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Advertising | Supporter Spotlight

Advertising has an addressability problem; publishers can help 

The combination of users choosing cookie-blocking browsers and opting out of tracking has led to 70% of the internet being invisible to adtech. The result is a vast addressability problem in the open marketplace (OMP), which has put publisher revenues and advertiser reach in freefall.

Innovative publishers address this head-on by building direct-sold businesses, finding privacy-forward solutions to monetize 100% of their audiences and building deeper and long-term relationships with advertisers. 

Addressing the entire web

The advertising industry is starting to realize that 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. 

For publishers, it’s the adtech tax and data leakage that occurs in the OMP. In addition, it’s damaging to the user experience that premium publishers pride themselves on, as they cannot guarantee that their users get relevant ads.

Direct-sold offers both parties the best possible solution to OMP woes. Premium publishers have first-party data sets, which are built on authenticated, contextual, declared, and behavioral data, that can be leveraged by advertisers to reach the unreachable 70% of online audiences.

Premium publishers have strong relationships with their users that have been built on trust. This enables them to tell compelling stories about their audiences – through the first-party data they’ve collected from those users – and provide the insights that advertisers are looking for. Because of the source of the data, publishers are able to be transparent about how their audience segments have been built, and provide real evidence of how connecting with these audiences can help advertisers achieve their objectives.

 Identifying the opportunity

The need to return to more of a direct-sold approach has already been identified by some advertisers, with a growing trend beginning to flourish at the backend of 2022, when publishers saw a 25% drop in OMP revenue and a 37% increase in direct-sold audience revenue, growing to 55% in the first quarter of 2023.

This trend is none more evident than in the US (the largest programmatic market in the world) where there is a clear shift in focus from the OMP toward direct relationships. In fact, according to eMarketer, direct-sold ads will represent 75% of the total programmatic digital display ad market by 2024, with OMP only accounting for 8.5%.

Publishers, having realized that the industry’s direction of travel means that the OMP is largely ineffective, have been driving forward with adjustments to their strategies, particularly when it comes to the use of first-party data. Gumtree, for example, where the use of first-party data in direct deals has led to a 36% increase in click-through rates in the first quarter of the year.

Meanwhile, Trusted Media Brands (TMB) – which is home to titles including Reader’s Digest, FailArmy, The Pet Collective, and People Are Awesome – has reached a stage where the vast majority of its direct-sold campaigns (94%) are using first-party data.

Beneficial for all

Ultimately, the best way for publishers to maximize their revenues is to realize the addressability issue is a very real problem today and for publisher CROs and brands to recognize that the OMP can no longer deliver the effectiveness that it used to.

The answer to the OMP’s shortcomings, and the need for addressability, lies in direct-sold deals and the first-party data that publishers hold to power those deals. 

Direct deals open up audiences for advertisers, ensure transparency and control, and guarantee access to the premium inventory they can’t find in the OMP. It’s up to publishers to show advertisers the access and insights they can get into audiences that will provide them with the ability to accurately target users and achieve the outcomes they are looking for.

The direct-sold strategy means publishers can grow their revenues, users get to see only the ads that are most relevant to them, and advertisers get the most out of their budgets. 

Featured Post | Video

TikTok’s Pulse Premiere partners with media brands. Will it work?

TikTok and media companies across the globe are teaming up to write the next chapter in the epic saga of the media and its complex relationship with social platforms. In early May, TikTok announced Pulse Premiere, a program designed to place advertisers alongside the premium content created by trusted media brands — and share the revenue 50/50 with those content creators. 

The first question that might bubble to the surface for media companies is, “How is this different from all the other revenue-sharing schemes with social platforms?” 

“Some publishers have had good relationships with some platforms,” says Nic Newman, Senior Research Associate at the Reuters Institute for the Study of Journalism. He points to Snapchat as an example of a platform that has led to reasonable revenue for some media companies. But revenue is not the main impetus for them to embrace TikTok. “Cultural genres are things that premium publishers are pushing into, especially to reach younger users,” says Newman. And TikTok has been a key partner in that strategy all along.

This strategy aims to combat news avoidance and engage new audiences, says Newman. Add to the mix a decline in brand revenue and media buyers who find it easier to buy through platforms, and it’s clear why premium publishers are eager to partner with a wildly popular platform like TikTok. From TikTok’s point of view, Newman adds, it also makes sense to reward media companies for creating content that helps fuel the platform’s ongoing success. 

But as it turns out, there are a few key differences between TikTok and its social media competitors that have media companies feeling bullish.

Embracing TikTok as a content creation platform

TikTok is unique. Facebook and X/Twitter, at least for publishers, are places where publications and audiences share links to content, which drives traffic back to a website. This dynamic has been a source of tension over the year, which continues to play out. TikTok, however, is more of a content-creation tool than it is a distribution platform. Publishers who are successful on TikTok understand and embrace the peculiarities of TikTok and create content designed specifically for this audience.

Reuters Institute’s 2022 Digital News Report cited TikTok as the fastest-growing social network for news consumption. This is driven, in part, by publishers’ desire to reach new, younger audiences. Reuters found 40% of people 18 to 24 use TikTok, and 15% of them use it for news. It only makes sense that news brands with robust TikTok audiences would seek to cash in on that engagement through advertising.

One of those media brands is Vox Media, which joins Condé Nast, Buzzfeed, Dotdash Meredith, Hearst Magazines, MLS, NBCUniversal, UFC, and WWE as one of the initial Pulse Premiere partners. “Our editorial brands and video franchises reach millions of highly engaged followers on TikTok, and we are now excited to work with TikTok on a new ad product,” Ray Chao, SVP & GM of Audio and Digital Video at Vox Media, said in a statement to DCN. “We are hopeful that this partnership will help us strengthen our digital video revenue model through a new revenue stream.” 

Similarly, Deb Brett, Condé Nast’s Chief Business Officer, Digital, says, “Our audience demands us to be on TikTok.” That’s not a problem for Conde Nast’s publications, which have been “digital first” for years, according to Brett. 

Importantly, Condé Nast also avoids taking a one-size-fits-all approach to its social media channels. “We tailor what we create for every platform. We want to hear from our brands in different ways,” says Brett. Before TikTok introduced Pulse Premiere, that often meant creating branded content integrations and custom programs for advertisers who wanted to reach the brands’ audiences. Condé Nast even tried live streaming and shoppable content. Pulse Premiere is now making it easier for media organizations to monetize their presence on the platform. 

Thinking about brand safety

Pulse Premiere comes on the heels of TikTok Pulse, launched in 2022, which places brand advertisers next to the top 4% of trending videos on TikTok across a number of categories. Throughout the history of social media advertising, brands have run into the problem of unpredictability. Historically, this problem was only addressed once it boiled over, sometimes in the form of a boycott. As ads follow users around one social platform or another, there has been no telling what content an ad will be placed beside. At this stage of the social game, it’s no surprise that TikTok is being proactive about providing a solution to that ongoing issue.

In its announcement, TikTok said, “Pulse Premiere gives brands the control to choose where their ads are placed, adjacent to content from our premium publishing partners in lifestyle and education, sports, and entertainment categories for specific tentpole events as well as evergreen, ongoing content.” In other words, TikTok is giving advertisers the ability not only to avoid being placed next to the latest viral conspiracy theory video — or even just dance trends irrelevant to a brand’s messaging — but to easily continue existing publisher relationships.

Extending existing brand relationships 

As a publishing community, we love [that TikTok Pulse Premiere is] turnkey, its low lift, and its scalable,” says Brett. Rather than devising ad hoc solutions to advertiser demands to be part of the TikTok conversation that Condé Nast’s brands create, the publisher can now take advantage of a native ad platform.

Condé Nast will kick off its Pulse Premiere participation by aligning a campaign with what it calls one of its “cultural calendar moments”: Vogue World. The event takes place on September 14 in London, and Brett says Vogue will align its TikTok content with the event. “It’s an exciting intersection of their ad product and our cultural calendar moments,” she adds. 

While it’s still too early to tell whether the economics add up for publishers, Brett says, “It has indicators for a huge potential.” Newman, however, points to a problem publishers have come to know well: “Fundamentally, people’s attention is the problem. The first few publishers do well, then other pubs follow, and the rates go down.” Only time will tell if TikTok proves to be different from its competitors in the ways that matter most for publishers.

Perspectives

DCN’s must reads: week of August 17, 2023

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

DCN’s must reads: week of August 10, 2023

Advertising | Industry-Research | Video

Advertising popular with streamers and consumers

It is becoming increasingly clear that advertising will play a significant role in the streaming ecosystem. As Disney CEO Bob Iger told investors in Disney’s quarterly earnings call, “The advertising marketplace for streaming is picking up.It’s more healthy than the advertising marketplace for linear television. We believe in the future of advertising on our streaming platforms, both Disney+ and Hulu.”

Industry giants are now seamlessly incorporating ad-supported tiers into their streaming options. This shift from the early days of subscription-based, ad free streaming underscores the industry-wide recognition that catering to budget-conscious consumers is integral to achieving sustainable subscriber growth.

New research from HUB, TV Advertising: Fact or Fiction, affirms that most television viewers actively embrace ad-supported offerings. Six out of ten viewers prefer ad-supported subscriptions, especially when presented with the prospect of a reduced monthly fee. Interestingly, those with reservations about advertising remain in the minority, underscoring the widespread acceptance of ads as an primary and tolerable factor of content consumption.

Shifting the paradigm

The transformation in consumer sentiment towards ad-supported subscriptions carries a dual impact. Firstly, it renders ad-supported tiers significantly more appealing to a broader spectrum of viewers, including those who haven’t subscribed previously. Secondly, it reinforces the notion that the quality and diversity of content have a significant influence over viewer preferences. This often outweighs the appeal of a completely ad-free experience. Within the streaming ecosystem, advertising now emerges as a central thread weaving together content variety, affordability, and viewer gratification.

The rising desire for customization

Furthermore, a growing trend in viewer preferences is the desire for enhanced control over subscription tiers. Nearly four out of 10 viewers express a strong inclination towards personalizing their subscription model. They’re searching for a flexible array of choices, ranging from a premium, ad-free encounter to a more budget-friendly alternative featuring strategically placed advertisements. The attraction in customization preferences empowers streaming providers to cater to a broader spectrum of consumer segments.

Entrants that intrigue

Notable platforms like Max, Disney+, and Netflix, which recently embraced ad-supported tiers, are meeting positivity from their audiences. This dispels concerns about potentially hurting your brand in a previously ad-free service due to the introduction of advertisements. Twenty-seven percent of viewers switched tiers. Among them, 60% switched from with ad to no ad tiers, and 46% switched from no ads to with ad tiers.

Enhancing engagement through thoughtful execution

Ensuring a satisfactory viewing experience for consumers creates an environment ripe for advertisers to thrive. When viewers encounter an appropriate amount of advertising content, their engagement levels increase. This principle extends not only to the overall number of ads but also to the duration of ad breaks. Contrary to the notion that advertising detracts from the streaming experience, it possesses the potential to elevate it, capturing viewers’ undivided attention when executed thoughtfully.

The valuable component of ad-supported subscriptions

As viewing sources diversify, ad-supported subscriptions assume a key role within the streaming landscape. Subscribers want the autonomy to mold their subscription expenditure as well as the degree of advertising they’re willing to embrace. In response, streaming platforms offer a dual strategy, presenting ad-supported and ad-free tiers. This shift harmonizes content diversity, affordability, and engagement, shaping the streaming ecosystem.

Advertising | Supporter Spotlight

How media companies can evolve their first-party data strategy

With third-party cookie deprecation looming on the horizon, first-party data is becoming increasingly important for media companies. Advertisers have grown accustomed to the granular targeting that cookies offered and seek solid solutions underpinned by strategy and technology that will deliver attention and engagement from a brand-suitable, high-quality audience.  

At Arc XP’s recent customer conference, Ryan Gladstone, Director of Product Management at Arc XP, and Nick Nyhan, Managing Director and Co-Founder of Upside Analytics, shared strategies that media companies can employ to leverage their first-party data most effectively. Here are the key takeaways:

Why should media companies care about first-party data?

First-party data is considered the highest-quality data available because the information is willingly provided directly from the source: your audience. Unlike second- or third-party data, first-party data is proprietary and more accurate and updated than when it comes through other sources. Moreover, you can use it on a granular level to improve how you serve and grow engagement, even creating bespoke audience segments unique to your market and content. That flexibility, coupled with accuracy and the ability to respond to browser changes and evolving privacy laws, makes first-party data a critically valuable organizational asset.

Strategically, first-party data is particularly important to gather and use to enrich both audience and advertising revenue models. When effectively deployed, the collection of first-party data leads to higher audience conversion rates. Organizations that gather first-party data are more valuable to advertisers and, therefore, are able to charge higher rates. Audiences are also more willing to provide first-party data if they see you as a trusted information source, if they hear it helps them have a smoother login experience, or a more relevant and personalized experience. When explained well, it is a win for you and your audience.

Start where you are: Crawl, Walk, Run

When developing your organization’s first-party data collection strategy, it can be helpful to conceptualize the journey with a three-level model. You have to crawl before you can walk, and you have to walk before you can run.

Level 1: Crawl

Segments are the key to driving more sophisticated business strategies with your audience. At level one, you’ll introduce some basic segmentation principles and practices to your organization’s data strategies. Start your journey by gathering data and creating easily addressable audience segments that you can use to advance both your audience revenue and advertising revenue strategies.

  1. Gather email addresses: If you’re not sure where to start, this is where to do it. Putting together an email list is a basic priority of first-party data. This single piece of information is the most important piece of data to many systems – from CRM (customer relationship management) to advertising and registration. If you’re going to ask for anything, ask for email addresses.

  2. Set up segmentation: Once a user has provided you with their email address, they’ll be more likely to provide you with other pieces of information, too. You can use this opportunity to ask questions of your audience that will help you begin to create audience segments.

  3. Start connecting the dots: Once you have email and basic survey data collection in place, you have almost everything you need to start creating simple but powerful addressable segments. All you need to do now is start tracking engagement. There are a lot of different ways to do that, but Google Analytics is a great place to start.

Level 2: Walk

When you enter the next stage, you should already have established the basic building blocks of your first-party data collection infrastructure. At this point, you can start to introduce new layers of sophistication to extend, fine-tune, and refine your existing strategies.

  1. Roll out progressive profiling: To extend the number and type of audience segments that you’re able to create, you’re going to need to gather more data. This will help you build out your profiles and get a more complete picture of your audience.
  2. Implement A/B testing: At this stage, one of your main goals should be to refine and optimize the systems you established in the Crawl stage. When considering changes to your website, for instance, it’s a great idea to run A/B tests on your audience to determine the most effective path forward. 
  3. Tailor your offers: The more data you have, the more explicitly you’ll be able to be target. However, you choose to segment your audience, try using the data to share relevant offers.

Level 3: Run

At the Run stage, you’ll be implementing greater levels of sophistication into your first-party data systems and using the information you collect to enable more complex long-term initiatives with more precision.

  1. Personalize your site: With enough data to work with, you may be able to tailor your entire site experience to each audience group. You might opt to show fewer ads to dedicated subscribers. Or you might advertise your own organization through in-house advertising to higher-propensity audience segments, but not others. That can make a huge difference and presents much larger revenue opportunities.
  2. Blend and extend your data: No matter how much you know about your audience, there are always opportunities to learn more. So in addition to progressive profiling, data can be potentially sourced from what is already resident within your CMS system or email systems, adding context about interest areas and times of engagement, further enhancing your knowledge and how to serve different segments.
  1. Share your knowledge: It’s not uncommon for media organizations to enter into an alliance with one another to share their permissioned first-party data. It’s as if you and your peers are each bringing a piece of a puzzle to the table and combining them to make something bigger.

Following these strategies can help you successfully build an audience segmentation strategy that navigates the impact of the third-party cookie deprecation while building a sophisticated approach that delivers advertisers genuine engagement with highly-desirable audiences.

Perspectives

DCN’s must reads: week of August 10, 2023

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

DCN’s must reads: week of August 3, 2023

Featured Post | Industry-Research | Revenue

Change, lots of it: Enders Analysis on saving local news in the UK

For the news media industry, the rise of artificial intelligence for is a double-edged sword. While some publishers are using it to churn out news stories regardless of how their audiences receive them, local news titles are considering how it can provide them with a major point of differentiation. For many, that will also be a lifeline.

A report into the state of local news in the UK from Enders Analysis and the News Media Association pulls no punches. It is clear about the extent to which local news publishers did not benefit from advertising spend moving from print to digital. It’s also candid about the likelihood of titles foregoing print entirely in the near future.

However, the report goes well beyond rehashing the impact of technology on the news media business. While it clearly sets the stakes for the industry, the report, “Signs of local life: a new phase for local media” also focuses on opportunities and collaborative strategies for local publishers as we move forward.

The authors note that “publishers have done very little to transition habitual paying print readers—or the next generation—into habitual paying digital audiences”. It also points out that local media have lost the war on digital classifieds and have no realistic path back to reclaiming that revenue.

That is exacerbated by other challenges facing print media. From higher production costs to the “effective monopoly” of the two major distributors, the ability to print and disseminate dailies and weeklies is becoming strained. The report states it expects the number of titles that go digital-only in the next decade will be greater than the previous 10 years.

As a result of that—and the absolute dominance of tech giants in digital advertising—the report states that appetite for external investment is limited: “No one in the industry would deny all this decline has driven investment sentiment away from the sector, and consequently depressed the value of local and regional media.”

Green shoots

But rather than being solely self-flagellation, the report highlights some of the irreplicable strengths of the UK local news industry. Owen Meredith, chief executive of the NMA explains that, “while clearly everything isn’t rosy, there are some positive signs of life. There is innovation there; DC Thomson [for example] is really good at building a membership model and subscription model that genuinely works in local news.”

As the report makes plain, the greatest strength of the local news industry is the direct relationship it has with its audience, and the trust that flows from its original journalism. It states: “At one time all of these distinctions were obvious because they were visible in the physical world: print was plainly different from other content and consumption. Online, these distinctions evaporate.”

So, the report argues that the local media industry needs to “shout these distinctions from the rooftops” particularly in the emerging era of generative AI-created content. Local news has provenance and personality. The report makes the argument that it will be difficult if not impossible for AI-generated content to take its place. In an age where the amount of noise online is to grow exponentially, local news media can provide the signal.

Meredith says local publishers like Newsquest are already set-up to take advantage of that trend: “We’ve got these huge scale audiences… there’s been a perception that a lot of that was driven by non-core local news.

“Actually, there is more data coming to light now… that you really do have deep engagement, multiple pageviews, reasonable penetration and good scroll-through. People are actually coming to local news sites for the local news product.”

That is in line with the recommendation by the report that local publishers move from pursuing digital advertising based solely on scale: “Too much revenue today is reliant on low-yield programmatic advertising” which has diminishing returns—particularly for the newspapers.

Show me the money

In order to survive to take advantage of that strength, however, local news organizations need time and investment, particularly around tech. Meredith says: Tech is a big-ticket item for a lot of smaller publishers. You can’t therefore do everything you might want to do at once. But I think you can do phased-based tech and there’s a lot of off the shelf solutions, frankly, that provide publishers with answers without massively excessive investment required.”

Given the long-term forecasts for ad spend and a lack of philanthropic support in the UK, the report suggests a number of alternative sources of funding.

In line with earlier recommendations from the Cairncross Review, the Enders report points out that direct government funding is basically impossible for any independent press that seeks to hold the government to account. Instead, it suggests alternatives that include more government advertising (already the largest single source of local advertising revenue across its many departments) with the local press.

Meredith concurs with this assessment, stating: “We think a genuine commercial exchange on advertising is fundamentally different to subsidy. We firmly believe that there is a long-term sustainable future for local news in a commercial way.

“We’ve been talking about the digital markets bill for ages. It’s not a silver bullet, but it will certainly help. There’s lots of elements but you [can] combine that commercial vitality without government subsidy or intervention, as well as the Competition and Markets Authority getting out of the way and allowing market consolidation to happen”.

Meredith is also keen to point out that the BBC has a key role to play in the future of the local press. It is a wholly unique organisation by any media standards, and Meredith argues that if it were proposed today its free-to-access nature means it would be immediately shot down by competition authorities. He advocates for a resetting of the relationship between the local press and the BBC, both through the BBC Local Democracy Reporting Service and other means.

Ultimately, the conclusion of the Enders Analysis report is that local news in the UK needs to make itself attractive to investment from outside the industry. That will be like ripping off a sticking plaster, as it has been resistant to change for years – for a variety of reasons. Executives at the major publishing houses have been accused of riding the slow decline of tested revenue sources in service of their payouts, for example.

True change in order to attract investment will require, as both Meredith and the Enders report advocate, collaboration and collective agreements in order to reach sustainability.

Advertising | Industry-Research | Video

For SVOD success, launch with ads from the start

In the ever-changing landscape of streaming services, media companies constantly explore new strategies to attract and maintain subscribers. One notable approach is the success of the ad-support SVOD tier. In fact, new research from Ampere shows that streaming services launching with an ad-supported tier from the start have a higher proportion of subscribers than those that added it later.

Ampere’s data reveals that SVOD services like Hulu and Peacock, which were early adopters of ad-supported tiers, boast an impressive 90% of ad-supported viewers. On the other hand, latecomers like Netflix, Disney+, and HBO Max struggle to gain significant traction with their ad-supported options. These late starters capture only a small share of their subscriber base. For instance, as of June 2023, approximately 2% of Netflix and Disney+ US subscribers are on the ad-supported tier. Even HBO Max, which launched an ad tier in March 2021, had only 5% of its subscribers on its ad-supported plan before transitioning to Max in April.

Drivers of success

Ultimately, an ad-supported tier’s success depends on several factors, including the service’s pricing strategy, content library, and targeted audience. Launching with an ad-supported option from the start appears to be more effective in building a substantial base of viewers. Late adopters may find attracting a significant share of their subscribers to the ad-supported tier challenging. This is especially true if the service has a strong legacy of being ad-free.

Ad-free service is still appealing

Despite the apparent appeal of ad-supported viewing, most new subscribers across the top seven SVOD services still prefer ad-free plans. According to Antenna data, between January and May 2023, three out of five new subscribers opted for ad-free viewing. Even services that recently introduced ad-supported tiers, such as Peacock, saw a considerable percentage (69%) of new subscribers choosing ad-free options.

However, there are potential changes on the horizon. Netflix has made a strategic decision to remove its Basic plan, which previously served as a mid-range option between the ad-supported and standard ad-free plans. With the elimination of the Basic plan, the price gap between ad-supported and ad-free viewing has increased significantly from $3 to $8.50 monthly. This move might lead more new subscribers to opt for ad-supported viewing due to the cost difference.

Additionally, Netflix’s crackdown on password sharing during June and July 2023 could have also impacted its subscriber base. Free viewers who were previously enjoying content outside of the subscriber’s home are now more likely to sign up for their accounts. For these price-conscious users, the cheaper ad-supported tier could become an appealing option.

However, the trend of traditionally ad-free services attracting more ad-free subscribers might continue to prevail. Peacock’s decision to close the free ad-supported tier to new users. However, they still allow existing subscribers of the free ad-supported to continue using it. This suggests that companies are recognizing the importance of retaining ad-free subscribers.

Advertising | Revenue | Supporter Spotlight | Video

Here’s why publishers should be thinking about CTV revenue

Once again, the media world has found itself in belt-tightening mode. A number of high-profile media companies have announced layoffs, and ad spend has grown more slowly in 2023 than in the previous few years. Publishers are looking for revenue streams beyond subscription packages – and for those who have video content, CTV offers a lot of promise. 

After all, CTV is where the growth is, in terms of ad spend and audience. For publishers that are already monetizing video on desktop and mobile, CTV is the most intuitive next step for diversifying revenue. For those that aren’t monetizing their video content yet, that’s all the more reason to jump into CTV.

In terms of both viewership and the influx of ad dollars, CTV is growing like gangbusters. Streaming CTV ad spend is tracking to reach $23 billion by 2026 – a double-digit increase from today. Streaming video consumption has surpassed linear TV, as experts had predicted, and there will be 3.5 users of over-the-top (OTT) streaming services globally by 2027. 

Right now, the audience growth is coming from ad-supported tiers, which is an ad inventory source so desired by brands that supply can’t keep up with demand. This sure sounds like a field day for the Netflixes and Hulus of the world. But while the largest streaming platforms get the lion’s share of attention in the industry trades, they won’t be – and, considering demand, can’t be – the sole beneficiaries of this influx of ad spend.

Power to the content owners

According to industry experts, more than 90% of CTV ad spend coming through DSPs goes to around 30 streaming platforms. That’s a much larger number than the handful of big names that get name-dropped most frequently in CTV conversations. Not many of these platforms own all, or even most, of their content outright. They source it through deals with other media creators. And those creators have a distinct advantage: They reserve the rights to sell ads on their content. Streaming services don’t have exclusivity in the same way as the publisher who creates the content. 

Clearly, media companies stand to benefit greatly by partnering with CTV services for video syndication. There are two types of publishers who can most easily grab those ad dollars: those that already stream their content on CTV, and those that have video content on their owned and operated properties that they’re not monetizing via CTV yet. 

We’ve heard about leading publishers who have launched their own video apps on CTV services including The Economist, Vox, the Wall Street Journal, and the Washington Post. But across the broader landscape of publishers who produce the high-quality video content advertisers crave, there’s a great untapped opportunity for ad revenue. 

Good news for publishers: The bar for entering the CTV space isn’t nearly as high as it was a few years ago. Free ad-supported streaming TV (FAST) services have democratized access to the streaming ad market, as it’s not nearly as costly as developing a subscription app – the means of access in the days before FAST. 

Publishers who already have the video content can launch their own channels across multiple CTV platforms and devices, at a reasonable cost. For the great many publishers who already have experience syndicating video across social channels, it’s an intuitive move and it opens up inventory that delivers higher CPMs, is more desirable to advertisers than pre-roll on the video players hosted on publishers’ own digital properties, and presents opportunities for advertisers to connect with viewers in a wider variety of viewing environments and viewer mindsets. 

CTV calls for a strong data strategy

Expanding to CTV will be an easier task for publishers who partner with data platforms that offer flexibility and interoperability. The limited availability of actionable, scalable first-party data remains a pain point not only for advertisers, but for publishers looking to get into streaming. This presents challenges in working across streaming platforms and devices, which have their own data but are reticent to share it. To drive the most revenue, publishers will want to be able to connect their data with any of their ad partners who need it for campaign optimization. That means the ability to solve for identity, and to provide interoperability, are essential pieces of the puzzle.

A solid, well-applied data strategy opens up key advertising functions like cross-platform targeting, frequency capping, and personalization at scale. Publishers don’t have to consider themselves out on their own in sourcing the necessary data, though. Streaming device makers are one place to look, although publishers may need to match the device makers’ proprietary IDs for actionable cross-platform insights. Using IP as a proxy (common in CTV) enables measurement in CTV, although IP may not be the best proxy in other digital environments, or for targeting at the individual level. Demographic, location, behavioral, and other data from data providers will enable programmatic buying, and incentivize advertisers that want the scale and efficiency of programmatic. 

To get the most value from CTV, publishers benefit from having a capacity to break down data silos and unify all identifiers (and the data signals used for ID enrichment). This opens up access – access to inventory for buyers, and to new revenue for publishers. It also allows for targeting across the broader ad ecosystem, while limiting wasted spend. 

A strategy that unifies data from relevant sources, and the ability to solve for identity, enhances a publisher’s value proposition to advertisers in CTV. It presents a great revenue opportunity for publishers. And delivering the value of actionable data insights is central to deepening long-term relationships with advertisers.

Making the most of the opportunity

At this stage of the CTV marketplace’s growth, there’s a real opportunity for any creator with quality video content. Therefore, publishers should be taking advantage of their video libraries. To fully capitalize on those advantages, they’ll need to be able to access and fully leverage the data that advertisers are looking for. 

Publishers who can bring both to CTV will be in a better position to weather economic unpredictability that may come to the digital media marketplace in coming months and years. Resilience hinges upon the ability to vary revenue sources, reach new audiences, and capitalize on an ever-expanding viewer base. And a strong data strategy, based on bringing together data from all relevant sources, will be key to truly realizing the revenue potential CTV holds. 

About the author

For over a decade Hunter has held and managed a variety of sales, consulting, and partnership positions in Advertising/Marketing Technology (#MADtech) throughout the US, Southeast Asia, and Australia. Currently based in Baltimore/DC after six years in the Asia Pacific, Hunter leads Lotame’s Connected TV initiative focusing on household graphing, viewership data partnerships, and data enrichment throughout various supply and demand channels.

Prior to his current role, Hunter led Lotame’s Global Solutions Consulting team solving leading marketer and publisher challenges through identity resolution and data enrichment methods. Additionally, Hunter has helped expand the Lotame Sales and Account Management teams in their Singapore and Sydney offices during his tenure in APAC.

Featured Post | Innovation

What Generative AI means for media companies

When it comes to thinking about the impact of AI on the media, few are as immersed in this space as Professor Charlie Beckett. “I know more about this than I have known about anything in my life,” he told us when we met in his office last week.

The former news editor, now a Professor at LSE (London School of Economics) has been working almost exclusively in this space since 2019, when he authored a report on artificial intelligence and associated technologies, based on a survey of 71 news organizations in 32 different countries. The latest iteration of this global survey will be published in Fall.

Prior to joining LSE in 2006 as the Founding Director of its journalism think Polis, Beckett was a program editor for Channel 4 News in the UK, responsible for coverage of major stories such as 9/11 and the 7/7 London bombings. And before that, he spent a decade as a senior producer and program editor at BBC News and Current Affairs.

Support from Google News Initiative, under the auspices of the JournalismAI project which Beckett directs, has enabled him and his team to produce a range of training resources, including a JournalismAI Starter Pack, a monthly newsletter and two online courses on machine learning. They have also hosted an Academy for Small Newsrooms and an annual Fellowship designed to foster collaboration and innovation among journalists and technologists around the world. 

As Beckett explains, many of these efforts have been bottom-up, informed by the needs of industry leaders and practitioners. Based on this engagement, and Beckett’s ongoing conversations with newsrooms and senior media leaders, here’s a look at the key issues pertaining to AI – and specifically Generative AI – today. 

Challenges for media companies

Echoing some of the findings that we reported on from the recent FIPP World Media Congress, Beckett stresses the potential impact of Generative AI on IP and user habits.

“Publishers are worried about things like copyright, data ownership, trying to come to deals with the tech companies… and they’re very worried, obviously, about the disintermediation problem,” he told us. 

Acknowledging that disintermediation – the reduction in the use of intermediaries (i.e., publishers) in the content supply chain – is “obviously further down the line,” he nonetheless acknowledged that its impact will be “significant for the publishers.” 

This was a theme that Beckett returned to at multiple times during our conversation. The ability of Generative AI tools like Bard to scrape content from a myriad of sources means that ”in theory, you may never need to look at a news website again, because all that stuff has been repurposed by ChatGPT [et al].”

That’s obviously a huge challenge when so many media business models are predicated on attention and serving ads on their own properties. The difficulties that many media companies have faced as a result of aggregators, search and social media – where many outlets have struggled to unlock the monetary value of their content when it was discovered through these channels – look set to repeat themselves. 

Alongside this, Beckett shared that media companies are concerned about not having the technological expertise or resources they need to navigate this revolution. This means that many businesses will be “dependent on what’s out there,” using existing tools rather than creating their own. Given how quickly this technology is developing media companies are “very worried that it [publisher-relevant solutions] isn’t gonna happen quickly enough,” Beckett said.

Building off many existing using of AI in media companies, this will include incorporating generative AI into workflows (such as your CMS. It also likely means striking licensing deals similar to the one last month between ChatGPT-maker OpenAI and The Associated Press, to permit legitimate use of publisher content. 

A look at the innovation projects being explored by LSE’s current JournalismAI Fellows also provides a valuable insight into the issues that media leaders are grappling with, and how AI might help to solve them. This includes automating visuals, identifying misinformation and fostering a deeper dialogue with audiences.

Opportunities for content creators

Certainly, there are very real challenges around monetization and implementation. However, this is accompanied (at least in some quarters) by an enthusiasm for the potential that Generative AI could unlock. 

“There’s no doubt about it,” said Beckett, “publishers just see this as a potential godsend.” The rationale for this stems from a sense that Generative AI can help to reduce costs, while at the same time enabling outlets to generate more content and a broader range of material. 

“That’s not necessarily the case,” Beckett cautions, noting that alongside efficiencies, new roles and workflows will also emerge as a result of this technology. However, for some organizations, Generative AI has the potential to be a real boon. 

Local news outlets are a good example of this, Beckett says. He highlights Newsquest, one of the UK’s largest regional publishers and part of the wider Gannett family, as one player who is enthusiastic about this AI-led future.

“They’re so excited because they have basically got dozens of local titles that don’t do any local news because they sacked so many people because they were chasing dividends to their shareholders,” Beckett says. 

For a company like Newsquest, Generative AI can help to automate a lot more content, freeing up reporters to actually chase down and produce stories. “They see it as a kind of saving grace.”

This argument about liberating resources to invest in deeper work is not new. Nevertheless, the range of output that AI can now produce has grown massively and is only gathering speed. “In a year’s time, people will be using Generative AI relatively routinely in journalism,” Beckett predicts. 

Freeing up resources to do innovative, creative work will be an important differentiator and a key means to demonstrate value in this brave new digital world. 

“In a world of AI-driven journalism, your human-driven journalism will be the standout,” Beckett forecasts. “You’ve got better journalists, cleverer journalists, more creative journalists who do real reporting… that will be where you stand out.”

Where do we go from here?

AI has been used for a range of functions – from automating earnings reports to delivering dynamic paywalls and content recommendations – for longer than you might realize. Beckett posits that Generative AI is part of this continuum. 

At the same time, the breadth of its uses, and the speed with which it is developing, can be daunting. Beckett cautions that, as is with many new tools and technologies, people tend to get over-excited about short-term possibilities and fail to spot the long-term consequences.

One difficulty, of course, is that it is very hard to accurately predict what these impacts may be down the road. Nonetheless, Beckett sees potential implications for the labor force, the role of institutions, and content strategies. 

When it comes to employment, Generative AI will lead to rationalization. “Some specific jobs will go,” he says, predicting that “the kind of bland [i.e. formulaic and often entry level] journalism jobs will go completely… And of course, you can either take the money, or you can redirect it.” 

Beckett advocates that there’s a business incentive to reinvest these savings. Alongside the need for distinctive content that differentiates your offering in an AI world, he also believes that in a world where unattributable scraped content may be de rigueur, some audiences will gravitate towards trusted media institutions. 

We saw this during COVID, he reminds us, with the need for reliable information and concerns about misinformation driving consumers to both local and national/institutional players. 

“People, as we saw in the pandemic, will turn to mainstream media when they want,” he observes. “They want somebody who can just reliably, reassuringly, narrate the world… in a way that I can access and find understandable.”

By the same token, he suggests that there will also be a place in this AI world for experts with deep knowledge of nuanced subjects, which can be hard for machines to replicate. Other outlets which speak to your identity and worldview, may also continue to flourish. 

Alongside this, the ability to repurpose content for different platforms – and potentially in different formats and tones of voice – may also become the cornerstone of many content strategies. Beckett spoke of our differing media habits and needs during the day, and how AI can respond to this by tailoring content accordingly. “All news is data,” he says. And AI means that it potentially be “reformatted in any way that you wish.”

That will take resources but could help to tackle issues of news avoidance among both news aficionados and those less likely to consume the news. AI may be able to help tackle some of the drivers for news avoidance such as tone, relevance, inaccessibility of reporting, as well as the sense of being just overwhelmed by the sheer volume of content out there. 

“You’re optimizing for the problem of overabundance,” he says, “people feel overwhelmed by the amount of choice.” He already sees a shift happening, in which “news organizations are doing fewer stories, but they’re doing them better, and they’re doing them in a more engaging way.” That’s a trend that Beckett sees will only continue in a disintermediated media landscape where the emphasis on quality and distinctiveness will be more important than ever. 

Undoubtedly, Generative AI holds the potential to revolutionize the way content is created, distributed, and consumed. Yet at the same time, it also presents some interesting opportunities for media companies. This technology offers unique opportunities to engage audiences in novel and distinct manners, while also fostering trust, relevance, and value in an increasingly noisy digital arena.

As AI continues to permeate media and journalism, its likely impact remains uncertain and challenging to forecast. Nevertheless, its potential to both disrupt and revolutionize the industry is evident. Subsequently, it is vital that media companies understand the associated risks and possibilities. Only by doing this, can they proactively seek to mitigate these threats and move forward using Generative AI as effectively and strategically as possible.

Perspectives

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5 ways the writers’ and actors’ strike will impact advertising

On May 2nd, the Writers Guild of America (WGA), an alliance of over 11k film, TV, news, radio, and online writers went on strike demanding fair contracts and pay stability. They also stated numerous concerns surrounding artificial intelligence. In June 2023, 65k actors from the Screen Actors Guild (SAG) cast their votes to join the strike in support of their colleagues and to protest how technology has affected their wages as well.

There is much talk about the impact the current entertainment industry strike will affect advertising. The truth is, we are just starting to see its influence. This is mostly due to the timing of the strike. Many scripted shows are on hiatus during the summer and typically advertising is purchased well in advance of their run dates. As the strike drags on, the impact will be keenly felt across much of the media industry. 

Here are five ways we will likely see the strike impact advertising’s bottom line.

A short strike may be a win for broadcasters and streamers

In the short term, broadcasters and streamers are likely to see a boost in their profits. While that may seem surprising on the surface, if the strike lasts under four months it’s a real possibility.

Broadcasters and streaming companies have already sold the advertising that will air during these months. Additionally, contractor and personnel costs declined sharply during the early months of the strike. Hopefully, these early profits are reinvested to buy up the rights to movies and content available for sale – as a way to shore up their audiences regardless of the strikes’ duration. 

However, broadcasters and streamers should be prepared with new inventory, so they don’t lose out to social media if the strike continues until early 2024, as many predict it will. They will want to avoid airing reruns instead of new content, since that will affect viewership and in turn advertising revenue will be lower.

Broadcasters will be hit hardest if the strike goes beyond six months

If the strike lasts only a few months, changes in ad spend may be limited. In the short term, we haven’t seen much of an impact on ad sales. However, if the strike goes beyond a few months, the largest TV broadcasters could be hit hardest. Relative to streaming channels, TV broadcasters have more content that’s prepared “just in time.” 

Unscripted television, like variety shows, reality shows, and game shows have not been impacted by the strike too much. However, we do see a hit to lucrative late-night talk shows, which have already been off the air for a couple of months. This programming relies on writers who have been on strike since early May. 

Prime time advertising is estimated at $13.1 billion during the first half of 2023, which makes up 50% of all national TV ad spend. If the strike is prolonged, we could easily see some weekly prime-time TV shows off the air after a few months of their Fall debuts, as a result of new episodes not being completed.

Media & entertainment advertising will suffer across media

Movies, streaming services, and TV shows (along with others that support the industry) invested over $3.9 billion from January through June 2023. This represents 39% of the total ad spend from media and entertainment advertisers ($10 billion). This estimated advertising investment reaches beyond just TV, to over a dozen media formats. Since the start of the strike, we saw a dip in May YoY (4%). However, in June this segment was already down 26% YoY.  As the strike continues, advertising to promote movies, shows, and streaming services will likely continue to decrease and shift in investment. 

A prolonged strike may even prompt the largest U.S. firms to move more English-language production outside the U.S., to work around the problem entirely. Many countries have none of the protections offered to SAG members in the U.S., offering a viable alternative to production companies. 

Streaming and social platforms may experience a resurgence due to the strike

Streaming channels have significant material pre-recorded, “in the can.” This gives them the  ability to release movies, mini-series, and documentaries. If they have new content while broadcasters are struggling to recreate fall lineups, streamers will benefit. Netflix’s CEO has already said they’ve been preparing for the strike for some time and will stretch out their new releases.

In the event of a longer strike, streaming channels can easily dub content from outside the U.S. and show it here. We saw this during the pandemic. For example, Netflix saw great success airing the South Korean survival drama, Squid Game in the US. Another example, and a personal favorite of mine, was the HBO produced sci-fi flick, Beforeigners. This show  was originally produced in Norway and was dubbed and placed in their U.S. lineup. 

We are also likely to see social video platforms like YouTube, TikTok, and Instagram benefit from a prolonged strike. Their content producers are independent and non-unionized so these platforms will not see a pause in content creation. Viewing hours could easily surge as they did during the pandemic, which will drive more advertising dollars away from traditional broadcasters and toward streaming and social platforms.

Sports and news content will be sold at even more of a premium

Broadcasters with sports rights could do well in this environment because sports content is likely to be one area that isn’t negatively affected by the strike. Broadcasters will likely lean into more active coverage of sports. And they can use the strike as ammunition to defend the high price of sports licensing fees. 

We also predict that news broadcasters will sell advertising at a premium as well. News broadcasters are covered by SAG, but they have their own separate contract. As a result, news programming and advertising supporting it will continue and may even expand. Media like CNBC, NPR, Bloomberg, etc. will be mostly unaffected.

While the full impact of the writers’ and actors’ strike is still very much uncertain, it is expected to result in notable alterations and realignments of advertising investment in the upcoming months. While some may experience short-term advantages due to reduced costs and pre-sold advertising, the long-term impact could profoundly impact advertising investment across media.

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