Publishers have been fighting hard for the last decades in terms of generating revenues, and now in some cases it’s boiling down to how they will survive in an environment with growing supply of self generated content, price dumping and a constant innovation of technology. They are right now beaten up, tired and exhausted in round 12. The question is how they should fight back?
In my previous works as online sales manager for Publishers (Autoscout24), and also been witness to online ad sales strategies in traditional News Editors (Digital versions), I have been able to observe crazy things on the publisher side during these last two decades.
One of the most impacting happening probably was when Jeff Bezos, the guy from Amazon that is an ecommerce platform, bought The Washington Post!
Wait a minute?! Was THE Washington Post not the powerful news editorial that published the Watergate scandal that knocked out, Richard Nixon, the former president of the United States of America?!
Jeff Bezos, an ecommerce store, bought that company?!
I guess that if someone buys you it’s because
1) The owner/s is/are satisfied, want to retire & play golf
2) You need to!
I don’t know if the former Washington Post guys are out playing golf but the truth is that there might be a problem in their business module.
The main problem, I think, has been that traditional publishers have not defended their positions and do not value their own content enough (in online ads the content has been sold in the same manner as any type of self generated content though channels such as Twitter, Facebook, Pinterest etc). A result of that is a serious price dumping situation because the supply out numbers the demand from the advertisers.
One of the reasons for this price dumping is that some unique performance based advertisers with huge spending budgets hypnotized the commercial departments and the short term gains was too tempting for Publishers to say NO! As a media buyer (Active Internet Consulting SL) I remembered that some of my performance based campaigns would get as much as 1/10 of the normal premium price at the end of the month (and we are not comparing with a public rate card)! This “behind the scene” pricing scenario is bad because at the end of the day the word gets spread and there will be a general inflation.
Another reason for bad margins to publishers, is due to the middle men, and the biggest of them all are the MEDIA agencies (top media agencies), that apply their standard module in negotiating high commissions with the publishers. They might be as high as 30% in some countries. This is ridiculous and the publishers should not get involved with this practice! It’s a bad practice because the agency should be the advertiser friend and not do cherry picking with the publishers based on rebates or commissions.
Dealing with online media there are also other middlemen. A very expensive one is the Ad networks. They get as much as a 30-40% for each CPM without really providing any true value, neither for the Advertiser nor the publisher. All they do is to show a portfolio with different premium publishers.
Thanks to programmatic media these middle men costs have been reduced substantially. Now the middle men are mainly TECH companies; on one hand the Adexhanges and on the other hand the DSP´s (Demand Side Platforms). Another “tech middle men” are the ad serving technologies but in general terms this is a very small proportion of the overall CPM paid by the advertiser and they do offer an important value.
Summing up: With an increase in traffic supply and without value your own content as unique comparing it to any sort of self generated content, the publishers willing to commit price dumping’s, and generously handing out margins to the middle men, the result is unsustainable.
So what are the solutions?
I believe that there are 4 ways of fighting back.
A) DATA – “the jab”
B) Private Market Places (PMPs) – “the straight right”
C) Embrace new Techs to create user loyalty - “left hook”
D) Defend your Content – “uppercut”
The most valuable thing in the new programmatic Media era is most probably the OWNERSHIP of 1 party DATA. The owners of this are true Kings. This control should not be lost to others (like handing out your data to 3 party players). Your DATA is the most valuable and it’s yours! It’s so useful and powerful that is works with High CPM and can even be sold at CPC or CPA if worked on well & most important you should control it.
PMP – (Private Market Places)
So if the advertisers used to do cherry picking with any publishers inventory, the publishers need to do the same. Pick your best advertisers and provide them with the best solution. Make sure to have your own tech to avoid the middle men and most important to have the best optimization tools for the advertiser. Don’t forget, if the Advertiser in the new digital era cannot get Results, it’s a lost race.
EMBRACE NEW TECHS
People use new tech in a different way than before, but they are still interested in your content. When releasing an APP for subscription purpose, do not just do it because you have to follow trends. Provide your users with an APP for a unique experience. Make them addicted to your content, make them happy to use it and reengage them. Also if you sell advertising with a mixed business module solution, make sure that the ads are presented as something useful for the users, not just any type of advertising.
DEFEND YOUR CONTENT AND SHOW THE PASSION ON WHAT YOU DO
Self generated content by users is different and should be priced different. Make sure that your content is unique, is a differentiator to others and has a high value for the end user. If you are into “junk news” that any other publish can create then you are in trouble. High quality content has and will always be extremely valuable.
An important statement to all Publishers with great content:
In the new programmatic media era, make sure to defend yourselves and to fight back! Jab, the straight right, left hook, the uppercut and then KO and you will become the heavy weight champ in creating great revenues as a Publisher.
For any information related to the monetization of publisher traffic please contact me. I want to become your coach to make sure to help you to generate more money. firstname.lastname@example.org , @folQ_digitalAds