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Perspectives | Revenue

Yes, publishers can compete with Google (here’s how)

As antitrust investigations envelope tech giants like Google and Facebook, some publishers may be lulled into thinking that their competition with Big Tech is fading. It’s certainly encouraging to see that Google may be held to account for their monopolistic practices. However, it’s unlikely to change the fundamental battle between publisher and platform. Google will continue to profit from news delivery and aggregation, and marketers will still funnel large portions of their budgets to stay at the top of search results. But to say that Big Tech is here to stay is not to admit defeat. This David and Goliath battle will surely rage on, and there are plenty of ways publishers can win along the way.  

If Google escapes all 50 state attorneys general investigations unscathed, will the pressure from publishers and legislators be enough to force change? The likelihood of any specific outcome aside, this recent news has led to a fascinating game of “what-ifs.” Well beyond mere speculation, this exercise is helpful for legislators, publishers and tech giants alike.  

So, what changes if Google loses? 

Whether Google faces fines or recent scrutiny leads to legislative changes, most agree that Google will have to make fundamental changes in the coming years. Since News Media Alliance reported that Google made $4.7 Billion in 2018 from aggregated news content, calls for Big Tech to begin sharing a piece of that revenue pie have grown louder and more insistent. 

Proposed policies like the Journalism Competition & Preservation Act would enable publishers to collectively negotiate directly with Big Tech platforms to “improve the access to and the quality of news online”. Senators John Kennedy (R-LA) and Amy Klobuchar (D-MN) introduced this legislation in June, a key tenant of which is the establishment of a 48-month “safe harbor” (a.k.a. regulation-free period for Google) for publishers to “band together to negotiate with dominant online platforms.”  

One must wonder what is preventing publishers from doing this now, and what would be achieved. You’ve armed David with a slingshot, but where is the stone? For some, it is hard to believe four more regulation-free years for Google would lead them to start paying publishers for their content. 

Either way, publishers must emphasize how they compete 

If the changes on the table are unlikely to move the needle for publishers in a significant way, can publishers compete with Big Tech? Yes! And they should. The challenge for ad sales teams is to learn how they stand out against Big Tech digital advertising and be prepared to clearly articulate this to advertisers.  

Too many local publishers are unprepared to compete with Google and Facebook, and believe their only option is to partner directly with their biggest competition. What they fail to realize is that if they could only communicate to advertisers why they should add local advertising into their marketing mix, they could tap into an important revenue source.  

In the eyes of marketers, how do publishers differ from Big Tech?   

Here are four difference that publishers can capitalize on: 

1. Trustworthiness 

DCN has long emphasized the importance of quality, trustworthy content. And this is not just for the sake of readers and the future of journalism, but also because these factors are critical for advertisers. Due to the “black box” nature of Big Tech algorithms, campaigns from trusted brands may end up in distasteful corners of the internet. This is not only embarrassing for reputable brands. It can have a detrimental impact on their bottom line. 

In contrast, publishers are not only focused on the quality of their content, but they vet their advertisers as well. Marketers need not fear their ad campaign showing up next to pornography or propaganda. The trust that readers place in a quality publication is extended to the brands that advertise there. And this value is nearly impossible to replicate on Facebook or Google.  

Ad sales teams must be prepared with the facts about ad fraud and why trustworthiness is critical for campaign success.  

2. Audience data 

Advertisers don’t want to purchase impressions or ad space – they expect access to specific audiences.  Google makes this easy. Do you? Publishers have an opportunity to show advertisers that they can leverage their first-party data for a better user experience and higher-quality, audience-driven campaigns.  

If your publication is behind a paywall (in full or in part), you already know the value of your first-party subscriber data. Be the opposite of Google’s algorithmic black box. The more transparent you can be, the more value marketers will see in your audience.  

3. Omnichannel campaigns 

Advertisers want easy to understand campaign options, a clear understanding of campaign ROI, and they want doing business with a publisher to be easy. With the right tools, publishers can deliver on all these things – but they must go one step further.  

We’ve shown that publishers can compete head-to-head on trustworthiness and quality data. But what can publishers offer that Big Tech cannot? Omnichannel campaigns that cross mediums and deliver clear results. Who else can combine digital and print with OOH and events?  

As publishers diversify their revenue streams, they must be careful to train sales staff to understand the uplift these additional channels can provide for advertisers.  

4. Marketing expertise 

More and more publishers are adding marketing services to their offerings, and it’s no wonder. Research from Borrell Associates indicates that agencies and advertisers alike look to media companies for marketing expertise. This means your sales teams need to be prepared to be that expertise. The consultative selling approach has been proven effective. However, it requires a dedication to understanding the latest trends and recognizing how your products and services can help advertisers capitalize on them.  

Time will tell if Google and Facebook will be held to account for their monopolistic practices. Regardless of how policies change, publishers must recognize that they’re already able to compete with Big Tech. It is critical that ad sales teams understand what differentiates them from the Googles and Facebooks of this world. If they can, they’ll become an invaluable resource to reputable brands and local advertisers.  

Perspectives

Editorial and sponsored: Has branded content blurred the divide?

With such a large appetite for content in the digital landscape, sponsored content has become a key source of revenue for the publishing industry. But with branded content leveraging the tone and style of a publication, should the editorial team exercise oversight, ensuring the sponsored pieces meet their high standards? Or should they focus on continuing to build trust with their readers in a space where paid and earned content look increasingly similar?

As sponsored content has transitioned into a common advertising practice, publishers can see the financial benefits of producing branded content for their audience. The more divisive question is how — if at all — should an editorial team be involved in its creation?

To better understand how the two sides of the digital publishing industry — sponsored and editorial — work together, Pressboard conducted a survey of 32 industry professionals. The results show that the industry is divided on whether the two teams should collaborate on sponsored content creation. More than half of the respondents reported that their editors are not involved. On the other hand, 46% reported some degree of editorial involvement in creating sponsored content.

Among the respondents who indicated that their editorial teams were involved in creating sponsored content, the level of involvement varied. Some divulged that they were very involved, while others only somewhat. The relationship is evidently a complicated one, especially as audiences grow more accepting of branded content.

“The more I see branded content online and in print the more accepting I find readers have been,” stated Joel Vosburg, Advertising Account Manager for Gripped Publishing. “The primary concern for their audience isn’t whether or not the content has paid sponsorship, it’s the transparency of the advertiser’s involvement.”

Does branded content influence editorial?

The question of whether editorial content should be free from influence is an important one. However, those in the industry understand that it is not always cut and dry. While 33% of respondents shared that the brands that they partner with have some effect on editorial content, 13% said their editorial is very affected. Publishers in the product review space were vocal about how the editorial content they can create depends on the brands they work with. Vosburg explained that it’s “tough to provide editorial coverage when the brands do not work with [you]”.

However, the separation between editorial and sponsored content teams is much more substantial when it comes to news coverage. In fact, some publishers have strict policies in place that forbid brands from influencing editorial content.

Striking a balance between sponsored and editorial

As we delve further into the data, it becomes more apparent what approach publishers are currently taking with sponsored content, as well as how the industry may evolve going forward.

A strong majority of respondents feel that editorial pieces should be at the forefront of a publication’s site, with only a small number indicating that they feel their site should be evenly split between editorial and branded content. However, respondents were somewhat less rigid when the question involved a lifestyle site as opposed to a news site.

“You need to be keenly aware of what your readership wants and does not want,” stated Nikki Csek, CEO at Csek Creative (which supports NowMedia). When asked exactly how much sponsored content is ideal for your site, Csek noted, “As much as your readership is interested in engaging with. Sponsored content can be as interesting and sometimes more interesting than day-to-day editorial content.”

The tone, look, and feel of your website should be cohesive including the sponsored content it hosts. This question garnered the strongest agreement amongst respondents, with 84% agreeing (strongly or somewhat) that sponsored content should look and read similarly to a site’s editorial content.

Mindy Claggett of COX Inc. said this concept had a key role in defining her position. Though she is the Associate Editor of Branded Content, her role reports directly to the editorial team.

“[They] decided that my role should report through editorial primarily because I would be creating content, so they felt I needed to be on the content team. Additionally, they wanted to ensure that even paid content was consistent with the brand standards for our publications and sites, and that the content would fit the brand voice.”

Half of all respondents affirmed that audiences do care whether content has been sponsored by a brand. Readers — especially millennials — generally don’t like ads. However, 58% of millennials will watch ads if their favorite digital personalities are involved. Therefore, presenting high quality information and entertaining content is still imperative.

Maintaining trust

When a brand is connected to a publication it benefits from the same level of trust and credibility, which is important to readers. The relevance and pairing of the brand and the publication must be believable for your audience to want to engage with the content produced. Partnering with brands your audience cares about has proven successful for several of the publishers who responded.

It is important to note that when it comes to branded content, audiences are sympathetic to the economics of the publishing industry. According to Vosburg, “Readers understand the troubles some publishers find themselves in these days and know that financial support through content is a way to help this.” 

It’s clear that publishers and brands will continue to collaborate in creating content. But for now, the question of whether editorial teams should be involved remains unanswered. On one hand, the emphasis placed on maintaining the impartiality of editorial content suggests that there should be a strict divide between editorial and sponsored teams. On the other hand, the need for sponsored content to look and feel similar to editorial suggests that there needs to be some degree of editorial involvement. And it’s likely this relationship will remain complicated in the near future as sponsored content becomes an increasing source of revenue for publishers. It appears that only one thing is certain: Sponsored content is here to stay.

Advertising | Perspectives

B2B companies up digital marketing in response to industry trends

As the B2B space evolves and matures, so must its marketing. In recent years, consumer-facing brands have come to terms with the “adapt-or-die” scenario. Now, B2B brands are following suit by adopting people-based marketing and new levels of personalization. In response to opportunity (as much as out of necessity), B2B advertisers are shifting their advertising dollars towards digital advertising.

B2B focuses on digital advertising in 2019

According to a December 2018 study by eMarketer, the US digital B2B ad spend is on the rise,  increasing from $2.9 billion in 2015 to $6.08 billion in 2018. The biggest jump in spend, a 24.9% increase, occurred between 2017 and 2018. The following month, January of 2019, Mark Treacy, Head of Sales – B2B at Oracle, predicted that B2B marketers would continue to invest more in data and analytics capabilities, which would increase the competitive edge within the industry.

In July 2019, my company, advertising intelligence and sales enablement platform, MediaRadar decided to take a closer look. So, we analyzed whether B2B brands had shifted to buying both print and digital ads, as a follow up to our 2018 B2B recap trend report, which had found that most B2B brands would only spend on either print or digital. In fact, according to the 2018 report, only 11% of brands bought both print and digital placements.

Our deep dive in July of 2019 revealed that, while not much has changed, there was a slight deviation toward digital and print ad spend within B2B in the first half of 2019. The study also found that B2B companies’ digital ad spend rose 36% year-over-year, when comparing the first half of 2018 with the first half of 2019. This indicates a pretty significant shift toward digital ad spend within the B2B space.

Who is taking the lead? 

Industries paving the way towards increased digital advertising include both those that are spending the most on digital ads as well as those who are increasing their ad spend the most. Our study revealed that the B2B industries that spent the most on digital ads in 2019 included the Pharmaceutical, Finance, and Professional Services industries. The B2B industries that increased their ad spend the most year-over-year were Cigarettes & Tobacco, Beer, Wine & Spirits, and Beverages (Non-Alcoholic).

Looking at the top companies within these categories, the analysis found that the digital ad leaders in the pharma industry included Endo International, Pfizer, and GlaxoSmithKline. Pfizer, who has partnered with multiple platforms to serve its programmatic ads, has spent over $100 million across all media. They have placed video, direct and programmatic ads on major domains in 2019. 

Additionally, the data revealed that TD Ameritrade, Schwab, and Vanguard lead the pack within the finance sector. Vanguard, specifically, ran display ads on major online publications such as U.S. News & World Report and BBC.

Within professional services, our research saw that Informa, USPS, and Accenture spent the most on digital ads. USPS, in particular, placed display ads everywhere from Jezebel to The Economist. 

Recently, a LinkedIn Marketing Solutions blog by Sean Callahan reported that these major companies are all part of the rapidly growing $6 billion B2B digital advertising market in the US. According to Callahan, the expansion into digital advertising has been triggered by several factors, including increased popularity of both account-based and people-based marketing within the B2B space, the advancement of programmatic platforms, and the increased power of personalized content sequencing.

What’s next? 

While B2B companies are certainly making strides when it comes to following digital trends, there are still areas left to improve. Most B2B brands are still focusing their advertising spend on print. According to our July 2019 data, 56% of B2B advertisers are spending on print only, consistent between both 2018 and 2019. However, now that it is clear where the industry is headed, we can only wonder how both these brands and publications will soon adapt, and grow the share of B2B companies using both channels. 

The B2B industry must take stronger leaps in digital advertising to fully reap its benefits. However, they are moving in the right direction and, as the space continues to transform, so will it’s advertising tactics.

Perspectives | Revenue

Build paywalls, and people will dig holes

People used to be loyal to a single publisher. They paid for the content then and there (or were longstanding subscribers). And they didn’t even notice stories from other publications. It’s frustrating that online content consumption hasn’t work in the same way. But the same system that brought about the democratization of online content also broke publisher loyalty.

Suddenly, consumers had access to numerous content platforms. The barriers to entry lowered and smaller, niche publications could reach a global audience, adding multiple views to the same angles. This meant people got used to judging by the story rather than by the publication.

Paywalls should work as a logical solution to monetizing online content. And paywalls do function as a way to pay for content. However, they don’t account for the way the majority of online users actually consume content. They can be an inflexible solution in an environment that changes daily.

That’s why publishers need to consider paywalls as one element of a wider monetization strategy.

Paywalls turn away 98% of users

The formula for consuming content used to be: Seek out a source of content you trust or enjoy—such as a newspaper. Now online content producers have to find, and fight for, audiences. Through media aggregation and search platforms, news competes with other versions of the same story for reader attention. Now users don’t have to choose just one publication and stick with it. Information is everywhere. This has led to to consumers having a distributed, fragmented web of content sources.

For hard paywalls to work as a primary monetization system, publishers must possess (or build) a formidable audience based upon a strong, trusted brand. Many readers will only pay for content they know they can’t get anywhere else. Major media brands have the resources to offer this. But even then, the many readers are going to look elsewhere for content, particularly if they hit a paywall and feel they can find good enough information for free.

Speaking at a publisher conference, Marfeel CEO, Xavi Beumala described the problem of scaling a paywall model. “Even in the US market of 330 million, the total amount of business you have for a subscription model is always capped. You can’t scale it ad infinitum.”

The generations that are loyal to a single media source are dying out.
Subscriptions may work for the New York Times. However, the New York Times is using the fuel of the reputation it took 100 years to build (not to mention a significant investment in its technology and delivery). Without new readers experiencing the quality of their output, some question whether this model continue to sustain the brand for another 100 years.

Other media groups, such as The Guardian, have bucked the trend with a voluntary subscription basis that doesn’t wall-in content. This model relies on readers wanting to support the business and see it continue to operate. Again, brand strength and reader trust and value are big factors here.

Netflix for news

Content aggregation platforms represent a further hurdle for publishers that want to paywall their content. Several big tech companies have announced plans to deliver news and entertainment from multiple sources in their own subscription platforms.

While publishers will be able to negotiate payment rates that allow their paywall-segregated content to appear in aggregated content platforms, these deals will always favor the major tech companies over the publisher. It’s not hard to imagine these companies also downgrading search results or newsfeed positions for any content that has a paywall—that they don’t operate. Facebook, Apple, and Google don’t want to direct users to content or a search query only to have that user bounce back from a hard paywall.

The arrival of these news platforms also offers further competition to the paywall model, one that has a real chance to further disrupt publisher loyalty. Consumers may hedge their bets, possibly choosing to pay more to see content from multiple sources than tethering themselves to a single subscription.

Easy to get into, hard to get out

Google’s latest Chrome update was an example of how the ecosystem is built around a handful of major technology providers, and small changes can cause major disruption.  The update in question prevented publishers from detecting if users are browsing in incognito mode. 

Intended or unintended, the consequence of closing this loophole meant that many publishers’ metered paywalls were no longer effective. When readers hit their article limit they can switch to incognito mode and instantly reset their meter of free articles. 

Publishers suddenly found that their paywall solution was ineffective, in one single stroke from Google.

Distributing monetization

A lack of resources to build technology means that some publishers bet all of their chips on a single strategy. And, for some publishers, paywalls represent a functional option with a guaranteed level of revenue. 

But paywalls can be a blunt and imprecise tool. They cut off the majority and work for a minority. With a paywall, you often close the doors to new readers and rely on a core of hyper-engaged users. These readers are effectively paying for the loss in traffic that the paywall creates. It also insulates content in a world where sharing and exposure are the oxygen of publications. 

Using different sources of technology, publishers are now able to deliver a layered monetization strategy that meets the needs of different readers, different content, and different stages of the engagement journey.  Technology that implements programmatic, direct, paywall, subscription, micropayments and more will empower readers to build tailored packages. Like GDPR, readers will be able to select their preferences based on their needs.

A small percentage of readers will want (and pay for) a dedicated, personalized, ad-free experience. For these readers, a hard paywall with a personalized experience is the perfect solution. A far larger subsection of the audience will accept advertising in return for content that is free at the point of purchase.

Broad multitudes within this grey-area will sometimes pay, sometimes won’t. They won’t accept recurring transactions or fees and will need the process to be frictionless. For the first time, mid-size publishers will be able to out-pace major media groups that are forced to develop bespoke solutions, banking on only the most profitable. 

More technology and monetization platforms are being democratized and made available to mid-sized publishers. With a sliding scale of monetization options, they will finally have the ability to reflect readers’ stage in the process, capture new traffic, and give readers options that will build a longer-lasting connection with their brand. 

Innovation | Perspectives

Product management is not project management

In today’s digital economy, all businesses are software businesses – especially content-focused businesses like digital publishing. With a wide range of apps and platforms all competing for consumer loyalty,  companies that would have never called themselves tech companies are now engaging with developers and innovators to maintain customer engagement. Understanding what drives successful product development is critical to achieving growth. 

One of these key realities is that product management is not the same thing as project management. 

Whenever 3Pillar advertises for a product manager, the majority of the resumes we receive will inevitably be from project managers. However, these are vastly different jobs. And hiring for them as if they are the same is one of the biggest mistakes a company can make. 

In product development, the product manager should be responsible for the “what,” the “why” and the high-level “when.” However, the project manager should be responsible for the “who,” the “how,” and a more detailed “when.” 

Building a railroad

Let’s use the analogy of a railroad: The product manager is the person responsible for deciding that a railroad is the right solution for the problem of getting people from point A to point B. The product manager also charts the course to navigate the terrain. He or she determines where the train will go and what stops it should make and the route taken including questions like whether it should go over or through the mountains. 

A product manager also prioritizes the sequencing of railways between stations. Perhaps he or she determines that New York to Boston is the most critical route. Only after that’s finished and operational should the railroad build a track to San Francisco.

Project managers, on the other hand, are responsible for laying the tracks and making the trains run on time. In product development, a project manager plays this role. They are responsible for the internal operations of the train: how fast the train goes down the track, what fuel it uses and what parts need to be replaced. 

Finding the best 

In the big picture, product managers are responsible for maintaining the long-term product roadmap and defining the product vision, while the project manager is responsible for managing the team’s day-to-day activities. 

The best product managers inherently have these four key areas of responsibility: 

  • Product strategy: Setting the vision and determining how to get there.
  • Product roadmap: Managing and prioritizing the backlog of features, defining them and making associated trade-off decisions. 
  • Product releases: Setting what features will be delivered to the customer and coordinating all aspects and interdepartmental dependencies.
  • Product ideation: Running the ideation process, collecting feedback and data, analyzing that data, thinking creatively, curating new ideas and promoting the most relevant ones into the backlog as features.

Product managers do each of these things (and many more) because they understand that they can’t build a product, pass it off to a project manager, and call it a day. That’s because product management – like product development – is never done.  

To give a real-world example of the difference between the two, imagine we’re talking about the team behind a fitness app like Fitbit. The product manager would be responsible for deciding that users would benefit from a series of video tutorials based on the type of workout a user wanted (Fitbit users might recognize this as Fitbit Coach). Once a decision had been made to go in that direction, the project manager would be responsible for working with the team to design, implement, and test those changes in the expected timeframe.

Common goals

Of course, in mature organizations with a product mentality, you won’t find a project manager on most teams. Instead, engineering managers typically take on the project management tasks that are actually applicable to the environment.

Product management and project management, working in concert, are essential. 

This starts with adopting a company-wide foundational mindset that doesn’t focus on antiquated IT thinking, which separates teams by function. Instead, this modern mindset focuses on common goals and making sure all members of the company understand the “big picture.” 

In today’s increasingly digital world, this means engineers, designers, marketers and finance working alongside product managers to build software that directly addresses the customer’s wants, stays ahead of the changing market, and ultimately drives revenue and profit back to the company. At 3Pillar, we call this the Product Mindset, and it drives how we approach every digital product we work on.

Great project managers are an indispensable part of a successful company. But you have to start with great product management. This is how you will be able to innovate and ultimately disrupt digital publishing markets and grow market share. Content is important — but product is king.

About the author

David DeWolf is CEO of 3Pillar Global and co-author of “The Product Mindset: Succeed in the Digital Economy by Changing the Way Your Organization Thinks.”

Perspectives

Is your website at risk for ad fraud?

The amount of money marketers waste on digital ad fraud is enormous, with one estimate reaching as high as $42 billion worldwide this year. But advertisers aren’t the only ones losing. Publishers also lose when ad fraud diverts revenue from quality websites to fraudulent ones.

Legitimate publishers might think they are protected, but even quality sites can fall victim to ad fraud. Here are four questions that will help you evaluate your risk:

1. Do you purchase traffic?

Many publishers use third-party sources to drive traffic to their sites. Not all traffic sourcing is harmful. Marketing practices such as email campaigns, sponsored social media posts and search engine marketing are legitimate ways to bring quality audiences to your website. However, the risk of introducing invalid traffic increases when publishers purchase traffic. Traffic sellers may guarantee a certain number of human visitors at a low price. That said, bot traffic can be engineered to look human enough to pass through fraud detection software.

While bots may increase your numbers, they don’t make purchases or offer any real value to advertisers. If advertisers aren’t getting any conversions from their ad placements and campaign ROI isn’t meeting expectations, they’ll invest elsewhere. The best way to keep bots off your site and deliver real audiences to advertisers is to engage in legitimate marketing practices and avoid purchasing traffic.

2. Have you implemented industry solutions?

As ad fraud becomes more widespread, industry organizations are creating solutions to address areas where publishers may be vulnerable. One example is domain spoofing. Fraudsters create fake sites to look like real ones and divert ad revenue intended for real publishers. In response to this tactic, IAB developed ads.txt and app-ads.txt to help demand-side platforms detect unauthorized digital sellers in programmatic buys. In these files, publishers list all authorized sellers of their inventory and upload these lists to their websites. DSPs then crawl these files to make sure that they are buying from legitimate SSPs.  

The industry is taking the next step to improve security in programmatic buying and selling with signed bid requests, which is part of the IAB’s OpenRTB 3.0 Framework and complements the ads.txt protocol. This allows a buyer to validate that a bid request is from the intended publisher and that key elements have not been altered.

Another recent development is sellers.json and OpenRTB SupplyChain object. With sellers.json, SSPs and exchanges list all authorized sellers and resellers within the supply chain along with seller IDs. Buyers check both ads.txt and sellers.json files to make sure the IDs match. If they do, then they know that those entities are authorized to sell the inventory. The SupplyChain object allows buyers to see all vendors participating in a bid request. Since multiple resellers are often involved in the sale of one impression, these tools help buyers keep track of all of them including the final seller, whereas ads.txt only lists direct authorized vendors of a publisher’s inventory. These initiatives work in tandem with ads.txt, which is why it’s important for publishers to keep their ads.txt files up-to-date and accurate.

3. Do you have third-party oversight?

Using ad fraud detection software is an important step for publishers to detect and measure invalid traffic on their sites. But since different vendors use different methodologies, relying only on one solution can allow some fraudulent activity to slip through the cracks.

While technology is vital to employ in the fight against ad fraud, human oversight is just as essential. An independent, third-party website audit identifies areas of risk that technology alone might not detect. An audit takes a deep dive into all aspects of website monetization including the processes, procedures and controls that the publisher has in place to reduce the risk of fraud. If an anomaly or suspicious traffic source is identified, the auditor brings these concerns to the publisher’s attention with suggestions for improvement. Third-party audits provide an extra layer of protection against fraud and help publishers stand out to advertisers by demonstrating that they provide transparency and maintain a high-quality advertising platform.

4. Are you taking a holistic approach?

While there are many tools available to minimize ad fraud, one solution alone cannot solve the entire problem. It’s important for publishers to take a multi-layered approach to widen their net. Make sure the vendors you partner with are accredited and adopt industry initiatives like those mentioned above.

Most importantly, establish good business practices for sourcing traffic and traffic monitoring. Communicating these best practices to your staff will help them understand their responsibility to combat fraud. Lastly, partner with a reputable auditor to add an extra layer of protection and demonstrate your commitment to transparency. By incorporating a variety of tools into your fraud arsenal, you’ll have a greater chance of preventing fraud while developing a reputation for being a safe place for advertisers.

Want to learn more about how fraud occurs on legitimate websites? Download our white paper Three Truths That Help Confront the Digital Ad Fraud Crisis.

Innovation | Revenue

Given Google Chrome’s “incognito” update, it may be time to rethink your paywall strategy

Google’s launch of version 76 of Chrome fixed a loophole that previously allowed publishers and other site owners to detect readers who were browsing in incognito mode. Aside from this loophole having serious privacy implications, a consequence of closing it meant that many publishers suddenly found their paywalls unlocked. WNIP estimates that as many as 33% of paywalls could have become unlocked due to the update.

Undoubtedly, paywalls are an important revenue model for many publishers and site owners. And given that Chrome has a market share of 64%, the impact of this update is widespread because it makes it easier to bypass paywalls by simply opening a page in incognito mode.

The talk of paywalls – and their relative strengths and weaknesses – makes this a good time to give some thought to your paywall strategy. Here are some different types of paywalls and how they may or may not be affected by Chrome’s latest update:

1. Hard paywalls (e.g. Financial Times)

The name says it all in the case of hard paywalls. Users cannot read any content (at least not in full) without subscribing and will have their pathway immediately blocked. The restrictive nature of hard paywalls may limit the number of potential subscribers, particularly as the approach isn’t tailored to specific audiences and behaviors.

Publishers that implement hard paywalls rely on a high amount of loyal regular users, which means they are probably more likely to specialize in specific fields. For example, this model can work for trade magazines and resources because they have more of a niche, loyal audience.

However, there are shortfalls that come with the hard paywall. For example, readers without a keen interest in the product will typically slip away quickly after first seeing the paywall message. And they are unlikely to return.

2. Freemium paywalls (e.g. Der Spiegel)

With a freemium paywall, a publisher lets readers have access to specific content for free. Here, publishers select premium content that is placed behind the paywall, while other content is freely available. Sometimes a publisher will select some of their biggest stories and features and free them up to non-subscribers, hoping this will then entice them to hit the subscribe button.

Take for example Der Spiegel, which offers different packages for both digital and print subscriptions. These are often tailored to different devices, like mobile and tablet. Some subscription plans can also provide users with additional bonuses like ebooks, tickets to thematic events, and more. This type of investment in engagement has translated into strong brand loyalty for German audiences.

3. Metered paywalls (e.g. The Economist)

Metered paywalls work in a similar way to freemium paywalls and there are a lot of freemium/ metered hybrid walls out there. A typical metered paywall gives readers access to a fixed number of free articles during a specified time period. If they want to read more, they have to subscribe. The issue with this model is that readers sometimes get accustomed to the free content and convince themselves that becoming subscribers isn’t worth it, as they already get enough for free.

Sometimes these publishers — such as The New York Times, The Economist, and Wired — require a registration to read the free content as a middle stage in the customer journey in an effort to convert these casual readers into paid subscribers. Registered readers become known users. Therefore, it becomes much easier for publishers to keep them engaged and target them with tailored offers. This is currently developing into an industry standard and is in line with a trend where the logged-in status will become much more common. Again: good for publishers.

Metered paywalls are those most impacted by Chrome’s update. Some readers have long used incognito mode to dodge metered paywalls. As the publisher can’t track incognito users, the site assumes that the reader is a new visitor and resets the meter to zero.

One of the most limiting things about these three more traditional types of paywall, and something they all share in common, is that each paywall behaves the same way regardless of who interacts with the site. They also put the content first rather than the user, placing the burden of generating subscriptions on the content alone, which in turn ignores the huge boosts in subscription growth that data-driven, real-time personalisation can offer.

4. Dynamic paywalls (e.g. The Wall Street Journal)

A dynamic paywall works by understanding reader behavior in real time and tailoring the online experience based on their needs. Essentially, it is designed to reach audience members who display behaviour that could suggest a liking for a publisher and a likelihood of subscribing.

This means the paywall block might appear faster for readers who spend a lot of time interacting with content in order to try to encourage them to register and eventually subscribe. If a reader only visits a publisher occasionally, they might get access to more free content in order to gradually build an affinity which could lead to them eventually signing up. Readers will also be served tailored free content based on their unique interests. Basically, there isn’t a one-size-fits-all approach and this is what makes a dynamic paywalls stand out from the pack.

The thinking is that this data-focused strategy should find the people most likely to subscribe and give publishers flexibility to target consumers in different ways. A dynamic paywall can optimize your audience and traffic while maximising your revenue potential, with publishers such as The New York Times and Wall Street Journal crediting dynamic paywalls for driving substantial subscriptions growth.

Additionally, a dynamic paywall applies machine learning to raw data to provide publishers with in-depth insight about each individual reader and provide them with a personalized experience that is generated in real time as they browse the site. A dynamic paywall will also often have a propensity model that can categorize readers automatically according to their likelihood to subscribe.

Sure, some publishers will choose to maintain their conventional (or, some might say, old fashioned) paywalls. This may be because they don’t have the technology to execute any other way.

However, forward looking publishers understand the need to find a new business model that drives long lasting engagement from being more dynamic. So, in light of this Chrome news, publishers should look at the change as an opportunity to re-evaluate their current paywall model. It might be time to rethink the paywall strategy as one based on personalization to drive sustainable long term customer relationships.

Advertising | Industry-Research

Malicious ads are down. But don’t rest easy yet.

Even among the largest SSPs, there is an enormous difference in quality: The worst performing SSP is 60 times more likely to deliver a malicious ad than the best. Premium publishers need to vet their SSP partners carefully and be aware of how each SSP deals with malicious, low-quality, and In-banner video ads.

Confiant recently conducted our fifth research study on malvertising and ad quality in the digital advertising ecosystem. Confiant’s Demand Quality Report analyzes a normalized sample of over 120 billion impressions and captures unique insights into the quality of ads served by the programmatic marketplace. 

How’s the industry doing in Q2?

The chart below shows malicious, In-banner video (IBV), and low-quality ads as a percentage of total impressions over the past five quarters. In Q2, we saw a significant drop in malicious ads and In-banner video (IBV) ads. Malicious ads are down from a high of 0.54% in Q4 2018 to 0.25% in Q2 of this year, the lowest rate observed in our five reports. In-banner video ads are also at an all-time low at  0.10% of impressions in Q2, down from 1.40% one year ago. We suspect that if this trend continues, IBV ads will be all but extinct by the end of 2019. 

However, this isn’t to say trouble isn’t lurking, given the highly dynamic nature of online advertising. Low-quality ads continues to be problematic with an increase from 0.14% in Q1 to 0.18% in Q2. 

What’s driving these declines? 

The decline of malicious and in-banner video ads defies a single explanation. However, trends suggest collaboration efforts from the following could be helping:

  • The near-universal adoption of ads.txt on top sites, which is driving out arbitrage and unauthorized resale. 
  • Increased vigilance on the part of the SSPs when it comes to ad quality issues
  • The use of creative-verification solutions to improve industry defenses
  • Industry initiatives like TAG’s Certified Against Malware program
  • Better coordination between publishers and ad platforms, which narrows the brief window of time that malvertisers have before their exploits are detected and removed. 

What challenges lie ahead? 

Even with these improvements, we found that one in every 200 impressions are marred by a serious security or quality issue. We also found that rates of malicious activity vary significantly based on the day of the week. Impressions served on Sunday are three times more likely to deliver a Malicious payload than those served on Thursday. 

Although we are seeing a decrease in malicious and In-banner video ads this quarter, security and quality issues continue to change and evolve. Our data identifies what’s on the rise and what publishers are monitoring and blocking in accordance with their business needs and expectations of their audience. The rate of ads that have audio on startup continue to be a top issue that publishers flag with 92% blocking them from their sites. We are also seeing a large increase of publishers blocking heavy ads (800kbs or higher), Audio on Click, and Audio on Hover. Lastly, Malicious ads remain a fairly concentrated problem, with over 50% of impressions coming from just five providers. 

It’s worth it

There are huge disparities in quality across top SSPs. Thus, it’s imperative that publishers thoroughly vet SSPs prior to integration and monitor them on an ongoing basis. Ad quality issues are often highly concentrated. So, an informed publisher can minimize user-experience issues by avoiding  poorly performing SSPs – often with little impact to monetization.

Advertising | Perspectives | Revenue

Subscriptions v. advertising models: Can they co-exist?

The renewed interest of the subscription revenue model has turned heads in the digital publishing industry. Some publishers have found success in pivoting to this revenue model. However, thousands of other publishers are wondering if subscriptions are realistic options for them. While the ad revenue model has been the historical gold standard, dominance from the major platforms and a lack of transparency across the ecosystem has forced many publishers scrambling. So, is one model really better than the other? Or can these models coexist?

Think about any digital subscription service you are currently paying for, right now. What is the first thing that comes into your mind?  Netflix? HBO? Perhaps, Spotify, or Apple Music?  

If the first thing that springs to mind is a subscription to a digital publication or news site you are one of about 13.2% in the United States, according to Statista’s Global Consumer Survey. Unfortunately, despite consumers willingness to sign up for subscription based content, news has been one of the most difficult areas to monetize. In part, this is because so many people consume it through social media platforms. 

Who will pay for what?

We do see a willingness on the part of audiences to pay for audio and video subscriptions. (Though the jury is still out on how many they’ll pay for in an increasingly crowded market). However, big-name news sites like The New York Times, The Washington Post, The Financial Times, along with just about every other digital publication you can think of wants to shift from advertising based models to reliance on subscript

Of course, some people do pay for digital publication subscriptions. The question is, of course, how many people will pay — and for how many different subscription products. Publication sites, particularly those in the traditional news business, are fighting to compete with each other over who can lock-in the audience segment that is willing and able to pay for content. 

Also, philosophically, the subscription revenue model at scale is essentially splits the internet into two categories: online users who can afford (or are willing to pay for) content, and online users who can’t (or won’t). Certainly there are other concerns about the subscription model. However, the overarching problem is that many users visiting your website cannot or will not pay for a subscription. 

The basics of monetization

Back in the prime-print days, publications would hire a sales team to target relevant companies, wine-and-dine these companies, and sell them advertising space in their paper. Now that publishing has transitioned to digital, direct advertising relationships have been intercepted by ad tech companies and social media platforms. 

These days, programmatic networks and platforms dominate digital advertising. Programmatic advertising removes the relationship factor of ad sales. Instead, exchanges are done electronically, often through the new middlemen of digital advertising: Google, Facebook, and Amazon. They claim ownership of these valuable advertising relationships.

Marketers are retargeting to reach the audience they once found in print publications and reaching them other ways. They believe that they don’t need to advertise in The Wall Street Journal, because they can find Wall Street Journal readers on Facebook. 

Print revenue is declining fast and a great deal of digital advertising is no longer being sold directly by publications. This leaves publishers searching for other methods to monetize their content.

Subscriptions do solve that problem. They allow publishers to directly monetize their audiences again. The model also has fewer middlemen and is a more stable, less-disruptable business.

Some large-scale publications ask readers to pay a monthly fee to view some or any of their content at all. The problem is, few have been able to make that work and many visitors are frustrated when they hit a hard paywall or run out of metered views. And, knowing that we can’t expect readers to subscribe to several sources for similar information, large-scale publications compete against one another for subscription revenue. While some niche publications have been able to create a sustainable subscription model, they still face the issue of subscription fatigue. 

If the consumers won’t pay, who will?

Publishers produce content and need to earn revenue to continue doing so. Readers engage with this content yet many don’t want to pay for it. It’s a dead-end cycle. So, who pays? 

Luckily, advertisers still want readers’ attention just as much as publishers do. And advertisers are willing and able to pay for it. This is a classic win-win-win model. Readers don’t have to pay, publishers get paid to produce content, and advertisers reach desirable audiences. We continue circling back to an ad based model because it is the only revenue model that benefits every party involved. 

The disruption of the ad revenue model in the digital publishing industry has caused great shifts. Publishers cannot continue running a business as they always have. They have to balance consumers desire for free content with the need to monetize it. With major platforms dominating the digital advertising world, the weight lies on publishers and advertisers to work together and explore creative ways to make the ad revenue model work for everyone. 

Transparency will be critical to make things work. As users increasingly become sensitive to privacy and the value of their data, platforms are finally on the back foot. 

Publishers that understand the value of each of their visitors will those ultimately primed to succeed. Recent advances in machine learning and personalization enable new understanding as well as increasingly valuable offerings. This may finally allow us to bring balance back to a historically successful revenue model for both advertisers and publishers.

Industry-Research

Where are the world’s most loyal readers? Hint: It’s not North America

Publishers looking to understand how high reader engagement translates to long-term loyalty in 2019 should look no further than Northern Europe. For consecutive quarters this year, Northern European readers had the highest percentage of loyal pageviews compared to total pageviews, according to data compiled by Chartbeat. (A loyal reader is someone who returns to your site in at least 50% of days in a two-week period.)

We’ve documented how European publishers are experimenting with marketing to highly-engaged readers to take advantage of a short window to convert them to loyal subscribers.

However, the data shows that the Americas create more than enough engaging content that, by all accounts, should translate to higher loyalty figures. For example, readers in Latin America engaged with content for an average of 34.2 seconds, while those in North America engaged for 31 seconds.

What gives? Chartbeat’s second quarter international audience engagement insights indicate it could be emblematic of a broader industry trend: U.S. publishers finding it difficult to leverage strong reader engagement into revenue opportunities. 

More on global reader engagement data and trends from the past quarter below.

Africa and Asia drive mobile, social traffic

Mobile traffic has eclipsed desktop across the world, particularly in Africa*, where 77% of all pageviews are from mobile devices. This is closely followed by the Central Asia and Southeast Asia subregions, with 75% and 74% of pageviews coming from mobile, respectively.

Southeast Asia, Central Asia, and the Middle East made up the greatest share in percent of all pageviews coming from social platforms, driven largely by their high use of Facebook.

By continent, the story remains largely the same as our subregion data. In Asia, 68% of pageviews in Asia come from mobile devices. This is followed by Europe and North America, where it is 61% and 60%, respectively.

Facebook dominates social referrals. The social giant drove over 4.5 billion pageviews for the past quarter. It’s trailed by Twitter, which was responsible for approximately 408 million referrals.

Asia leads referral traffic from search

Central Asia (28%) has the largest percentage of all pageviews coming from search engines, with China (26%) close behind.

Looking at search traffic across all Chartbeat publishers, Google leads by a wide margin at over 10.5 billion referrals this past quarter, according to Chartbeat data.

What this past quarter says about audience engagement

Our global audience engagement data gives publishers a snapshot into broader reader trends that supplement their long-term marketing strategies. Here’s a quick recap of the data:

Europe is loyal. Each of Europe’s subregions tracked by Chartbeat, led by Northern Europe, make up the globe’s most loyal readers. What does this mean? European paid readership models could be one of the first places to look as global publishers attempt to build revenue.

Africa and Asia are mobile (and social). This past quarter reminds us that content consumption via mobile devices is a global trend. Aggregators such as Google Chrome Suggestions and Flipboard are still serving as influential external referral sources. Shore up your mobile experience if you haven’t already done so. The high social referrals in these continents should also prompt publishers to identify regions that are driving social traffic. They should also evaluate whether they’re offering the right content to best engage these audiences.

The Americas are engaged. Readers in Latin America and North America are highly engaged with content. However, they fall on the lower end of the loyalty spectrum compared to the rest of the world. How publishers in the Americas bridge that gap will be key to their goals of unlocking more subscriptions revenue.

*Chartbeat’s dataset in Africa is not broken out by subregion to maintain data integrity
Advertising | Industry-Research

High quality content casts positive halo over ad perception

Over the last decade, behavioral advertising has become the dominant approach to digital media buying. Empowered by sophisticated data-driven targeting technology, advertisers have zeroed in on desirable audiences, tacitly assuming that context is of little relevance. Major adjacency scandals and other brand suitability mishaps have offered empirical evidence against this assumption since 2017.

Furthermore, media and data creation are now increasing at near exponential rates, compounding the challenges surrounding brand safety management. IDC estimates that annual data creation will nearly quadruple from 12ZB to 47ZB between 2015 and 2020. Much of this expansion is driven by a shift in media consumption habits, with the mobile share of time spent with media expected to take over TV at some point in 2019.

Research commissioned by Integral Ad Science (IAS) in partnership with Neuro-Insight, a global leader in neuroscience-based market research, highlights the impact of content over ad perception. Findings from the report showed that high quality sites produced significantly better engagement and memorability compared to low quality sites. More importantly, an ad running next to high quality content was perceived more favorably than when the same ad was viewed in a low-quality site.

The study measured the neurological reaction of participants during a 30-minute mobile experience across four key metrics: favorability, engagement, emotional intensity and long-term memory encoding. Each participant visited eight pre-selected mobile sites evenly split into high- and low-quality as defined by IAS’s proprietary brand risk score. (High quality sites include low brand risk properties and low quality sites include moderate brand risk properties. This excludes explicit adult and violent content.) Three ads from major brands spanning the auto, CPG, financial services, technology and retail industries were embedded into each site.

Quality content drives engagement

Consumers visiting sites deemed as high quality exhibited 20% higher engagement than on low quality sites. In other words, premium publishers were capable of delivering highly involved audiences, primed to engage with relevant advertisements of matching quality levels.

Publishers who offer high quality, engaging content and utilize the necessary verification tools to protect their advertisers’ reputations, stand to gain incremental media budgets over their competitors. Over half of US marketers plan to increase ad spend with partners who have taken steps to protect against brand risk specifically.

Higher quality, higher memorability

Findings from the report also showed that high quality sites produced 30% greater memorability, offering advertisers a more conducive environment for long term memory transfer.

Transference from short term to long term memory is key as it indicates brand breakthrough–i.e., brand recall. Brand recall correlates with decision making and purchase intent, thus increasing the likelihood of conversion among consumers. Wouldn’t your advertiser want to place their dollars against media that drives tangible results?

Same ad, different reaction

High quality content provided an engaging and memorable experience among consumers, thus casting a halo effect that positively influenced ad perception. Findings from the Halo Effect report show consumers perceived an ad seen on high quality sites 74% more favorably compared to the same ad running on low quality sites. Ads running were not only “liked less” when seen in low quality environments, they were actively disliked by the consumer.

You’re already producing high quality, premium content for your audience. Considering eight-in-ten US marketers plan to reduce spend with publishers who do not meet their expectations, it is crucial to make sure you have a clear brand safety strategy in place as well in order to maintain your contextual advantage. 

Head Silhouette Surrounded by Orb Parts
Revenue

Predicting conversion: Mastering the complex variables of user behavior

When a visitor comes to your site: Who’s most likely to take the action you want and who’s not? And what would you do differently if you knew the answer to that question? Because the answers are critical for subscription success.

In my former role at New York magazine, where I spent a decade building the digital media business, I often found myself facing these questions. While we weren’t selling digital subscriptions yet, we knew the value of loyal users. That is, the five to ten percent of users who came back four or five times a month and consumed 40% to 50% of total pageviews. We wanted to entice more people to come back more often.

I knew there were users who converted from new to returning to loyal along a fairly straightforward path, and others who took longer, or a more convoluted journey, to reach that point. And I also knew there were quite often those that never got there at all. If only we could understand those paths and predict audience behavior, I figured, maybe we could do a better job of nurturing users towards loyalty. 

Unfortunately, we didn’t have the tools back then to make those predictions — which meant we had to try to urge everyone down the same path. And since each of those users had different needs and affinities towards the brand, that inevitably meant we lost users along the way that we might have been able to entice if we’d had a better idea of what personalized path was most likely to lead them to come back again and again.

Finding the right formula

Back then, like media executives everywhere, I wished for something that would help my team better understand our audience and their future actions. Was there a magic formula we could apply? 

Fast forward to today and my current role as SVP Strategy at Piano. Piano has spent years trying to find answers to the same questions I had when I was at New York magazine. And what we came up with turned out to be much more complex than anything I ever could have envisioned.

In fact, it’s not a straightforward formula at all. And it’s not one set of behaviors but dozens. Not only that, but the exact combination of behaviors that matters is different on every website. 

Predicting future actions

When Piano launched LT[x] — a machine learning framework that predicts likelihood to act — it opened up a window into the behaviors that matter for conversion, beginning with subscribing. Rather than the simple formula I might have envisioned back at New York magazine, though, the subscription propensity model that emerged from LT[x] (called LTs) tracks 76 different metrics, using machine learning to pull them together and predict conversion actions. 

Before launching, we beta-tested LTs with two customers, and saw exactly the types of results it could achieve. One customer experienced a 20% increase in its paid conversion rate, while the second saw an increase in conversion rate of over 40%. The metrics that mattered — those that predicted who was most likely to subscribe — included the share of visits on desktop, pageviews per visit and the days of the week a user visited. Equally interesting were the metrics that predicted low likelihood to subscribe. If visitors arrived from social media even 20% of the time it drove low subscription likelihood, and if 95% of pageviews were on articles, with little homepage traffic, that also indicated low likelihood. For both of those initial sites, though, the actual weight of each metric varied.

It’s only been since we rolled the model out further, though — across five customers, and eight sites and counting — that we saw just how much difference exists from site to site. The way each metric contributes to likelihood to subscribe is unique to every site we’ve worked on. In some cases, in fact, the same metric can have the opposite effect from one site to the next.

piano subscriptions metric graph

Users are different and so are the metrics

Take one site we’re working with, as an example. There, where visitors are looking at the site plays a central role in their likelihood to subscribe. Since it’s a regional newspaper, that’s not surprising — the most active users are local. For other sites, a particular metro area may have little significance, but national boundaries still tend to matter — with users in a site’s home country generally having higher subscription likelihood.

There are some behaviors that pop up again and again. For the same newspaper client, the more unique sections and authors users read also contribute to that same site’s high likelihood to subscribe rates — also easy to understand for a newspaper with a diverse range of writers and content types. The more a user is engaged across the board, the more likely they are to become loyal and subscribe. This breadth of engagement is almost always a strong positive signal. 

Meanwhile, for other customers, it’s engagement metrics like number of active days or number of paid offers viewed or the share of pageviews from recirculation that are top predictors. For clients with very high value content where visitors are quick to convert, it may be whether a visitor is coming from desktop or mobile that has the biggest impact, with the typical high engagement metrics having a smaller impact.

All of that means there is no one magic metric for the industry to focus on across the board. The good news is that, with the spread of AI-enabled technologies, understanding and harnessing this information is becoming possible for the first time.

Customizing the experience 

So, what does this mean for the media providers trying to use those predictions to customize their user experiences? 

Once the metrics that matter are determined for each site, companies can start to use the predictive powers of the algorithm to personalize the cues they put in front of a particular user and the path they take to lead them to convert. That could mean putting a subscription offer in front of those most likely to subscribe, for instance, but a registration offer in front of those less likely to. Or it might mean changing the meter height based on whether a user is more or less likely to subscribe.

And for users, that personalization matters just as much as it does for the companies that provide it. Customers expect one-to-one personal experiences. It’s what they wanted when I was still in media, and even more so it’s what they’re looking for today.

About the author

Michael Silberman, SVP Strategy, leads Piano’s Strategic Services team, helping clients develop reader revenue strategies and drive success and revenue on the Piano platform. He joined Piano in 2018 after 10 years building the digital media business at New York magazine, and earlier, as one of the top editors launching and growing MSNBC.com in the early days of the consumer Internet.

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