By Kirk McDonald, President
As someone who has lived in publishing my entire professional life, and has had the great fortune of working in esteemed places like Time Inc., Conde Nast, aQuantive and CNET, I’m feeling there’s something terribly imbalanced in media these days: while digital ad spend is growing +15% in Q1 year-over-year according to the IAB premium publishers are throwing up their hands about declining CPMs in display. Facebook has announced that they are partnering with DSPs to automate the sale of their vast quantities of inventory. This most certainly will drive down prices overall. Microsoft’s recent write-down of the aQuantive division has unleashed even more speculation about the future of display. Media companies should be celebrating a renaissance of new forms of consumer engagement with content and yet they are despairing of ever making enough money on ads to support the content. But with this very challenging scenario for display, I could not be more bullish on the power of premium content and its value in making meaningful human connections. The relevance of the professional content publisher/producer has never been greater. The opportunity/challenge is however in their ability to adapt and then adopt to new requirements: publishers need to sell their fundamental brand promise as quality content creators, take full control of their inventory, own their data, sell by audience and look holistically at their sales practices to maximize revenue. You can win, but you have to take control. I feel compelled to share a POV on the smart moves a publisher should make to command the highest value for their ads in this world of undifferentiated inventory. And yes, it’s a “to do list”…why not:
- Understand and embrace what you do best: create content and develop audience relationships. That also means that you’re going to have to decide to stop doing what you don’t do well and that is develop your own tech. Partner for technology with those who have the resources and expertise to scale with your business. Technology innovation is an ongoing commitment and it costs lots of money. It’s a money pit problem for publishers who will never win if they think they can build it themselves.
- You are in the data business, own it, control it. Media companies used to be data behemoths as anyone who remembers Time Life Books or Readers Digest knows. If you are a “premium” content producer you own your elite, hard-earned audience relationships and the data that comes along with it. This is a critical strategic move, so make it soon.
- Brands want audiences, sell that way. One of the challenges of digital is to find efficiencies in scaling direct buying, and agencies need to make money on buying in order to increase spend. In a world of thousands of content providers, publishers should mine and append your audience data to your impression data so that you can offer what brands want to buy: a targeted product that produces returns at scale.
- Don’t buy superior “stacks,” but superior people: It’s not all machine to machine. Software as a service (SaaS) is just that: experienced and trained people are critical to the service element. PubMatic’s team in unique in bringing over 120+ years of publishing experience to this purpose.
- Get out of the land of “acronymity” and algorithms: Forget about DSP, SSP, DMP, ATD…LOL, OMG. Find tech companies that speak in your language and emphasize understandable terms to help you get the greatest value from your assets. Algorithms power what we do but we don’t need an advanced degree in math to sell ads.
- Think holistically about your inventory: Guaranteed vs. Non-Guaranteed. Direct Sold vs. RTB. Audience vs. Placement. These are all artificial attempts to segregate your inventory and in the process they fragment your strategy and execution. For a variety of reasons, I’ve never been a fan of segregation. It doesn’t work in media either, so take a unified approach to inventory and digital asset management.
- Embrace the future of automated selling. Publishers who wall themselves off operate out of fear, and a lack of control. Find an independent platform partner that has a proven track record of innovation and Take Control!
Stop, sell the power of your brands, use technology to properly value the ads and sell them at the speed media is moving. How fast is that? So fast it seems we can never keep up. But we can master it and once again recapture the value that great content can and should hold.