Anyone who sells advertising has read the countless articles about the rise of programmatic buying. For those who are unfamiliar with the concept, it represents a shift in how advertising is bought and sold online. It’s driven by data, executed by computers, and puts far less importance on the role of a direct human seller. Or, in its most simple terms, it’s an automated system to make media buying decisions instead of doing it manually. As I heard one executive succinctly explain it, “This is about selling dog food to dog owners”.
For publishers and online video creators trying to generate the most revenue, this approach will only deliver, at best, half the solution.
The Trouble With Ad Networks
First, if you’re a publisher, you’ve undoubtedly dealt with countless networks, exchanges and automatic platforms that claim they can get you much higher CPMs, fill all your open inventory, and significantly increase your revenue. But how many of those companies really fulfill that promise? Ad networks that can deliver in material and meaningful ways are few and far between.
Second, the units those networks fill – the standard ad unit or the pre-roll video unit – are nearly irrelevant. Numerous studies have shown that more than 54% of these ads aren’t viewable, and that click-through rates are extremely small, and getting smaller.
Finally, as social media and mobile media consumption continues to rise, there is simply no way to fill all that available inventory, which means CPMs will continue to decline. Meanwhile, pundits always say TV is dying, but its advertising rates continue to rise because of this simple fact – limited inventory, multiple buyers.
What’s A Publisher to Do?
As a publisher, it’s easy to become enamored with your statistics and feel like you may be to able to sell your viewership to a variety of ad networks solely based on your metrics. The idea that this data can provide a highly targeted impression for a brand leads you to believe that you can command a high CPM in return. The issue is there are so many companies that claim to have fantastic data that agencies and brands have become numb. While not in public, they’ll tell you that the difference between most publishers’ data is well, nothing.
Brands and advertisers also are not going to clear their calendars for many companies so they can talk about metrics. Plus, many of the big publishers are being pressured to set up their own advertising exchanges, making it even more difficult for individual sites and creators to make a decent digital dollar.
So, while monetizing this inventory is important, and even necessary to survive and thrive as a publisher, you need to bring unique ideas and positioning to the table. Brand managers and advertisers don’t wake up each day having dreamt about data. They thrive on and fantasize about ideas that move the needle and drive results. Ideas command higher CPMs and revenue. They are what people talk about around the water cooler. And they’re what brand managers want to add to their resumes.
This is why direct sellers are critical for the publishers who want to grow and survive. Sellers who understand their client’s brand, understand the needs of an advertiser, look beyond the numbers, and bring unique positioning and ideas. Standard advertising options executed in staid ways are not going to cut it.
So, my advice for publishers is to figure out your positioning beyond your inventory and impressive metrics. Then, hunker down and find the best strategic sellers you can and come up with unique opportunities for brands and advertisers that can deliver the right results.
And for those publishers who can’t rise above the competition and provide something unique for a brand, work every penny out of those display ad CPMs while you still can.
Sean Ryan is the founder of Catapult LLC, a consultancy that helps digital publishers with strategy and business development, revenue generation and more. You can find him on Twitter at @DigitalCatapult.