Q&A with CMO Michael Nevins
Unlock the potential of a loyal audience.
Q: How is ad tech today different than it was 2 years ago?
Michael Nevins, CMO: In 2016, the industry was busy reaping the benefits of programmatic. Now, in 2018, the market has reached its breaking point. The rise of programmatic supported what seemed like an unquenchable desire for cheap inventory at scale. With that came an increase in fraud and a decrease in ad inventory quality. The relationship between buyers and sellers has deteriorated.
But the tide is changing! The trend is moving away from Open Auction and towards direct transactions. Emarketer has estimated that programmatic direct will account for 60% of the market share in 2019. With this shift will come an increase in transparency and improved relationships between buyers and sellers. Some large publishers are already seeing the benefits of the new trend; The New York Times’ programmatic direct revenue doubled between Q2 and Q3 of 2017.
This shift away from Open Auction is also evident when we consider what types of display formats are gaining traction in 2018. The push to improve user experience and quality is the reason we’re slowly seeing publishers move away from highly intrusive formats and towards formats that offer practical utility or engaging content. This is critical on mobile where the tolerance for bad ad experiences is especially low. It’s important to engage and reward a user quickly with a carefully considered value exchange.
We recommend publishers take the longer view and create a sustainable monetization strategy based on the secure activation of their first-party data. When publishers leverage their owned data, they can, in effect, nurture their own “private gardens.”
Q: What’s the current climate like for the average mid-range publisher at the moment?
Michael Nevins, CMO: It’s a scary time for many publishers. The duopoly still has control over the lion’s share of the industry. Facebook and Google will account for over 65% of the US digital ad revenues in 2018, and although teaming up with them can offer publishers a certain amount of comfort, monetizing with Google and Facebook comes with a price, namely a loss of freedom and a lack of control over one’s future. In short, publishers have little recourse when Facebook or Google decides to change the rules of their monetization criteria.
So, publishers are asking themselves, how can I claw back a bit of market share in times like these? We think the best way to do this is through the activation of owned data. Tapping into this audience data will be they key to long-term, sustainable success.
That said, I think quality publishers can be 100% optimistic. What they need to remember is that they can thrive in spite of the duopoly! They can optimize their tech stacks while keeping full control over their business and their future.
Q: What ad tech trends should these publishers understand — and follow — in order to ensure both long and short-term business growth?
Michael Nevins, CMO: Publishers should be thinking deeply about creating healthy scarcity, creating best-in-class user experience, respecting user privacy and focusing more on quality rather than quantity. This becomes even more exciting as the market moves increasingly toward programmatic direct. Publishers who begin to fully control and activate their first-party and location data will win by proposing unique, user-friendly, data-rich inventory that’s not available everywhere else.
Publishers should also focus on taking the steps necessary to reassure buyers that their inventory is authentic. Ad fraud is still a big topic, and the ‘big clean-up’ will continue throughout the year. IAB standards like ads.txt and ads.cert have shown us that the industry has realized the need for the entire ecosystem to come together to fight fraud and improve quality. But these two protocols are just the beginning. Fraudsters tend to be one or two steps ahead, so the conversation will move very quickly to include additional ways to verify and certify authorized buyers and sellers of inventory.
At Smart we are 100% ads.txt compliant. We urge all publishers to keep in mind the benefits of participating in these IAB initiatives. Not only will they bring brand and revenue protection through the prevention of domain spoofing, but they will reassure advertisers of inventory quality, allowing them to buy with confidence.
Clean, unique inventory is attractive to buyers. When coupled with audience rich data, it drives even higher CPMs for publishers.