The Reasons Why Publishers Like The FT Should Consider Building Their Own DSP Technology
by Ciaran O'Kane on 14th Jul 2010 in News
I find it laughable when people in the online ad industry baulk at publishers becoming media buyers. There is a general consensus that media buyers have a specific role in the marketplace and that publishers should just stick to selling inventory. Well that might have been the case a couple of years ago, but things have changed in a big way. Over the past twenty-four months we have not only seen publishers build out their own ad networks (The Daily Mail being the best example) but also augment their reach in weak inventory areas in order to increase ad revenue (note the buying relationship between De Telegraaf and Admeld in the Dutch market). I think it's now time that we see more innovation in media buying from publishers. Some European publishers are sitting on a treasure trove of user data. What if some - particularly those in lucrative vertical markets - looked at leveraging their proprietary data for ad targeting purposes. Not across their own inventory but across media available in their vertical. That would be a powerful commercial proposition for agencies and advertisers. But there are only a handful of publishers that could possibly do this.
I'm not suggesting that pubs should go down the ad network route. I think publishers exploring this option should buy one hundred per cent of display media through the automated channels (ad exchanges, SSPs, etc) forgoing the messy relationship building with pubs in their niche. How might a publisher buy this inventory and target ad using their proprietary data? They could use Invite or AppNexus. But they could build their own. Granted there would be some resource required in building out the technology and hiring people who have experience of buying inventory across exchanges. But the opportunity is there. Not everyone can do it of course - because all publishers have good data. I'd be looking at one of the niche publishers to take the plunge - particularly those in verticals that pay fat CPMs or can generate the most ad revenue. The FT would be the best candidate. It has ridiculously good data which it can use to augment its reach.
How might the FT look to put something like this together?
- Hire a bunch of developers to build out a proprietary DSP solution that will leverage data but prevent leakage
- Bring in some exchange-buying expertise to trade across the automated platforms
- Use a vendor like Netezza to help crunch the data
- Use a dynamic creative provider
- Hire some ad net sales staff to get you on those all important media plans
It sounds all too easy. And it is to begin with. There will be teething problems. Some campaigns won't work - and some will. But the thing to remember here is that the ad net market is worth £250 million in the UK alone, and some pubs are missing out on taking a slice of it. What you also need to remember is that the European exchange ecosystem is slowly being knitted together. Invite can plug into many of the exchanges in Europe, and because of this you will see a lot more centralised media buying in digital. A lot of it will be done from London. Shouldn't the FT be looking at this development as a big opportunity for revenue generation.
But what about sales cannibalisation? Audience-buying will affect my tier one inventory, and I won't be able to demand my fat £70 CPMs from the market. Well, there's something called sales conflict management. Seeing as the FT is running its own DSP it can instruct its sales staff to stay away from certain brands, agencies and advertisers.
Paidcontent reported yesterday that the FT was in the process of launching a niche site on the FT network, as it looks to increase ad revenue opportunities. Why limit yourself to a few hundred thousand in advertising when you could be accessing a market worth hundreds of millions Europe wide? The FT could own a chunk of the media buying market in finance if it wanted. But is owning and running a DSP a bridge too far for any publisher?
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