability to fill the gap that the depreciation of third-party cookies will create. Bringing together the power of media and data, as happens when DMPs and SSPs join forces, is just one way that M&A will lead the way. As time marches on and we approach the end of third-party cookies as we know it, we will see mergers and acquisitions among independent MarTech and AdTech companies accelerate. And it will be the mergers and acquisitions that prioritize privacy and first-party data that will win the day. Because in a world without third-party cookies, if your data strategy isn’t a first-party one, then what data strategy do you really have?
TV has long been a staple in the American household. Last year, it was estimated that there were 122 million TV households in the U.S. Despite all of the fragmentation in the market, TV remains an effective advertising channel. In fact, TV was the second most profitable advertising medium in the U.S. in 2021, accounting for 25% of total media ad revenue.
TV is still the most influential screen in the house, but changing consumption habits require evolving targeting strategies. Connected television (CTV) is currently the fastest-growing digital channel. Compared to Gen X, Millennials watch 25% less TV and Gen Z watches 54% less TV, but both groups stream a significantly higher percentage of CTV daily. Twenty-nine percent of Gen X streams over three hours of TV per day, compared to 44% of Millennials and 44% of Gen Z.
Historically, content was created to appeal to the largest audience and broadcast targeting options were limited to daypart, program type, and other general categories. However, CTV offers access to advanced demographic and geo-targeting options that broadcast doesn’t. Similar to other digital channels, viewers can be targeted through first- and third-party data segments, lookalike audiences, and retargeting. But, while one-to-one targeting is a very effective digital or mobile strategy, a more strategic approach is required in order to capture the full value of every TV audience.
Bridging the gap through narrowcasting
Successful strategies consider the best and highest use of each solution. Broadcasting and one-to-one targeting both have their place in the mix. But, it’s important to advertisers to not overlook the audience in the middle. As the additional layer in between broadcast and one-to-one messaging, addressable TV offers a narrowcasting solution to effectively target at the point of need.
Rather than identifying an audience based on data signals, it allows the delivery of ads to targeted households during scheduled linear TV programming. This offers a powerful approach to reaching qualified, refined audience segments in a specific context.
Let’s use the example of sports fans watching an event in a stadium. This audience has gathered to watch a very specific activity. They may represent very different demographics, but have similar needs in this setting. Fans are likely to consume food during the course of the event. Leveraging the audience’s attention and presence in the stadium, marketers can confidently target these fans with ads for hot dogs. In the end, the overarching emotional triggers still apply, but the message does more work when it’s placed in the right time and setting.
Best of all worlds
The true power of addressable TV is the ability to connect transactional messages. It allows advertisers to reach very specific and qualified households and customer types while increasing efficiency. It combines the scale of attention and engagement of linear TV with more effective targeting. The additional reach and frequency can activate additional spend from existing advertiser relationships and may also open new categories.
Addressable TV also makes creative optimization easier and offers the ability to A/B test at scale. Expensive production costs have historically made this process quite difficult. But, with addressable TV, advertisers can easily create four or five versions tailored to major audience categories. This allows them to quickly test what resonates best by changing a simple element, like the voiceover or the music.
Despite all its evolution, TV remains a crucial advertising medium. In a fragmented environment, the best results are achieved by embracing a strategy that incorporates a range of targeting solutions to meet long- and short-term goals. Addressable TV serves as the bridge between an either-or strategy and helps advertisers achieve the best of all worlds.
As online shopping habits evolve, ecommerce is becoming an increasingly attractive revenue opportunity for publishers. We can’t predict what will happen as the pandemic wanes, but prominent studies suggest that ecommerce will continue its upward trend in the coming years.
Given this rosy outlook, now is a great time to investigate the potential of ecommerce (or revisit your strategy). But ecommerce success isn’t guaranteed. It takes careful planning, smart choices, and the right technology partner.
If you’re looking for expert perspective on the key elements of a successful ecommerce strategy, take the time to read Ecommerce in Publishing: Trends and Strategies. Sponsored by Sovrn and published by What’s New In Publishing (WNIP), this new report offers deep insights into the ecommerce space to help publishers develop a winning ecommerce strategy (that goes beyond affiliate). It also provides insights on how to deliver an exceptional shopping experience and maximize revenue.
3 considerations for your ecommerce strategy
Whether you’re just starting out looking to enhance your strategy, there are certain key topics you’ll need to consider. Here are three of the big takeaways from our report:
1. Changing technologies
As ecommerce becomes increasingly enmeshed in the day-to-day digital experience, it’s easier than ever for consumers to make online purchases. And purchase capabilities now span a wide variety of channels – from traditional websites to social media outlets, mobile apps, and more. For publishers, this opens up new ecommerce opportunities that go far beyond traditional affiliate marketing, like curated online stores, subscription boxes, buy-now-pay-later (BNPL) models, and more.
Things move fast in the world of online publishing, so there’s always a new tactic or technology to explore. At the same time, tried-and-true revenue sources can fall out of favor without warning. We’re seeing this play out before our eyes in recent months, with Facebook’s first-ever decline in usage and the phenomenon of “subscription fatigue.” Publishers who tap into multiple selling channels will have more revenue opportunities — and better protection from market volatility — than those who stick with a single online platform or property.
Look for flexible, easy-to-use solutions that work with almost any type of commerce content and one that evolves along with the industry. We believe personalization that delivers a unique shopping experience tailored to readers is the right approach. Also, tools such as price comparison make it easy to cut through the noise and help your readers find the best deals on the products they want.
2. Culture and content fit
It’s important to recognize that ecommerce is not a one-size-fits-all venture. Some ecommerce tactics will work better than others for your brand, your content, and your unique audience. Gaining a deep understanding of your reader base is a fundamental step in developing an approach to ecommerce that will resonate with your audience and selecting the products and merchants they’ll love.
Make sure you analyze which products and merchants are most appealing to your readers. For example, your audience may have strong engagement with certain content, or they may prefer a certain brand that’s featured on your site.
With a better understanding of your overall affiliate program, you can continue to refine your affiliate strategy and drive more revenue. A dashboard can help you identify these trends, by displaying performance metrics and delivering insights on what’s working (and what’s not).
3. Merchant diversification
Ecommerce success requires forming mutually beneficial partnerships with merchants that appeal to your audience. Most publishers start out promoting a single merchant like Amazon or Walmart, because they offer affiliate programs that are easy to understand and implement. But these internal programs rarely offer the highest rates or the most desirable products — and when your earnings rely on a single merchant, any change in commission structure can devastate your revenue stream.
By diversifying your merchant mix, you can ensure that no single vendor has a disproportionate impact on your earnings — and you’ll be in a better position to adjust your strategy in response to market fluctuations. Of course, your target merchant list may change over time as your content and your audience continue to evolve. You may also discover that individual merchants revise their requirements for affiliate approval from time to time — so it can be challenging to maintain a steady mix of merchants on your site.
Maximize your ecommerce potential
Undoubtedly, we’ve seen an acceleration in the adoption of ecommerce that presents an enormous opportunity. Media companies, which offer content that fits seamlessly into the shoppers journey, are in a position to benefit from this trend. But to do so, our research finds that there are a number of critical factors in play (a few of which I’ve covered here). With the right strategy in play, publishers are poised to be a vibrant port of the growing ecommerce marketplace.
About the Author
Rebecca Cole is the Director of Content and Communications for Sovrn, a publishing technology platform that provides advertising tools, technologies, and services for content creators to build their businesses, remain independent, and thrive on the Open Web. Rebecca has more than two decades of experience driving increased attention through purpose-driven content. She has held communications positions in tech, energy, and consumer brands and was a journalist and editor. Rebecca has an undergraduate degree from The University of Iowa and a master’s degree in journalism from The University of Colorado Boulder.
Why does there exist such a chasm between the buy-side and sell-side of the digital media industry? Despite all the personal work interactions, conference events, career longevity and deep relationships, media professionals seem to hone their skills on one side or the other with little thought of changeover. This has resulted in a communication and understanding gap that is likely holding back the opportunity to create stronger industry growth through unlocking greater media innovation, efficiency and better consumer content experiences.
The pace of change in our industry continues to accelerate. Those with the greatest perspective – of commercial business models, underlying technologies, regulatory environments and consumer impact – are best prepared to succeed. There needs to be more collaboration and shared insights across the buy-side and sell-side for the sake of our industry’s future.
Our industry today is driven by the buy-side. That is where the money is and suppliers have largely succumbed to being price-takers driven by third-party data-targeting tools within the DSP environment. However, we may now be starting to see the beginning of a shift in the buyer-seller equilibrium. Since advertisers soon will no longer be able to obtain the same level of access to third-party audience data given tightening regulations and changes within the broader adtech ecosystem, buyers will need to make a more direct connection with their direct suppliers – be it a publisher, retailer, or other. Sellers who understand buyers’ objectives the most will be best positioned to gain from the new value equation.
As this value recallibration plays out over the next 18 months, we offer the following three insights from the buy-side that will benefit publishers. The buy-side may control the budgets, but the sell-side is responsible for maintaining the integrity and viability of the audience and is the keeper of the audience data. There is much for successful sell-siders to learn from the buy-side.
1. Best audience = scale +fidelity
Buy side insight
On the buy-side, the desire for control has led to a mentality of “anything that can be bought programmatically should be bought programmatically.” As programmatic execution continues to grow, audience targeting plays an important role. Advertisers utilize a menu of relevant audiences for their campaigns. They isolate each segment on distinct ad serving placements when they want to see performance at a granular level.
Generally, audiences will span first-party, second-party and third-party segments. Advertisers prioritize the use of first party site visitor data segments followed by strong-performing second party segments that are native to the DSPs they utilize. Third party audience segments are approached with a heavy sense of skepticism. Advertisers quickly point to the unrealistically large size of 3P audiences and the consistent lack of details/transparency into the composition of said audiences. Sometimes, to reduce uncertainty pre-campaign, advertisers will index their 1P audience against a library of 3P audiences to identify those most likely to be performant.
Publisher benefit
All parties are skeptical of third-party data, and second-party data is typically isolated to DSPs. This leaves first-party data as the data of preference. Needless to say, this is an area where publishers, as the conduit to users, are the best source. The critical path to adoption is for publishers to offer that in a scalable way that can also achieve the marketer’s performance goals. Large publishers with authenticated users need not worry about the buyers’ concerns over scalable first-party audiences.
However, the vast majority of publishers need to address these concerns. For this group, the best bet is to take advantage of the new technologies available; identity providers, first-party audience lookalike modelling, user widgets/tools. Once those are in place, obtain a direct line of contact to your buyers and discuss your scaling methodology with them. When that is established, you have taken the first step in creating a future-proofed partnership with your buyer that will have revenue benefits. Of course, the next step will be retaining their business, which will require them hitting their KPI’s.
2. Best performance metrics = flexible, custom KPIs
Buy side insight
Buyers tend to perform a balancing act across a range of KPIs (sometimes uncorrelated) within a single campaign while contending with a rapidly changing measurement environment. These KPIs range from Media Quality (viewability, fraud, brand safety) to Ad Engagement (hovers, clicks, interactions) to Cost Per Action (Site Visit, Lead, Customer Acquisition).
Most advertisers want to build a singular 360-view of their customers. But how can a publisher consistently provide the right data to a buyer given the plethora of KPI’s and the fact that they’re not the ones running the media? The answer is having the right combination of technology and services.
Publisher benefit
Having a standalone, new age DMP with all its bells and whistles might allow the pipes to be connected for the sell side to the buyer, but the work doesn’t stop there. The seller needs to inherently understand the advertiser’s KPI’s, their specific needs for their data segments, and have a closed loop funnel on communication and reporting to feedback campaign performance and objectives.
This way, the data that’s shared, be it in cohorts, segments or other, can be amended, tightened, loosened over time as the advertiser feeds back information. Once this combination of technology and service is in place, the seller can transition from being a vendor that supplies inventory to a consultative partner – and reap the rewards of a trusted long term relationship.
3. Best value = direct + efficient transactions
Buy side insight
One buy-side trend in recent years is supply path optimization, expedited partially by the rise of header bidding. Buyers typically run on a list of approved publishers only, and often on a list of approved exchanges thereby optimizing the supply path to address issues like fraud, brand safety, bidding on duplicative placements and performance.
This is often done without direct contact with the publishers and typically by pulling a report within the DSP to find the highest quality path. However, this lack of communication can result in a loss of value on both sides, as often high-quality publishers are blocked. Buyers should give them a chance to work directly with them to create an inventory package that works for them given their KPI’s and brand safety requirements.
Publisher benefit
Getting onto a buyer’s target list of sites can be challenging, particularly because the buyer isn’t going to reach out and tell you when they’ve blocked you. Publishers that are transparent will benefit here: Be open about the way you sell your inventory and the brand safety measurements you can provide.
Remember that good publishers can get added to “avoid lists” based on their performance on the open exchange. If you’re a publisher that sells most of your quality inventory via deal IDs, it’s no surprise that your open exchange inventory doesn’t meet the standards of the buyer. Collaborating directly with buyers makes it easier for publishers to package- inventory (without losing the uniqueness of each publication). This can be done via an open conversation or a technology portal (SSP, DMP), but ideally a combination of both.
The new buy-side / sell-side equilibrium
From a holistic perspective, the buy-side is looking for something pretty straightforward – scale, performance and efficient access. The sell-side needs to highlight the power of the assets they bring to the table and how they meet these needs.
The underlying symbiotic nature of the advertising ecosystem means that the buy-side requires a healthy sell-side with robust audiences. They are incentivized to make sure publishers can succeed. As both sides work together even more transparently, revenue uplift will go hand in hand with removing the roadblocks and complexities that anchor our industry’s growth potential.
