How will a Publisher survive in the new DSP Environment?

So firstly I work for a world renowned publisher and advertising network and the below are my thoughts and not those that are necessarily felt by my employer.

The advertising world shook with nervousness when ad exchanges came to town over five years ago. Publishers and Ad networks viewed them similarly to Jekyll and Hyde. The ad exchange made a grand entrance in order to correct some of the wrongs in the marketplace. One of them was to assist a publisher monetise their remnant inventory. Remnant is a dirty word in the publishing industry one where there is admittance that indeed a publisher has inventory that cannot be sold. On the flipside their business was maintained by the sell of their premium inventory through usually an internal sales force. Somewhere along the way the balance of remnant to premium because imbalanced and coupled with a vast engagement of users to different publishers; their was a crisis on the hands of some publishers. They were losing yield and were forced to look to yield maximisation.

Essentially they should have done this some time ago – but what happens where you start selling one product at two different prices or at least one product with a small differential at two different prices. Most ROI advertisers/agencies will go for the lower price then you come across another dirty word – cannibalisation.

Exchanges were therefore viewed with distaste with low eCPMs, exchange arbitrage commoditisation and the eventual demise of publisher sales teams. I remember arguing against this when selling rightmedia to new seats and even seats that were already seat holders. No matter what I said we did see impressions come in droves and eCPM dip to levels I would not care to comment. This is not because of an exchange it’s actually because an exchange is imbalanced. An exchange has to be viable in a ecosystem that can support and sustain growth. Just like a plant needs the sun and CO2, a advertiser needs a publisher and vice versa. If there is an imbalance the results are also going to be unbalanced. As the exchange grew so did the eCPMs and to see this growth as a newbie in advertising was spectacular. The pleasure in growing ad networks and thereby publishers and keeping advertisers pleasured (with great ROI and predicting the effective click) was simply amazing. So out of distrust came a stage where in some cases we saw some publishing inventory surpass eCPMs for healthy premium ad pricing. The world is looking bright.

However the world is fickle and loyalty to publishers is now a becoming a commodity that is traded upon across a users different stops on the internet. Publishers have proprietary data on their users but as the landscape moves towards open API’s – there is a wealth of data that can be used to trade, hedge and determine the strength of a publishers audience. Is that concerning?

YES!

DSPs and data aggregators have the ability to profile users and instead of buying an audience from a publisher’s determination – the advertiser through a DSP or exchange can optimise to buy inventory or user segments according to their goals. Publishers engaging with such technologies can in some cases be seen to opening up the kimono for all to see. There are many concerns on the privacy of users too.

However the trade off I’ve seen is we are in a world where ultimately those publishers who are serious in business are more likely than not going to see higher eCPMs as the prediction and algorithmic bidding and auction process will value the impression of a publisher higher if they are converting. Of course there will be a publisher shakeout but those publishers who strive to keep content fresh, engaging and enthused should see appreciation.  As DSPs close the value chain and make it more vertical than horizontal – we should see more competitive bids for good publishing inventory and as we all know the highest bid wins.

Its time for the publisher to use their user data to leverage a greater yield. BT is going to be necessary component for DSPs.

APAC has put a toe into the muddy waters of ad exchanges and those who are savvy have adopted them but it’s still a new concept in Asia. The buzz word DSP has been mentioned by many agencies; most are not concerned yet but want to get a feel for the landscape in a year or so. The exchange will ultimately be leap frogged to the DSP in Asia. The market in my mind is composed of two separate markets which makes it very unusual but very opportunistic. There is the mature markets (AU leading this, SG) and then the hybrid (all the others). The hybrid is over complicated and whereas once I would have said that it would takes years to convert them; I’m changing my mind because of the interest in this marketplace. Asia as a whole is a GROWTH market for publishers, advertisers and technology partners.  Many publishers will grow especially in Indonesia which is on the cusp of a tidal wave of internet users. Many companies have M&A activity in Indonesia – with so much western influence coming into the marketplace – will this swell the move towards DSPs? What effect will this have to the new publishers in this marketplace?

Advertisements

About adsolver

Ad-exchange expert with Rightmedia and Yahoo. Strategist on the evolution and ecology of the international display digital platform. Specialties: Evanglising Glocal digital marketing with outstanding experiences in Ad Exchanges, Behavioural Targeting, eCommerce, Multivariate Testing and data mashing. Have worked previously in the following industries: Internet ebusiness solutions multivariate testing Oil and Gas experience and Renewable Energy White-labelling Travel websites Telecommunications Advertising Exchanges
This entry was posted in Uncategorized. Bookmark the permalink.

3 Responses to How will a Publisher survive in the new DSP Environment?

  1. Pingback: Havas Signs KENSHOO SEM Platform; Lotame And OpenAmplify Dance; Calling All Display Ads

  2. Pingback: Behavioral Advertising / Publicité Comportementale » How will a Publisher survive in the new DSP Environment?

  3. AMIR says:

    I WANT TOJOIN THIS FORCE

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s