Digital advertising is at a crossroads.
It’s no shock to even the casual observer of the digital ad economy that the emergence of web 2.0, and the transition of the consumer from the desktop to the mobile, has placed the traditional digital publishing business model in peril.
The major tech platforms have captured the attention of consumers in a way traditional publishers could only dream of. A recent survey by Sensor Tower placed the daily average minutes spent by Android users on Tiktok, Youtube, Instagram and Facebook at a combined 169 minutes per day.
These new gatekeepers also have an unprecedented understanding of their users’ preferences through their choices to swipe, stop, replay and skip, helping make them highly effective environments for targeted advertising. The enormous scale of these platforms also mitigates the biggest potential downside of being too specific, which is too small of a target audience.
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The perceived value of scale / targeting has also reinforced another myth that has wrought damage to the revenues of traditional publishers within the open internet, and that is the idea of the publisher “long tail”. For too long marketers have been intoxicated with the idea that there are hundreds of thousands of viable websites and blogs, all accessible through programmatic advertising, that provide the heady cocktail of targeting at scale, with low CPMs.
Why target your ideal target consumer on something as the venerable (and comparatively expensive) as The New York Times, when you can reach them for next to nothing on a vast array of lesser known and much less costly sites?
If it seems too good to be true, it almost always is.
The perpetuation of this myth has contributed not just to the defunding of traditional publishers but created the conditions for bad actors to commit billions of dollars of ad fraud. Botnets and click farms have been more than happy to help square the spreadsheets designed to keep smiles on the faces of marketing procurement teams.
All of this has wrought huge damage on both readership and advertising revenues for publishers, and that is before we even get into the threats of generative AI and the loss of signal as consumers opt out of surveillance marketing. So, what can be done to help promote the health of the digital content publishing ecosystem?
The role of the buy side
With so much change on the horizon, the opportunity exists to evolve the KPIs with which digital advertising effectiveness is judged. Impressions and clicks are outmoded and ineffective. Over-reliance on these metrics have contributed to fraud and waste, and new methods of measurement could open the door to a better understanding of the value of adjacency to content. Attention measurement providers like Lumen, Adelaide and Media Science need support from the buying community to help these alternative methodologies break through.
Additionally, agencies, marketers, and procurement teams would benefit from looking at advertising investment, and performance in a more holistic way. As with much in business, it comes down to incentives. If a media agency is judged by a client’s procurement team purely on how cheaply they can buy media, they’ll find the lowest cost impressions they can, an issue that is exacerbated by principal trading models. Procurement teams must finally accept that quantity comes at the expense of quality, and that not all impressions are created equal.
To this point, brands can help to safeguard their buys by establishing processes that encourage direct buying (Direct, PMP, PG) or show preference to platforms with direct integrations. This will help to ensure their dollars are going towards the most valuable impressions, those most likely to be actually seen by a engaged, human audience.
Agencies and clients can also help to support the publisher ecosystem by taking a good look at where their digital display and video budgets are going, transitioning to the curation of publisher allow lists, rather than building blocklists. Recently The Trade Desk and Sincera have helped to legitimise adoption of this approach through their recent publication of their qualitative ranking of sites on the open internet. While it’s still probably a little limited for some brands, it’s a step in the right direction, and at the very least encourages debate.
The role of publishers
You could argue that the first chokepoint of the modern internet was built by Google. Its absolute dominance of search rendered it a toll booth between internet enabled consumers, and the businesses that wanted to reach them. This included the publishers.
Enamoured by the surges of traffic sent their way, they saw Google as a trusted ally, failing to recognise their share of the ad revenue was quickly being siphoned away, as search (and the appeal of last click attribution) began to dominate the share of ever-expanding digital advertising budgets. Additionally, with Google all but owning the infrastructure on which much of these publishers derive their programmatic ad dollars, even more margin headed the way of Google, at the expense of their own ad revenue.
Going forward, these publishers have a duty of care to recognise that their legacy competition is no longer their biggest threat. Only through some degree of collaboration on both alternative measurement and product standards can they collectively compete with the might of the platforms.
Currently many product teams at major publishers develop unique proprietary ad assets to differentiate their products from that of their publisher contemporaries. I would argue that doing so actually risks making them less competitive compared with the platforms, who have uniform products with clear success metrics that can be served at enormous scale. Only once the premium publishers have new, more performant products that are constant across the industry will they collectively have the scale, and the convenience for the marketer, to compete.
There is no putting the genie back into the bottle. The rise of social has created an expectation in marketers and their agencies that they can scale digital campaigns easily and conveniently. Having to build and adapt separate unique assets to operate across hundreds of publishers is not easy, convenient, or for that matter cost effective. In the face of this it is completely understandable that marketers would just reach for the “easy button” and send more dollars in the direction of Meta or Youtube.
Only the collective reach of premium publishers makes for a viable alternative to Google and Meta, so premium publishers could benefit from prioritising new asset types which can be executed and measured across the premium open internet uniformly. Products for which success is also not necessarily measured by a click.
With the fate of cookie-based targeting now in the hands of Google’s users, and the long-term ramifications of generative AI search on the publishing industry still largely unknown, there is no doubt that change is on the horizon. Despite the fears, this change does not have to mean a further degradation of the ad-supported, open internet.
I believe that this crossroads represents the opportunity for a genuine rethink, and a chance for both publishers and advertisers to come closer together and to break free of some of the business-as-usual practices that have not adequately served either party for some time.
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