How publisher can regain control and succeed
Relevant sponsored the Scandinavian Programmatic Conference on November 30th 2016 in Copenhagen, hosted by Danske Medier. We took the opportunity to address the financial constraints of the online publishers in the online media sales. We invited CEO Pernilla Boshuis from MatchAds and COO David Pironon from Smart Adserver on stage to discuss the opportunities of how publishers can over win the competition and regain control. You can watch the short video intro and read this blogpost and start regaining control.
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Pernilla Boshuis, CEO at MatchAds:
Pernilla Boshuis, CEO of MatchAds for the past three years, started her online career 15 years ago working with Spray, and have continued on the premium publisher side for 15 years. Pernilla has had positions as Sales Director, Business Developer and also worked with web TV and mobile business on Bonnier. MatchAds is a premium publisher network owned by three large media houses in Sweden and a Norwegian tech company. MatchAds offer Contextual matching ads for middle and smaller companies.
Publishers must create alliances to keep their business
The biggest challenge for local publishers when it comes to ad sales is the competition from the GAFA’s (Google, Apple, Facebook and Amazon). If we just look at Google in Denmark, their revenue in 2015 was app. 376 million Euros according to IAB Denmark estimates. The digital revolution has been great for media consumers and for the four big GAFA-companies. However, publishers have until now lost a major part of their total advertising revenue. Revenue, which now is at Google, Facebook and other digital major actors in the market.
“We all know that most publishers underestimated the growth of the web in the 1990s by making their content free. It took most of them about two decades to realize that they needed revenue to remain solvent. Nevertheless, by that time, ad rates were already dropping. Unfortunately, that trend has continued or even accelerated. In the current environment, it’s difficult for anyone who is not Google or Facebook to make good money,” Pernilla Boshuis explains.
MatchAds is a premium publisher network and the idea of teaming up with the local competitors instead of trying to beat them can be a way to conquer some of the ad market back from the large americans. This model can be an inspiration for other publishers operation in local ad markets.
Co-operate for stronger products
“The ad market is turning into programmatic sales. Data talks when advertisers buy inventory. If more local publishers gather their data and co-operate with experienced tech partners they can offer advertisers a strong product which is more competitive than when a publisher operates alone. Publishers need to build alliances and they have to be honest within the alliance and share knowledge and data and make a strategy together and keep that,” underlines Pernilla.
Programmatic takes advantage of publishers
In the classic model, publishers created an audience – either one with a reach as wide as possible or targeting a niche.
Those publishers had two sources of income – advertising and subscriptions. But because there’s endless supply on the Internet, advertising prices never caught up to print which left publishers in a bind. Most publishers have no real idea where the money goes, because ad tech companies provide so little visibility into the process. This has gotten worse since programmatic went from being a mechanism to get rid of remnant inventory to a mechanism for most inventory.
“The Guardian, for instance, recently revealed that it receives only 30% of the programmatic spending on its content. The rest goes to ad-tech firms. How do they know this? They bought media on their own site, and compared the difference in the price they paid to the price they earned. So as a publisher you have to make clever alliances where you can get a larger part of the programmatic revenue, “ Pernilla Boshuis closes up.
David Pironon, COO, Smart Adserver:
David Pironon joined Smart Adserver in June 2007, initially as sales director for the French market. Before that, David worked for five years at Yahoo! as sales manager and business development manager, and two years as a consultant at Oliver Wyman. David holds master’s degrees from HEC and from Dauphine (Université de Paris IX).
Advertisers demands transparency
David Pironon explains, “Programmatic Advertising gives new possibilities for advertisers to take care of buying inventory and target their campaigns much better than before programmatic. But a part of that is the demand of transparency when it comes to their value for money in ad spending. It can be difficult for many advertisers to get total transparency both from the large American GAFA companies and from media agencies.
Media agencies now demands viewability to publishers or they won’t buy a publisher’s inventory. Because that is what advertisers require. An ad that has not been seen is not worth less, it is worth zero. They expect publishers and their partners to be on the same page in terms of monitoring ad quality. And that there is no reason why publishers can’t demand the same of their programmatic and ad tech vendors as well.”
“So why are you working with partners blindly? You have to offer transparency and viewability to advertisers to keep them in your part of the market,” underlines David.
The way to do it is again to choose the right partners for your programmatic solution. As a publisher, you need to demand solutions, which meets advertiser’s needs. That sounds easy but it is not always so.
“Some publishers are still giving up valuable business insight into others without monetize on the insights. If you knew that your so-called “partner” was buying your inventory for €5 and selling it for €10, wouldn’t you want some of that difference? Stop it by taking control back and get some of your lost business back instead of continue giving it to other actors in the market of programmatic,” David Pironon closes up.