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Advertising | Supporter Spotlight

Why publishers see success in direct-sold programmatic

Advertisers that solely opt to access publisher inventory through the open marketplace (OMP) face significant addressability problems. While the OMP completely changed the way media owners and advertisers collaborated, becoming the “path to least resistance” for both buyers and sellers, it is now creating more resistance. But as with so many things in life, what’s old is new again and direct-sold strategies are delivering benefits to publishers once again.

Open programmatic no longer serves its purpose

Even with Chrome’s third-party cookies still in play, only 30% of audiences on the open web are targetable. This is because 40% of Chrome’s users make their data unavailable to advertisers and the Firefox and Safari browsers already operate without third-party cookies.

Open web addressability is a big problem: Why would advertisers want to use the majority of their ad spend to reach 30% of audiences? There is also no guarantee of premium inventory and placements as well as a lack of control and transparency in the OMP as a result of ad fraud and third-party targeting that doesn’t deliver on the audience advertisers are trying to reach.

In light of this, publishers are re-evaluating their strategies. For example, one parent and lifestyle publisher made the proactive decision to reduce their reliance on the OMP, not just because it isn’t a reliable source of revenue, but because they can’t control their narrative with buyers in that environment. Working with advertisers directly means they get to highlight non-endemic audiences at a scale they can achieve.

Publishers need to make revenue and ensure they are giving their audience the best possible experience, while advertisers only want to reach the most relevant people within this audience. The lack of addressability in the OMP leads to failure on both fronts.

The building blocks of going direct

Between October and November 2022, the IAB surveyed 223 buy-side ad investment decision-makers and found that 53% planned to increase their focus on ad placements with publishers using first-party data. According to a report by Adweek, brands like Hershey’s, which spend between $350M- 450M annually on advertising, realise they are spending a lot of money and not showing up in premium environments. Hershey’s now has a target of buying 80% of addressable media via private marketplaces (PMPs) and only 20% on the OMP.

Publishers’ first-party datasets—built on authenticated, contextual, declared, and behavioural data—can be leveraged by advertisers directly to activate unreachable audiences. But for this shift to work, publishers must continue encouraging buyers to see the benefits of working directly with them and perhaps even educate an entire population of buyers that have worked primarily with OMP.

To do this, publishers need to satisfy advertiser demand by providing quality audiences from interest, intent, and in-market audiences, provide scale and ensure reach across all relevant platforms and browsers, tell rich and compelling stories about their audiences via deep insights, showcase how audiences are built and be transparent about audience creation, and demonstrate how their first party audiences can help deliver and improve performance mid-flight and achieve advertiser objectives.

Reaping the benefits

Publishers already working this way benefit from using their first-party data to drive direct deals, and buyers are seeing an improved performance. Trusted Media Brands (TMB), whose titles include FailArmy, Family Handyman, Reader’s Digest, and Taste of Home, have been working on their data strategy to ensure they can understand audiences across all browsers, especially in cookie-blocked environments such as Safari.

TMB now delivers direct-sold campaigns 94% of the time using first-party data. The work has resulted in a 140% increase in revenue from deals using first-party data, a 31% increase in RFP win rate when data is on an IO and a 2X increase in deal size when data is present on an IO vs no data.

Similarly, Gumtree is seeing results from using first-party data in direct deals, with a 36% increase in click-through rates in Q1 2023, and a 14% increase in average cost per thousand impressions.

The driving force behind addressability

The best way for publishers and advertisers to maximize their revenue and budgets, respectively, is to focus on addressability. First-party data and direct-sold will be the driving force behind that.

Direct deals deliver quality first-party data and scalable first-party audiences that meet advertisers’ needs, increase transparency, and control, and enable access to premium inventory and ad placements. Working direct also results in insights and reporting into audiences on how they inform an advertiser’s targeting strategy. Advertisers know where their ad spend is going and which audiences they are reaching with more accuracy.

Diversity, Equity & Inclusion | Industry-Research | Supporter Spotlight

Growing audiences–and your media business–through diversity

Is our organization serving the right audiences to expand the reach and impact of our journalism? Are we fulfilling our social mission to inform the public and represent the variety of viewpoints of our society? Are we relying too heavily on one type of reader to sustain us financially in the future?

Those are some of the questions that dominated the discussions over the course of FT Strategies and Google News Initiative’s Audience Diversity Academy. In this inaugural six-month programme, six publishers across Europe came together to better understand and address the needs and behaviors of younger and women audiences. This article summarizes our approach and subsequent report, Seizing the diversity opportunity: enabling growth in the news business.  Here, I will focus on strategic guidance, and you can read the full report for  case studies, practical experiments and more.

Why should I care, you ask? 

Besides being preoccupied with questions similar to our participants’, the social turmoil that rippled from societal uprisings across newsrooms in the U.S. continues to cause further pressure. Heavily influenced by uprisings following the #MeToo movement and murder of George Floyd, America’s media organizations are reckoning with the lack of diversity internally and in their coverage. There’s significant room for improvement to be sure: for example just one woman’s voice exists to every 1.7 male voice in stories and the 21% of women of color in the population is reflected by just 3% of editors in politics. 

For the skeptics out there, addressing such organizational and coverage disparities can lead to commercial upsides, among other things. Growing diverse audiences and ensuring a more diverse organization can help your company respond to changing consumer behaviors and economic headwinds. It can also help organizations proactively gain a foothold in the increasingly aggressive battle for talent.

So how can I seize the opportunity of audience diversity?

Our framework below was crucial to building an audience diversity strategy for the participants:

Start with a clear case and diversity goal, backed up by leadership

There are many aspects to consider when baking audience diversity into your strategy. However, a few influential leaders working with a group of highly engaged employees, who strongly identify with the mission, is a great place to start. This means ensuring enough traction at the top to prioritize audience diversity and communicate across the business, while the grassroots can generate practical ideas and excite colleagues. The publishers who moved ahead quicker are those who created a clear goal with hypotheses to test, measuring their progress with defined metrics.

Create regular, authentic mechanisms to listen to your audience and act on their feedback

Journalism is no longer a monologue; the more you invite the underrepresented segments to be part of a conversation, the more heard they feel and the better you understand their needs. Go beyond ad-hoc feedback such as with regular initiatives to collect qualitative and quantitative information such as interviews, surveys, newsroom tours, video calls, website analytics. Make sure you can include audience suggestions on the content and product in your strategic activities in order to create a more diverse proposition. At the FT we have an Audience Engagement team that advocates for high quality, diverse readers.

Sustain the effort to connect to an audience with content for them, experienced in ways that suit their needs

While it is important to avoid negative media stereotyping, underrepresented segments should have access to authentic, equitable and representative content. Having the data in the newsroom to track coverage across communities, how they engage with the stories and the amount of voices, images and sources included can shine light on the limitations of existing content and encourage more diverse commissioning decisions. 

This partly lies with the newsroom. But marketing, product and data should work in cross-departmental teams to ensure there is a variety of tactics to acquire and retain audiences. For example, we found that women are often confined by time, so offering them alternative methods of consumption, such as audio or newsletters, strengthens their engagement with the product.

Reflect the society you serve in your organizational make-up–but look beyond hiring

It is challenging to create a diverse product without a diverse employee base to weave their ideas in stories, design, production and delivery. However, we found that publishers look at their employee data split by (e.g.) gender and tend to conclude they are 50:50. Certainly, you should recognize this achievement. However, it is also critical to examine how employees from minority groups feel at the workplace, how many progress upwards, and what their tenure is, in order to measure your ability to both acquire and empower talent. We experimented with a group of women writing on rotation a newsletter on topics that matter for women. The results showed better individual recognition and a higher uptake of the newsletter by women readers.

I want to note that we cannot reduce diversity to simply age and gender, and diversity is the first step in a long journey towards a more inclusive and equitable audience and organization. However, for the purpose of the programme, we focused on age and gender to make our efforts most impactful. We believe that the approach and the learnings are applicable to other diversity aspects.

Diversity is not simply about representation in the newsroom, or in the content we produce. It serves our readers by better reflecting society. And it serves our business by attracting a broad talent pool, and better meeting the expectations of our audiences. 

About the author

Rumyana is a manager at FT Strategies, and has worked with large media & publishing companies across Europe. She led FT the Google News Initiative Audience diversity programme, and also has experience in content strategy and engagement tactics. She was recently part of the Financial Times’ Audience Engagement team supporting their audience diversity initiatives. Prior to joining the FT, Rumyana was a consultant at KPMG.

Perspectives | Supporter Spotlight

How publishers can make the most of TikTok

For the past few years, TikTok has been the platform at the cutting edge of social media, with a rapidly growing, young cohort of users. It is also the place nearly 1 in 7 people in the 18 to 24 age group turn to for news.

Media companies like ABC News and the Washington Post have developed a strong following on the platform. And BBC News has seen a 2000% increase in followers in the last nine months. 

Reuters Institute reports that 49% of leading news publishers worldwide now regularly post to TikTok and the number of publishers committing to the platform continues to climb. Echobox’s latest Publishing Trends Survey found that 59% of publishers believed TikTok would be more important to them this year compared to 2022 — a jump of 39% in the last year. 

These developments, however, are taking place against the backdrop of growing regulatory pressure on TikTok’s parent company ByteDance. It is conceivable that the world’s fastest growing social media app could soon be banned in the U.S. Why, then, are so many news organizations choosing to invest in a platform whose future is shrouded in uncertainty?

Why invest in a platform with an uncertain future?

1. The short term gain justifies the investment

The simplest answer is that whatever happens to TikTok in the future is less important than the benefit to be gained from using the platform now. When we asked publishers which activities would be more important to them this year, 47% of respondents to our survey answered growing social followers and engagement. Publishers are going where the audiences are, with the hope that readers exposed to their content will either follow them on other social platforms or sign up for newsletters or other subscription products in the event that TikTok becomes unviable.

2. All social media is becoming like TikTok

In the long term, the continued investment in TikTok is an indication of the new realities of social media as a whole. Quite simply, TikTok has changed the game.

In the last couple of years, Facebook, Instagram, and YouTube have all sharpened their focus on TikTok, looking to ape its distinctive allure. The calculus here is that even if the platform was to be banned, the innovations that it pioneered, such as short-form vertical format video, will remain alive and well on other platforms.

Meta’s cross-platform Reels as well as YouTube Shorts have experienced impressive performance stats. Meta announced during its Q1 2023 earnings call that Reels was responsible for a 24% increase in time spent on the platform. 

Investments made into acquiring the skills and technology to produce content on TikTok can therefore be put to productive use on other platforms where short-form vertical videos have been incorporated. 

The results of our publisher survey reinforce this. For 47% of publishers, creating video will be more important this year than last.

The time is right

In the here and now, how can publishers take advantage of TikTok’s popularity and increase the potential virality of their content?

The most fundamental difference between TikTok and Facebook is the nature of its “recommender algorithms” that determine what content is served up to a given user. Instead of relying on who you follow to determine what content you should see, per Facebook’s model, TikTok relies purely on opaque algorithms to serve up content without a user having to follow anyone; the single imperative on TikTok is to watch. 

This removes a barrier to publishers who want to increase their exposure on the platform. Not having the potential visibility of content circumscribed by follower numbers means that, theoretically, it’s easier for any publisher to produce highly-viewed, or even viral content.

Timing is everything

Achieving high performance on TikTok is all a matter of timing.

The process by which TikTok promotes content is simple: it shows content to a small sample of users in its For You feed. Then, if engagement and watch time is high, the video gets promoted to a larger group and so on. Posting video at a time in which a high number of engaged users are active means that the potential for virality is immediately increased. 

Utilizing AI-powered social media management tools to optimize post timings is therefore a simple and cost-effective way to increase visibility. The fact that a publisher’s TikTok follower count has virtually no bearing on which content is promoted allows greater opportunities for AI systems to maximize the potential visibility of a video and help its performance snowball.

The future of TikTok remains uncertain, but the platform is rich in immediate benefits. With over a billion (predominantly young) users, publishers have the opportunity to meet new audiences where they are congregating. With a combination of AI smarts and a forward-looking strategy, publishers can become trusted and indispensable news sources with or without TikTok.

About the author

Ashley Kibler is the Marketing Director at Echobox, the leading solution for publishing automation used by over 2,000 publishers and media groups worldwide to automate and optimize content curation and distribution.

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Advertising | Innovation | Supporter Spotlight

Afraid of AI? Start with ad optimization

There is perhaps no greater trend in the tech world right now than artificial intelligence (AI). Specifically, generative AI, which can produce content based on prompts, is garnering a lot of attention from – and even causing fear within – media companies.

Generative AI makes content creation far easier, so media companies likely feel that they have to dive head-first into a future of AI-generated articles and TV shows.

The truth is that there is a far easier, even safer way for the media industry to dip its toes into the AI waters and prove out that it’s a worthwhile investment. The best place to start is with using AI to optimize advertising across media, whether that’s a website, an app, a CTV channel, streaming platform, or linear TV network.

A quick start with AI

It’s not breaking news that media companies need to adapt to remain competitive and constantly find new ways to create efficiencies and cut costs while remaining adaptable to industry trends. AI is getting attention because it promises to be an incredibly effective way for media companies to accomplish these goals.

Ad optimization is probably the easiest, fastest way to a return on your AI investment, largely because there are so many different ways that AI can be applied to the advertising process. These are just a few of the use cases for AI across a media business.

Personalization

When machine learning algorithms analyze user behavior and preferences, they can determine the ideal ad placement based on factors such as user demographics, interests, and browsing history. This personalization can lead to higher click-through rates and conversions for inventory, which allows a media company to charge a higher price and therefore drive more revenue. Similar models can be used for ad supported TV and CTV to optimize pod placement of advertisements in a TV show.

These same data signals can also fuel content recommendations, giving your audience a customized experience and driving longer interactions with a media brand.

Flexibility

Another application of AI is to track and analyze ad engagement. Ads that draw more interest from consumers are likely to perform better. Armed with this knowledge, media companies can adjust ad placement and content in real-time for maximum impact.

Insights

AI can analyze user-generated content, such as comments and reviews, to better understand user sentiment. This provides intel on whether ad placements need to be tailored to improve a negative experience.

Automation

AI’s greatest strength is automation, which can dramatically reduce the amount of time media companies spend running A/B tests on their ad formats and placements. Using AI, a company can run tests quickly and efficiently, helping determine the most effective strategy for their platforms. The ad creative itself can also go through a model to determine which ads will resonate with certain audiences.

Each of these use cases should excite media companies that are looking to increase efficiency and drive greater revenue. But the question still remains – where, exactly, should a company start? There are two key steps every operation should take.

1. Prioritize data collection

There’s an old saying, “garbage in, garbage out.” Even the most advanced AI is only successful when data is accurate and viable. In fact, we’re seeing hot consumer-facing AI products come under scrutiny because they generate inaccurate answers.

The first step any media company should take to effectively implement AI is to collect data on its audience. Most media companies already have this intelligence in spades, so the step becomes gathering it together in a usable fashion. Often, data can be siloed across different groups. It’s important to get buy-in across the company on any AI initiatives, so that the models have access to as much data as possible.

For most media companies, this data is generated by the users themselves, in the form of activity across the media properties, subscription sign ups, and ad interactions. This good, clean data provides insights into the types of ads audiences respond to, what times they’re most receptive to seeing an ad, and how they choose to react.

2. Select and apply algorithms

Armed with information about the audience, the next step is to use it. This is where media companies need to roll up their sleeves and better understand AI and Machine Learning. There are many different types of algorithms that can be used for ad optimization purposes, and media enterprises need to select the model that works best for their business and their goals.

These algorithms utilize historical data from previous campaigns as well as current campaign performance metrics in order to predict future performance based on similar past conditions. They learn over time, so with more data and time the models become more accurate at predicting future outcomes. Of course, most media companies don’t have the resources to build a model that specifically adheres to their business goals. Outsourcing teams to build models can further speed up adoption.

Again, AI for making content is getting all of the headlines, and it’s certainly valuable, but that’s not the place to start for most media companies. Ad optimization is an easy way to get started, and an easier way to start driving revenue and justify the costs of outsourcing algorithm development and technological updates. Now is the time to get on board. The next best time was yesterday.

Advertising | Revenue | Supporter Spotlight

Pathway to driving incremental branded content revenue

In a previous post, we predicted that there would be a rapid expansion of brand content with the adoption of generative AI and discussed how publishers can utilize this adoption to fuel growth. I wanted to expand on some strategies publishers can implement to start the conversations with brands and agencies about using the content they have already invested in to drive brand consideration.

Publishers can leverage a brand’s non-promotional content and powerful storytelling to drive new and incremental revenue. Consumers across different mediums are actively engaged with long-form content, increasing brand recognition. Here’s a pathway for publishers that want to help brands use content in order to optimize the revenue potential for their businesses.

Content: A vehicle for influence

Before we jump into the strategies, why should you care about prospecting with content? Here are some numbers to help convince you that consumers rely on content to make purchase decisions:

  • According to Content Science, 70% of consumers prefer to learn about products and services through content rather than traditional advertising.
  • According to Nielsen, the average time spent on sponsored content is two minutes and thirty seconds. That’s roughly the same as purely editorial content.

In today’s digital age, consumers are inundated with display and video advertisements. But when it comes to product and service information, branded and sponsored content takes a backseat to these traditional digital formats. The data suggests that consumers are looking for authentic and informative content they can engage with rather than being sold to. 

Long-form branded content allows brands to tell their story, provide helpful product and category information, and ultimately guide consumers to make an informed purchase decision on their terms. As a result, companies are changing their marketing strategies to focus on creating content that informs consumers throughout the purchase journey. And publishers are the ideal partner to repurpose, optimize, and scale a brand’s content to connect with a brand’s audience.

Content sells itself

Content marketing has proven to be a game-changer; according to HubSpot, 70% of marketers are actively investing in it. Still, only a few industry partners offer solutions to scale this content outside the brand’s owned channels. The increase in investment in content marketing reflects the fact that marketers not only build trust by providing valuable and informative content but that it also positions them – and the brands they represent – as industry leaders. 

Tested tactics to drive revenue 

Repurposing content opens up a unique opportunity to create impactful prospecting strategies. One tested method is to pull content from brand marketing channels and create proactive mocks that showcase their content on a publisher’s site. 

The best outreaches we have seen involve a multi-touch approach to showcase brands’ content within a publisher’s environment, utilizing content sourced from Facebook, Instagram, blogs, ebooks, whitepapers, transcribed videos, and podcasts. These mocks can be used for prospecting new business or encouraging existing clients to invest in incremental budgets. This outreach allows brands to see how their content can be repurposed for maximum engagement.

Pro tip: streamline the process

The most impactful way to showcase the power of a brand’s content presented in the context of your site is to show marketers what that would look like. Most methods require publishers to do that directly from their CMS requiring development and design resources to create a mockup without actually pushing it live. Alternatively, publishers can use native ad servers to do this work. This way, publishers can upload the creative and content, and generate a preview link. Some platforms include content ingestion tools, which will help streamline this process further. The link can then be shared directly with the client or included as a screenshot in slides.

An alternative method would be to build a mock template in PowerPoint or another design software and copy content into the template. The problem with this method is it requires the manual and time consuming process of finding the content, pasting it into your template, and making design adjustments.

In conclusion

Content is emerging as a critical driver of influence in today’s digital world. Writing content and promoting it on different platforms builds trust and creates an authentic relationship with consumers. But creating quality content is a major investment. Taking the time to repurpose that content and automate the process correctly can help publishers partner with brands so that they can more readily scale their content and drive brand consideration. 

Perspectives | Revenue | Supporter Spotlight

Friend or foe: is AI the latest big tech assault on media revenues?

Every once in a while, a trend rippling through the digital media industry that springs up from the trade publications and into general-interest media. The launch of ChatGPT has been one of those times. AI content generation feels like more than ones and zeroes to media consumers at large. It feels tangible, even visceral, because it has direct ramifications on the production of content itself. Clearly media leaders need to make their voices heard in order to help guide the conversation for users as well as AI developers.

It would appear every Big Tech business wants in on AI chat to power search. But like identity and privacy, media companies are not about to sit back and watch which of the tech giants “wins” generative AI. They need to understand how AI will change content consumption, how they can use it to their advantage, and how to keep walled gardens from absorbing more of their revenue.

A new era for the search business

We’re seeing real and atypical disruption today in AI chat’s applications for search. Bing’s ChatGPT search function removes the onus of poring over multiple search results, and simply generates what feels like a coherent response upfront – be it right or wrong, strong or flimsy, fair, or biased. And history shows that human nature tends to prefer convenience over perfection. Search providers are already investigating how AI search may be monetized, to avoid losing out on the serious revenue search advertising traditionally has delivered (58% of Alphabet’s total revenue last year, for those keeping score).

That brings us to media companies’ reliance on search traffic to monetize their own sites and content. The prospect of users being disincentivized from visiting publisher sites to verify and provide context for information looks ominous to publishers. Today, 26% of all publisher traffic comes from search, in an environment where open web publishers are already competing against walled gardens for traffic and advertisers are reducing their budgets. And as it stands, not all AI search tools link back to their sources, and marketers are still trying to understand how the AI search ad experience should appear. And while search bots already crawl publisher pages, AI chatbots present a less balanced exchange between publisher and search engine.

Publishers that control their data have an advantage

Let’s avoid tunnel vision here, though. Publishers’ imperative to soften any blow to revenue from search traffic overlaps with their existing efforts to reduce reliance on revenue from the programmatic open market. Those efforts involve building loyalty among users and advertisers alike. For users, publishers are offering subscription packages, exclusive newsletter content, and the like. For advertisers, they’re offering private marketplaces and direct deals. Publishers can better navigate AI disruption by continuing and evolving those business strategies. They need to position themselves as sources of trustworthy, high-quality content worthy of the lifetime audience loyalty that can grow CPMs and incentivize deeper advertiser relationships. And AI has real benefits for those strategies.

If and when search becomes a less reliable source of traffic for media companies, they’ll need to ramp up efforts in driving traffic from channels such as social and video. In finding the best channels and business partners, they can turn to AI to analyze large volumes of first- and second-party data, and to do lookalike modelling. Leading publishers have already been doing this as part of their data strategy for withstanding third-party cookie deprecation. Advertisers are taking bold data strategy steps, too, and have the resources to be very advanced here. Publishers should compare notes with their brand partners to learn how to best leverage AI and machine learning for predictive audience creation, modelling, data cleaning and processing, and probabilistic matching.

We’re also seeing publishers take interest in generative AI’s capacity to accelerate and personalize content production, with human staff overseeing and completing the job. AI can do some of the lifting on lower-level SEO writing, bolster production of sponsored content, and source background from the publisher’s content archives. With ad revenues dipping on account of economic pressure, publishers are actively seeking new workflow efficiencies and content initiatives simultaneously without cutting headcount.

IP law will establish new limits for AI crawling

While we’ve all heard chatter about AI displacing human creative talent, media companies have more leverage than they might appear from a slight distance. That human-created input that drives AI output is guarded by intellectual property law. Rights holders are pushing back, and we can expect to see more robust IP regulation, and even technology that protects content from being scraped by AI tools, coming into play in the near future.

Publisher trade body The News/Media Alliance intends to pursue Big Tech companies for IP infringement, and its members want generative AI providers to agree to pay to licence their content (there’s a precedent for such licensing terms, from the use of text snippets in traditional search results). It’s questionable whether scraping publisher sites to train AI would ever fall under “fair use.”

But publishers shouldn’t simply wait for regulators to clear up these issues. That’s a path with unpredictable length and outcomes. At the top of publishers’ to-do lists should be bracing for shortfalls in search traffic, powering their data resources, and finding applications for AI to embolden content production. And Big Tech businesses should be forewarned: AI can’t be a higher priority than the sustainability of the digital publishing business that generative AI models depend on. An input of quality content makes the difference between useful output and unappealing nonsense.

Advertising | Supporter Spotlight | Video

Do advertisers fully understand the impact of streaming video?

Streaming video has seen explosive growth and isn’t yet showing any signs of slowing down. As audience habits change and evolve, are advertisers and media platforms prepared to take full advantage of the new paradigm? Whether it’s the shift from third to first-party data or ad formats designed uniquely for the streaming experience, there are plenty of cutting-edge trends and technologies that advertisers would do well to understand – and embrace.

Streaming audiences are booming

One of the biggest trends in streaming video is the rise of streaming-first networks. These networks, such as Netflix, Hulu, and Amazon Prime, often produce their own content and offer it exclusively on their streaming platforms. This model has proven to be successful, with many streaming-first networks producing critically acclaimed shows and movies that have gained a loyal following.

According to recent data, at least 85% of US households are subscribed to at least one video streaming service. The popularity of streaming-first networks has disrupted the traditional TV model, which relies on ad-supported cable and satellite networks. As more people switch to streaming platforms, advertisers are having to adapt to the new landscape and find ways to reach their audiences through these platforms.

Netflix, the world’s leading streaming service, for a long time publicly opposed advertising and relied on a subscription-only model. However, in 2022, CEO Reed Hastings announced that the company was opening the door to advertising, signaling a sea change. Hastings cited the success of Hulu and others in monetizing their streaming platforms through advertising. And, to back this up, a survey by MAGNA found that in 2021, U.S, linear TV ad spend is projected to decrease by 7.5%, while connected TV ad spend is projected to increase by 36.5%.

Self-serve advertising: targeted and brand-safe

Many streaming platforms, including Roku and Hulu, offer self-serve advertising options that allow brands to create and target their own ad campaigns. This gives advertisers more control over their campaigns and allows them to reach specific audiences in a brand-safe way. Self-serve is considered an effective compromise between the requirements of brand safety and scale; a system that is both automated and tightly controlled by the publisher.

Through self-serve advertising, brands can choose the ad format, ad placement, and target audience based on first-party data. Advertisers can also set their own budget and optimize their campaigns based on real-time performance data. Self-serve advertising platforms are built on the availability of first-party audience data.

First-party data: the key to targeting and personalization

Another trend in streaming video is the use of first-party data. Streaming platforms collect data on their users – including what they watch, when they watch it, and on what device. This data can be used to create more targeted and personalized ad campaigns. For example, if a streaming platform knows that a particular user is a fan of action movies, it can serve them ads for action movies or related products.

First-party data can also help advertisers understand their target audience better. By analyzing user behavior and preferences, advertisers can gain insights into what types of ads are most effective and adjust their campaigns accordingly. For example, if data shows that users are more likely to engage with ads that feature humor, advertisers can create ads that use humor to capture the viewer’s attention.

Trust builds strong relationships

In addition to self-serve advertising and first-party data, it’s important for advertisers to consider the relationship between viewers, streaming brands, and trusted advertisers. As streaming platforms have become more popular, they have also become an important source of trust for many viewers. This means that advertisers who partner with trusted streaming brands and create ads that align with their values and aesthetics are more likely to be successful.

Brands that are perceived as intrusive or irrelevant can quickly lose viewers’ trust and negatively impact the reputation of the streaming platform. To build and maintain trust with viewers, advertisers must focus on creating compelling, authentic, and relevant ad content that resonates with their audience.

One way to achieve this is through sponsored content. Streaming platforms increasingly offer sponsored content as a way for brands to reach audiences in a non-intrusive way. Sponsored content can take the form of branded entertainment, product placement, or native advertising. By partnering with streaming platforms and creating sponsored content that aligns with the platform’s values and aesthetics, advertisers can reach audiences in a more organic and engaging way.

Another important factor in building trust is transparency. Advertisers must be transparent about how they collect and use data, as well as how they target and deliver ads. By being transparent, advertisers can build trust with viewers and create a more positive advertising experience.

Connecting the dots with CTV

In addition to these trends, another important factor for advertisers to consider is the growing importance of connected TV (CTV). CTV refers to televisions that are connected to the internet, allowing viewers to access streaming content directly on their TVs. Already, a full 80% of U.S. households have access to a connected TV. With CTV viewership on the rise, advertisers have the opportunity to reach audiences on a larger screen and create more immersive and engaging ad experiences. Advertisers can also use CTV to target specific households and individuals, based on first-party data and other targeting methods.

As the streaming video and CTV landscape continues to evolve, advertisers must navigate new challenges, such as ad fraud. Ad fraud refers to the practice of generating false ad impressions or clicks to defraud advertisers. Advertisers can work with media platforms and ad tech partners to implement fraud prevention measures and ensure their ad spend is used effectively.

Closing thoughts

One simple saying appropriately describes the advertising impact of streaming video: the medium is the message. Streaming video isn’t just linear in a new, on-demand format. It’s a fundamental shift in the way that viewers experience media, create relationships with brands, and ultimately make decisions as consumers. There are a host of new challenges and opportunities, all of which will impact advertisers now and in the future.

The best way for advertisers and publishers to adapt to streaming video is to embrace it. And it will help to seek out expert partners to help navigate these new waters. In many ways, we will need to forget what we think we know about video media and open our minds to a new and exciting reality that is more audience-focused, personalized, and fast-changing than ever before.

Advertising | Research | Supporter Spotlight | Video

5 Ad trends to know for Upfront and Newfront season

The largest TV networks and media companies are busy presenting their upcoming programming and ad inventory for the year ahead. A large portion of advertising budgets are typically allocated to TV advertising, so advertising shifts among top brands will impact the whole marketplace. In this article, we’ll explore some of the latest advertising trends and insights to keep in mind during the Upfronts, NewFronts, and beyond.

1. Digital takes the top spot

In 2022, nearly $144 billion was invested in digital, print and TV advertising. While TV still makes up 41% of total ad spend, digital was the top ranking format making up 47% of all buys. Over $68 billion was allocated to digital formats. These formats include display, online video, native, and paid social among other formats. This marks an opportunity for continued growth in digital media sales. 

2. Top categories investing in TV are also top buyers of digital 

Four out of the top five categories buying TV ads are top digital buyers as well. Not surprisingly big spenders from finance, media & entertainment, retail, and tech brands drive digital ad sales.  TV investment for these, with the exception of media and entertainment, is down YoY. 

However, each of these categories are up YoY in digital ad sales. Their combined digital investment still exceeds $36.6 billion and made up 53% of all digital spend. This represents a shift in the market towards digital advertising among top segments.

3. Few advertisers entering the market bought national TV spots

Only 1% of advertisers entering the market bought national TV spots. Despite looming recession concerns, MediaRadar observed 52k new advertisers (nearly 80k brands) entered the market in the second half of 2022. Not all of these advertisers purchased TV spots (530), but over 36k invested in digital display, video advertising and other digital formats. 

4. Online video advertising is up 

Online video advertising is increasingly more important to advertisers as it rose 86% YoY. A study by Hubspot says, “91% of marketers surveyed say they find video important to their advertising mix and 92% of them say online video produces a high ROI.” These feelings are likely contributing to the continued growth of video ad sales across media formats. 

MediaRadar observed 31.1k advertisers spend an estimated $28.2b in video advertising during 2022.  Top three categories advertised via online video during 2022: software ($1.9 billion), pharma ($1.4 billion), and film promotion ($1.4 billion). Combined spend nearly reached $4.8 billion, this is only 17% of total online video spend.

5. OTT investments increased despite concerns 

Just a few years ago, new OTT streaming platforms were being launched regularly and consumers were anxious to embrace them. Now, platforms struggle to match growth of 2021 and prior. To overcome challenges groups, like Disney+ and Netflix, have introduced ad supported versions at a reduced cost to mixed reviews. Despite the challenges, 5.7k brands increased their investment in streaming platforms YoY. Together their buys were nearly $1.3 billion. Most notably LinkedIn, eHarmony, Kohl’s, and Febreeze contributed to this YoY increase. 

While the Upfronts and Newfronts are an increasingly important time for large networks and media conglomerates, it is also an important time for all media sellers to understand the shifting marketplace and carve their niche into the new year. There is much opportunity to capitalize on the changing advertising landscape and continued digital growth. 

Advertising | Supporter Spotlight

How publishers can reclaim their audience relationships

Today’s advertising experience can feel like a daily exercise in pain and frustration as users navigate bizarre offers and deceptive ads promoted by shady advertisers.

The digital media industry faces mounting obstacles in building audience trust, largely stemming from deceptive and intrusive ad experiences. For media professionals, trust isn’t just another buzzword – it holds tangible monetary value. To regain trust and prevent any further damage, publishers must weed out deceptive ad experiences that threaten their readership. 

Dangers of false advertising in the digital age

According to GeoEdge research, misleading product offers and financial scams have become the primary tools for fraud. Publishers’ sites have been saturated with clickbait ads in recent months. 

In 2023, one in every 170 ad impressions in the U.S. contains a malicious ad. Due to daily run-ins with these ads, audiences approach digital ads – and content – with a healthy dose of skepticism. Frustrated readers who become annoyed with bad ads leave the site and seek out alternatives, which can spell disaster for publisher monetization. The fallout includes reduced engagement rates, fewer click-throughs on ads, and ultimately, diminished ad revenue. Additionally, the reputational damage may lead to declines in traffic over time.

What digital media gets wrong

The media industry started building a house by installing the latest and greatest programmatic technology, only to realize they forgot to lay a sturdy foundation of audience experience. Since then, advertising has become increasingly bizarre and dangerous as programmatic pipelines are susceptible to nonexistent products, counterfeit goods, and unrecognizable gadgets. 

Navigating ad experiences is a hurdle for many publishers. What does digital media get wrong?

  • Passing the responsibility of ad quality to upstream partners.
  • Treating the ad experience as separate from the user experience.
  • Failing to utilize technology to identify and remove misleading or clickbait ads.

So, the big question is: Who bears the blame for lousy ads and shoulders the responsibility for eliminating them?

How digital media can course correct  

Publishers must acknowledge that ad experience and user experience are intertwined, with one influencing the other. A negative ad experience can detract from the value of content, or prevent audiences from ever reaching publishers actual product: their content. 

Despite the high stakes involved, digital media professionals tend to shift the responsibility of ad quality onto Ad Tech partners up the chain, leading to a false sense of security. Relying solely on upstream partners to weed out harmful ads is wishful thinking. Publishers cannot depend on tech giants as gatekeepers for ad quality since they are often the same culprits responsible for delivering them.

GeoEdge analyzed ad quality ranking and malicious ad trends over the last 90 days by tracking impressions from the top nine global SSPs. The results revealed that 87% of all scam ads originated from just two SSPs. Yes, Google was one of them.  

Luckily, publishers aren’t in an unwinnable programmatic trench war. Implementing publisher-centric ad quality control allows them to prevent misleading ads from appearing on their sites. By filtering out clickbait ads, publishers can protect their audience from ad scams involving fake products or questionable cryptocurrency schemes.

The Journey of Responsibility 

The junk ad epidemic undermines the entire digital media industry, posing a significant threat to its sustainability. If digital media professionals continue to ignore the impact of clickbait ads, they risk driving away audiences and losing their credibility in the process. By implementing technology that prioritizes user protection and experience, publishers can regain control over the audience relationships. 

Failure to take action can trigger a chain reaction, starting with a decrease in ad clicks, followed by reduced engagement, eroded trust in content, and ultimately, far-reaching negative consequences for the wider ad supported media industry. 

The ads appearing on trusted sites must offer a guaranteed, risk-free experience. Publishers’ ad quality values must demonstrate that the customer’s content experience, which includes advertising, is their highest priority.

Advertising | Supporter Spotlight

How publishers can defend ad revenue from the threat of invalid traffic

In recent years, various fraudulent advertising schemes have resulted in significant financial losses for publishers and advertisers. The digital advertising sector alone suffered a staggering loss of $65 billion in 2021 due to ad fraud. According to Statista, this figure is expected to increase to $100 billion by 2023.

This situation is already concerning, but what makes it worse is that the reports fail to consider the percentage of violations that occur due to ad setup policies. These violations include ads that overlap with other content or ads (in part or whole), ads that are completely hidden due to display or CSS errors, or ads that fail to behave as intended. For instance, an ad may render off the page or obscure other elements when viewed at certain browser widths.​

Even considering invalid traffic alone, a leading industry report estimated that around $35bn of ad spend annually is wasted showing ads to bots or crawlers. In recent years, publishers have become much more aware of this problem. However, it is important to remain vigilant and defend against this problem and potential loss of revenue. 

How to identify and prevent IVT

When looking to limit invalid traffic. A good place to start is to identify your site’s audience and traffic sources. Use analytics to analyze traffic patterns, looking out for anomalies or spikes in the data that don’t seem organic. A page or domain might have been targeted if a lot of the traffic increase comes from a particular area or the time on site drops dramatically. 

Google recommends segmenting your traffic using analytics (or other similar alternatives) to help track and review traffic across your sites. This allows monitoring of visitors who view the pages and their behavior there. Segmenting your traffic by source will enable you to see how they perform relative to one another. This can again alert you to anomalies, allowing you to identify potential invalid traffic quickly. 

Publishers should also be very diligent when it comes to checking ad implementation. Every ad should follow Google and IAB guidelines regarding the space around ads, visibility, intrusiveness, display properties, etc. 

Exploring the automation alternative

However, many publishers are moving towards a more automated method of filtering. That’s because bot attacks are getting more and more sophisticated, and ad setup policy violations are becoming harder to eradicate (or easier to miss). 

Ideally, when choosing an automated IVT solution, you want to fully understand what the product is doing and how sophisticated it is. Many vendors break down invalid bot traffic into “general” (spiders, crawlers, and robots that can be identified based on their non-human behavior) and “sophisticated” invalid traffic. 

Sophisticated invalid traffic is a lot more technical and harder to catch. It usually requires advanced analytics and significant human intervention to identify, analyze, and prevent threats. These include bots and spiders that look like human visitors, hijacked devices, hijacked sessions with hijacked devices, invalid proxy traffic, adware, malware, fraudulent incentivized promotion, falsely represented sites that present themselves for legal purposes, cookie stuffing, manipulation/falsification of location data, and more. An automated solution should be able to deal with both types and be continuously updated as new threats arrive. 

You also want the product to alert you to ad setup page violations or ad placements outside of IAB guidelines. These can seriously impact the reputation of your site and the bids you might attract from advertisers. 

Some solutions only provide an ad fraud report post-auction, but that could be too late. Ideally, your solution should restrict ads from serving where it appears either an ad placement violation exists or invalid traffic is detected to prevent network ad bans and ad revenue deductions (clawbacks). An optimal IVT solution can help you better understand the traffic your website receives to help you minimize revenue loss.

Final thoughts 

While the threat of invalid traffic and ad setup policy violations may seem overwhelming, automated solutions can offer a more efficient and practical approach to addressing these challenges. As the landscape of invalid traffic and ad fraud evolves, it is critical to stay vigilant and proactive to avoid and address these challenges in order to optimize advertising revenue. 

About the author

Kean Graham is the CEO and Founder of MonetizeMore, a leading ad monetization partner for web publishers and app developers. Under his leadership and guidance, the company has scaled to 15B+ monthly impressions for over 1000+ publishers worldwide.

Advertising | Supporter Spotlight

Survey: Advertisers looking to attention metrics in 2023

Cookie deprecation is approaching and over the past few years the industry has been considering how to fill the gap. Publishers and advertisers are testing alternatives that will allow an ad-supported internet to continue to thrive. For the second time, we surveyed publishers and advertisers around the globe for an upcoming report examining the evolution of cookie deprecation on both sides of the industry. Here are a few of the key findings ahead of the full release later this month.

Attention holds promise as an advertising currency

Attention stands to benefit from the looming deprecation shifts, according to both sides of the industry. These solutions do not depend on third-party cookies, instead measuring exposure and engagement in a privacy-friendly way. Attention ranked 3rd for advertisers and 4th for publishers on a post-cookie solution ranking.

Among advertisers, 96% stated that they will rely on attention in either most or some of their ad buys in 2023. Publishers agree: 94% described attention-based capabilities as either “moderately important” or “very important” in 2023. Those same publishers stated that their offering was either “very good” (29%) or “good” (48%).

Solution uncertainty challenges publisher revenue expectations

Despite the focus on experimentation, potential solutions may have a way to go before they gain trust in the marketplace. Three out of four professionals we heard from were still in some phase of the testing process. With only one year to go until Google’s latest deprecation deadline, there is clearly more problem-solving to be done.

One of the more telling year-over-year changes showed that this uncertainty is impacting how publishers are thinking about post-cookie revenue. Though publishers who thought their overall revenue would decrease were in the minority, the number of respondents who predicted an increase saw a steep drop. In 2022’s survey, 63.8% of respondents anticipated greater revenue, while only 48% thought the same this year.

Conclusion

With DV’s unique position as a partner for both publishers and advertisers, it’s one of our highest priorities to stay in tune with the trends and drivers of the digital advertising industry as a whole (as you’ll see from our ongoing research). With uncertainty and opportunity abound, few topics have been as prevalent to the entire community as the imminent deprecation of third-party cookies.

This is the moment to push for collaboration with advertisers while there is still time for both sides to adapt and compromise. Third-party metrics like attention are just one way that both sides can build trust and alignment by speaking a common language. The ad-supported ecosystem will be in a much better position to thrive in privacy-friendly ways as these solutions take hold and become more actionable by both sides.

Advertising | Perspectives | Supporter Spotlight

Commerce has evolved. It’s time publishers did, too.

Consumer buying habits have changed.

The shift to online buying—a trend that was accelerated by the pandemic—has changed the face of commerce forever.

In the US alone, e-commerce sales reached $1.03 trillion in 2022, with 80% of consumers conducting product research online before making ​a purchase decision​. 60% of consumer touchpoints to drive purchases are delivered digitally, and 79% of consumers made an online purchase using their mobile device​ last year.

Looking ahead, $2.4 trillion​ of retail sales are projected to occur online by 2026, representing 40% of total retail sales​.

What do all these numbers tell us? Today’s shopper journey looks radically different from just a few years ago. From in-depth consumer research, multi-platform purchasing, online and offline touchpoints, and high-ticket purchases taking place on mobile devices, it all adds up to a new consumer paradigm.

So how can publishers capitalize on these changes to create new revenue opportunities?

Retail media 101

To understand the full extent of the commerce media opportunity for publishers, it’s important to first understand retail media.

Retail media—ads placed on a retailer’s e-commerce site or app at the point of purchase—enables brands to boost their visibility in the digital retail space and link ad spend directly to digital retail sales. In 2022, GroupM reported that retail media already represented $101B of global ad spending, with $37.39B in the US (eMarketer).

Commerce media takes retail media one step further, bringing together advertisers and commerce data to engage consumers where they are actively researching, browsing, and buying on the open internet, in addition to retailer sites. This means that brands can pinpoint consumers wherever they are in the customer journey, and wherever they are on the web.

It also opens the door to bring brands and media owners closer together to deliver immersive experiences for consumers and drive commerce outcomes for media buyers.

Partnering with retailers to drive commerce

Another crucial aspect of commerce media is how it brings publishers and retailers together.

Forward-looking publishers are choosing to integrate commerce-focused content with their existing output, while retailers are making it easier for consumers to complete transactions by placing commerce experiences directly on publisher sites.

Commerce media is becoming the new business driver for media owners. They’re tapping into the commerce boom to create new revenue streams and grow advertiser value. For example, Buzzfeed reported $92 million​ in affiliate revenue, growing 26% YoY through sponsored content. Hearst newspapers saw 675% growth​ in digital revenues tied to commerce budgets with first-party data growth​, while Future reported $1 billion​ in commerce sales for advertisers, up 56% YoY, by leveraging shoppable ad units​.

By 2026, $50B of new digital commerce ad dollars will flow to media owners, but where will this ad spend come from? 80% of advertisers say their commerce spend will come from channel shifts.

The anatomy of a publisher commerce media strategy

As budgets from other channels, such as trade marketing, shift online, commerce media will open up new revenue streams for publishers, allowing them to monetize their valuable first-party data and capture additional brand spend.

This also creates an advantage for retailers, whose inventory is limited on their own sites. And it’s here that commerce media really comes into its own.

In tomorrow’s commerce media ecosystem, retailers are the new media owners, with publisher partners fueling the customer journey. Publishers need to understand the position of their content within the shopper journey before starting a commerce strategy: Who is their audience? Can they influence user purchases? How close are they to retailers’ landing pages?

Once a publisher has a complete view of their audience, they can easily gauge their affinities with product categories. Publishers can then use these commerce affinities to tailor their content and affiliate marketing strategies to their particular audience while integrating relevant commerce placements, like native product recommendation widgets, shoppable creatives, and embedded purchase links.

Above all, a commerce media strategy will minimize disruption to the publisher’s user experience, ensuring relevant, tailored advertising without compromising on return visits.

Connecting commerce and content

So, what does the road ahead look like for publishers looking to tap into commerce media?

Looking at the industry, especially in light of the upcoming cookie deprecation, the die is cast: content and commerce will continue to converge.

How publishers capitalize on this paradigm shift remains to be seen, but it’s likely that many will orient themselves toward commerce-focused content. Expect to see more ad formats, like shoppable ad units, which drive users back to retailer experiences, as well as affiliate programs to push incremental revenue. Innovative publishers may also choose to use sponsored listings and curated digital storefronts tied to retailers which align with the unique interests of their users.

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