Interviews, insight & analysis on digital media & marketing

Do publishers need their own bidder?

By Shane Shevlin, SVP Strategic Development, IPONWEB

From marketers pausing ad spend to applying more stringent keyword blocking and brand safety rules, 2020 reinforced how critical it is for publishers to remain agile and creative if they are to protect advertising revenue in a constantly changing media buying ecosystem.

Typically the tech domain of media buyers, a bidder (think nimble DSP that can be customised to fit the needs of each specific organisation) is one such tool (albeit non-obvious) that publishers can use to find new revenue.

Below are three ways this programmatic technology is being leveraged to drive additional yield.

1. Bring programmatic and direct sold campaigns into a single auction

Publishers typically manage direct-sold campaigns (ie those that are not programmatic) through their ad server, which, due to its prioritisation logic, prevents impression opportunities reserved for direct campaigns from participating in programmatic auctions; direct campaigns are therefore delivered before the majority of programmatic ones.

When full campaign delivery for top-tier clients is more important than maximising yield across channels, this may be preferable. But with more and more direct advertising dollars shifting to programmatic, high-value programmatic CPMs can often surpass those of direct campaigns; and preventing all demand from competing holistically leaves money on the table.

By running direct sold campaigns through a bidder and targeting their own supply via deal ID rather than their ad server, publishers allow direct demand to compete in real-time with other programmatic demand channels. This increases bid density and forces all auction participants to find the true value of the publisher’s supply.

This method requires the cost of running direct buys through programmatic channels to be sufficiently offset by the increase in yield. Also, it may not be the optimal approach if it is more important to deliver a direct sold campaign in full to maintain good relations with the advertisers.

2. Create new targeting products based on first-party user data

Premium publishers – especially niche ones – know the pain of inventory being sold out. To resolve this, some publishers add more ad units to their sites or buy low-cost traffic for their own domains. But both these tactics can lead to bad user experience, potentially driving down advertiser performance which may ultimately lose advertisers altogether – a worse scenario than not taking their spend in the first place.

An alternative approach is to adopt first-party data activation and audience extension where the publisher can buy its own audiences on other publishers’ sites; they are extending the ability of advertiser partners to reach those high-value audiences outside of the publisher’s own environment.

The more finely segmented those audiences (think frequent readers of Diabetes-friendly recipes, or users with declared household income of more than £100,000), the more attractive – and valuable – they become to marketers. To increase impact and relevance, as well as advertiser performance, the publisher can combine those audiences with high-value ad formats, brand-safe or verticalised white lists, and/or additional contextual targeting capabilities available in most bidders.

3. Promote ancillary services and other revenue streams

Diversifying revenue has been a major priority for many publishers over recent years with subscriptions, affiliate programmes and enhanced content offerings such as podcasts and paid newsletters being some of the options.

These business lines are often handled by separate internal teams, with some already buying programmatic media (either themselves or through an agency) to drive user action. An in-house bidder allows publishers to experiment with new audience acquisition tactics and compare conversion metrics and costs from programmatic efforts with other channels.

Similarly, publishers investing heavily in affiliate and ecommerce programmes can test driving targeted audiences to product review pages or sections; if the cost of acquiring the customer via the bidder is less than the affiliate payout, the publisher earns incremental revenue.

Sophisticated bidding technologies learn quickly from conversion feedback data, so publishers can continually optimise their activities to drive better outcomes for their business.

Weighing up the benefits

Access to a bidder provides nimble publishers with a new and powerful tool with which to develop new products, generate unique data insights and intelligence, and generally unlock revenue potential.

But operating a bidder has associated costs – both opportunity and actual. Programmatic buying may require up-skilling current ad ops teams, for example, diverting time and attention from other tasks, while bidding platforms also have technical fees associated with buying media.

These costs must be weighed against potential revenue uplift, but for publishers where the maths makes sense, a bidder will give them additional tools and tactics to weather the dynamic storms of managing an ad-supported media business.