Getting Horizontal - The reality of a publisher's ad stack.
“Can we get premium, first-look access at your inventory?” This is often how initial conversations start between a publisher and an agency, Agency Trading Desk, Independent Trading Desk or demand aggregator. The automatic publisher response is typically “yes, of course!”.
However, are you being granted the access you believe you are? Do our systems allow for the transparency we’re all so committed to achieving?
Nine times out of ten the answer is, in fact, no. This isn’t because, as publishers, we don’t want to give you access - it’s in our best interest to help you get the results you need. It’s because we find ourselves in a situation where the ecosystem we operate in and the tools we use, aren’t fit for purpose. And as publishers, we need to hold our hand up in acknowledging that we have been, albeit unknowingly, complicit in contributing to this being the case.
So how did this happen? To understand this we need to go back in time by about 12 years.
The root of the problems in the programmatic industry originated when publishers were offered a solution to disparate demand and supply sources that pooled all demand together and attempted to match it to supply opportunity while allowing for buyers to bid on the outcome. This offered a 16% uplift in returns on remnant inventory for a cost of just 15%. For the publisher, this was fantastic. So a unanimous hopping off the bandwagon ensued, as publishers jumped on this concept of a supply-side platform (SSP). Then emerged the latest innovation in tech, and then the next, and the next, all adding incremental revenue, requiring only a light touch integration and offering transparency and ease of use.
Let’s look at the hotel industry for comparison to try and understand this. A room selling above cost is better than a room left empty for a night. Even if sold only £1 above cost, and providing the tenant doesn’t utterly trash the room, then everybody is a winner. Not quite - the cleaner still has another room to clean. We the publishers are currently in the position of the blind hotel owner, whose only point of insight is the cleaner: we don’t know who our guests are, we don’t know why they came or what they were interested in, and most concerningly of all, we don’t know what they were willing to pay or have paid to stay. Added to this, it turns out that the room is in desperate need of a full renovation but we’ve been turning a blind eye in slapping a bit of paint on the walls and buying new cushions.
Unknowingly we became kingmakers, handing over the keys of our own product to the tech companies all while being told not to worry about it and to simply concentrate on user experience and generating page views. Because after all, that’s our job as a publisher, right?
Twelve years on and the penny is dropping for publishers: a mess has been made and our hands are dirty. The technology and solutions aren’t doing what we need them to, they aren’t achieving that true unified and transparent access to inventory that a buyer wants so they can achieve the scale and performance they’re after. To add to all of this we now have GDPR and a potential cookieless world to deal with, but that is one for another time.
These technologies in their truest form were fantastic and the problems they were designed to solve are pertinent to both the seller and the buyer. However, in their current form, they’ve caused a bloated, convoluted, disintermediated value chain. Where the publisher no longer knows who its buyers are, they have lost control of the value and ability to trade their own inventory. They are now making it even more difficult to maintain yields, drive growth and revenue. Mastery of these issues will allow us to produce and distribute the content that users value so much and ultimately prop up our entire industry.
Enter header bidding. We are all, this author included, sick of hearing about header bidding. Especially given every tech partner has their own solution, and of course, they will let everyone else integrate with but won’t integrate with other player’s solutions as they are worried about control and transparency. However, it is important to touch on, as it represents the first step towards achieving an end goal of unifying the auction and being able to react to the market shift in budgets towards a programmatic buying mechanism.
The current evolution that we are seeing to get the weight of the auction out of the browser and off the page, moving it server-side. There are various partners and companies that offer solutions that take the auction server-side and offer far greater insight and transparency which can be offered by a server-to-server integration rather than a tag on-page.
We then enter this weird world where the publisher has to create a parallel universe to achieve what our ad server really should be doing for us: creating a true, fair, unified auction based on the yield the buyer is willing to pay. This then allows the publisher to work towards becoming a meta SSP or ultimately become its own SSP, taking back control of its inventory, understanding its value and knowing exactly who the buyer is and what they want.
This would promote us from being the blind hotel owner, ignorant of what’s happening within our four walls, to the type of owner who has complete, and unified, oversight of their own business. This is the ultimate goal for publishers. There are obvious caveats to this promotion, in the form of unified pricing, bid shading, google and safaris constant changes to targeting. But at least as a publisher you are starting to improve your site performance right?
This solution also gives rise to a multitude of exciting opportunities such as guaranteed audiences that compete with other demand, not only based on the seller’s first-party data but with the all-important relevancy and realtime aspects that buyers need. Surfacing this data and insights made available by techniques such as edge computing, and moving away from our reliance on third-party cookie-based targeting, into being able to deliver outcome-based marketing solutions will see digital advertisings ROI dramatically improve.
Once this point is reached, publishers will engender a more open and transparent conversation about buyer performance and what is working for them. They’ll also have more opportunity to ask buyers the single most important question: “what do you want our audience to do?”, with the knowledge that we have the insights and technology to actually take action on this.
Ad tech is an interesting, and often confusing, world. The good news is that there are solutions out there and ways in which we can reach that end goal. Tech companies, publishers and buyers alike need to agile, continually adapting to the changing market and listening to each other's needs.
The next question is who will be king next.