To secure the health of premium publishing as we know it in a programmatic world, publishers must take command of publisher trading data and demand buy-side transparency.
Part 1 of a 2 part series
First let’s look at the market imbalances...and how we got here.
Historically media sellers were able to devise the value of their inventory through a combination of what was actually sold (via the ad server) and what might have sold (via sales-management and CRM tools). Also, there were fewer, less complicated channels to sell into. By tracking and combining ad server data with CRM/sales management tools, publishers knew where demand originated and could derive a logical pricing strategy. With insertion orders publishers knew who was buying what and for how much, they also generally knew some performance metrics.
Fast forward to today, publisher inventory is distributed through direct channels; multiple exchanges to manage display, video, mobile, as well as sell inventory to platforms like SnapChat and Apple’s new News Stand; a network or two; and other newly emerging distribution channels. For publishers, understanding their demand and managing yield against this channel diversity it is becoming more and more challenging -- if not impossible. These market conditions have made publishers cautious with regards to programmatic channels and has forced them to get smart about using their data.
Just because its programmatic, doesn't mean you shouldn't know
Add to this mood the condition that as this channel fragmentation continues, buyers are simultaneously requesting full transparency from publishers while claiming their own “interest” should be confidential. Buyers are requesting exchanges/SSP’s never share their bid data with sellers, while these same buyers are happily sharing their “bid” data every time they negotiate for an insertion order.
Needless to say, these attempts to restrict publisher access to data about their own inventory (Adomik calls this a publishers “trading data”) as it passes through different programmatic distribution channels prevent the publisher from recognizing the value of its own inventory for programmatic yield management. Such restriction of the flow of information (lack of transparency) in the market foments inherent distrust resulting in adversarial relationships between the buy and sell sides -- just at a time when it should be collaborative.
This opacity is slowing the market just at the wrong time for brands as well. Brands are hungry for quality inventory via programmatic channels and the only way to get publishers to commit such inventory is the assurance that they have the control and confidence required to obtain appropriate value for it. This control and confidence will come only from publishers understanding the true value of their inventory which today requires accessing their trading data. Simply put, as with insertion orders and all other historical channels, publishers need to not budge on the issue of knowing who their buyers are and controlling their trading data. Publishers need to be sure they work with an exchange partner that is transparent and will provide their trading data.
We all want growth...but growth in programmatic depends on market balance
Most people agree that for big brand dollars to continue to shift to programmatic (and for the market to grow), higher quality, more predictable inventory must be available in the channel. Also, most brands would rather see their spend in the hands of publishers rather than toll-takers along the highway (buyers remove risk while directly supporting independent premium content businesses that are secure environments for their brands). So brands want to share some data and certainly want to understand where the money is going, but their buyers (agencies, re-targeters, trading desks, etc.) are trying to claim that buyer trading data should remain proprietary.
These intermediaries appear to believe that the data they have about the client or publishers is the most important “moat” around their intermediary business. Ironically, these are the very players that should be attempting to facilitate more transparency to effect more inventory to be transacted across RTB (they would earn more). Instead, they retard progress by perpetuating information asymmetry and preventing the seller from havingthe confidence necessary to commit the ‘good stuff’ that will grow the market. Again, with command of trading data, publishers can gain the confidence in both inventory and the buying partner so that they can build strong long-term relationships with the buyers that are willing to treat the relationship as collaborative, not adversarial. When sellers have trading data, they can more readily work with buyers to build more successful campaigns. If buyers want healthy, high quality and fraud-free publishers to buy audience at scale from outside of the Facebook-Google Duopoly, this is the path forward:
Appropriately share buyer interest through trading data
Collaborate on how to grow the relationship (and market)
Without these conditions, the current imbalance in the market wilI worsen. As it does, scale across independent, healthy premium websites will eventually be elimmated. While a single cataclysmic event is unlikely, premium publishing as we know it will be vastly different than it is today.
The next post in this series we will examine why the onus is on publishers to make the changes required to balance the market and prevent 'Programmageddon'.