The Solution is on the Supply Side

Posted by admin on January 8

MarketScale lives at the intersection of content, strategy and technology.  The content we create is written for the B2B buyer journey – essential in driving new traffic, capturing more leads or generally fueling the decision making process.

And while advertising is not one of our domains, we must still respect the role of paid media in enabling the web, and it’s potential for fueling premium content.

However, as online advertising matures, now completely driven by technology, many of the core tenets of publishing are fading fast.


How Technology Is Changing Publishing

The general thesis of sound publishing business for centuries has been to produce a quality product that cultivates a strong following and can be monetized at a premium.  And with better content, comes a larger or more exclusive following.  The publisher’s imperative is therefore to produce better and better material, moving the business profitably upmarket.

In the last few years, that has changed.  While advertising revenue is vital to their businesses, the programmatic ecosystem rewards traffic volume, or in effect ‘quantity’ over quality. 

Before programmatic, online advertising still enjoyed the direct sales models left over from the print days.  It was simple – sales teams pitched and sold ad space loosely based on CPM or other metrics, but largely driven by soft sciences – the quality of the audience, exclusivity of the space, etc.  Much like a realtor ‘arbitrarily’ testing the market for the pricing of a new listing, publishers could explore premium pricing for downright valuable inventory.  Do we need to go back to such chaos?  No.  But realizing that the promise of programmatic utopia has not been fulfilled and publishers are actually discouraged from creating quality content, it is time to look for solutions.

Demand and Supply Side in Technology Driven Advertising

In technology-driven advertising, there are two sides – just like any market – the ‘demand side’ and the ‘supply side’.  Over time, the demand side, led by ‘demand side platforms’ has gotten a lot of the press.  But ultimately, like any buyer, its job is to lower costs.  And so, because our issue is in achieving higher pricing, and encouraging premium content, the answer must be on the supply-side, ideally the defender of yield.

To instantly solve the profit problem for publishers, supply-side platforms could start ‘selling’ inventory at higher prices – way higher, like $50 CPM or more – in direct deals where the audience justifies such a spend.  And where programmatic has long separated the audience from the publications – reaching them wherever they go – the supply side could end that, providing clear opportunities to win audiences at a premium, based on the value of the publication, not the 3rd party data.

The solution for the supply side will be known as much for ‘not’ filling ad space as the opposite.  Publishers should not allow ‘remnant’, low dollar ad buying when their audiences are quantified and premium.  There should be no free lunch, simply put the supply-side should fight harder to communicate the value of its audiences, and make buyers pay up.

When you hear of algorithms in advertising, it’s a fancy way of either lowering spend on the demand side, or hoping you can predict the right data (audience) better than the next guy.  But in true programmatic utopia, these approaches would not be as necessary because the data would be passed through and made available by the publisher, based on long term audience intelligence made better by quality content – not more data pixels.

Addressing Challenges in the Supply-Side

The challenge for the supply-side, is that advocating for quality is at odds with technology built for quantity.  Instead of pitching premiums, the supply side has too often pitched programmatic and automatic which can turn premium direct models into more of a vending machine.  And enticed by the notion of automating the enigmatic and expensive process of selling anything, publishers have bought in over time. 

But as a result, in an attempt to replicate the revenue that could be seen in human-led sales models, publishers have allowed volume-driven, low-quality advertising to pollute their publications.  Next time you see a goofy ad with little relevance, ask one simple question:  is your time worth more than $.002?  Would you pay more than one fifth of a cent to reach you?  Is it worth a penny?  That would be a 500% premium over what they’re paying now, and it won’t happen until publishers regain their audiences and the supply side slows down to focus on quality over quantity.

To see how this should work, just look to TV as an example.  Programmatic stakeholders have long predicted the disruption of the TV advertising model, because programmatic has to win, right?  But TV has largely avoided the technology, opting to employ traditional sales models – while still exploring online content distribution. 

Ads for the ESPN audience don’t follow you over to E! just because.  They instead opt to tailor their content to the channel and the model simply ain’t broken.  Online publishers should do the same thing, and supply side platforms should drive the change, before simple, direct sales experiences a renaissance and sets programmatic back a decade.



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Topics: advertising

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