How does a publisher value its inventory and select the best partners to work with to facilitate the needs of the buyers? In the latest chapter of the serialisation of The Programmatic Handbook, published by the IAB UK, Andrew Hayward-Wright, programmatic solutions manager, Guardian News & Media provides an outline.
The value of a publisher’s inventory
The value of a publisher’s inventory is dependent upon the specific context that can be offered up, as well as how much knowledge the publisher has about its audience’s behaviours across its site.
A premium environment that is layered with a combination of first- and third-party data sets can offer up a true full-funnel proposition for advertisers looking to achieve not only branding KPIs, but also those that can only be obtained through prospecting or retargeting (within a trusted location).
In terms of differing levels of value for varying campaign types available to be bought from a publisher, video can still command the highest CPM yield, due to the current level of demand totally outweighing available inventory. A lot of publishers face the same challenges with both instream and outstream video units, in that they are highly valuable and desired in the market, but are undeniably disruptive for the consumer. As such, inventory tends to be restricted by frequency caps or barred site areas, only pushing the yield of the small level of inventory that is made available up even further.
Mobile sees a continued mass migration of users favouring the small screen on the move or second screening at home rather than traditional desktop/laptop setups. However, despite the fact that a large number of publishers have reached a mobile majority in 2016, mobile spend is not quite following at the same rate, suggesting that a large number of advertisers still consider the formats most often available on mobile screens to be less valuable on these platforms.
There are a few options that could push this value up, including more native and rich units, enhanced location capabilities and the passing of device IDs, which makes this an area of great potential.
Finally, in terms of display, contextual inventory will tend to be valued more highly than behavioural activity, due to commitment for ads to be targeted within a specific channel. Behavioural activity will then be costed based on how complex a data segment is, or how much first-party versus third-party data is layered in to reach a particular audience. For any publisher though, understanding who your audience is remains essential.
Tiers of inventory
The standard setup for many publishers has traditionally been based on a stack model; whereby different types of buyers can gain access to varying tiers of inventory depending on the priority level that the publisher sets them up with (with a view to optimising yield across their whole digital business).
In its most typical form, this will usually see direct IO business at the top of the stack due to the commitments of spend agreed with an advertiser. Any unfilled inventory then waterfalls down to private marketplace (PMP) and internal marketing/traffic-driving activity and then further down to the open marketplace where any inventory still unfilled can be accessed on a run-of-site (ROS) basis only.
As the percentage of programmatic activity continues to increase aggressively for many clients and agencies, however, this stack model is being challenged more and more due to the increased need for PMP activity to be allowed to compete with direct IO campaigns.
Enter header bidding. This technology is being tested and considered by a number of publishers to try and move away from the old stack system in favour of a unified auction. With this, programmatic activity is no longer at an automatic disadvantage with regards to the access of inventory. The ad server is instead allowed to make a call based upon the best yield being offered up for a specific ad placement, regardless of whether the activity is booked in real time or via a managed IO.
This carries its own risks for publishers and inventory management remains a complex balancing act between managing spend commitments and gaining the best yield for their available ad spots. For those not looking to go down the header Bidding route, prioritised deals can always be set up within a publisher’s ad server on an ad hoc basis that won’t necessarily compete with direct activity as such, but will increase the amount of inventory available within an agreed client specific PMP.
Choosing your partners
Given that there are a multitude of partner opportunities in market, picking the right ones can often be a confusing and daunting decision. Do you go with short-term and guaranteed revenue opportunities, or do you set yourself up to survive in perpetuity?
Currently, there is no given in-market solution that is a true one-stop shop that can best service a publishers’ cross-platform requirements. Therefore, the best solution is to partner with key organisations that specialise in desktop/tablet/mobile and app.
Alongside this thought process needs to be the consideration of market representation and how a partner operates. From a publisher standpoint, there are a multitude of SSP or tech partners whose focus might not always align with your own. One of the first questions to ask is: is the solution transparent and does the publisher have control of where their inventory is going and how it is being represented in market?
The integration and development resources required also need to be considered. Each publisher will require a different solution and some may have more resources than others. There are several ‘off-the-shelf’, white-labelled tech opportunities that would be suited to publishers with limited dev resources. Those wanting more flexible and niche set-ups could go down the route of choosing partners that allow for the tech to be customised and manipulated by internal resources. This, however, can be affected by the capacity for partners to integrate with one another; are you able to have an end result that works efficiently together and is easy to make changes as and when they’re needed? Will the solution scale as you do and increase the amount of inventory being put up for sale?
In following this process, the publisher needs to ensure that they have the buyers’ needs at the heart of their solution. This can potentially mean that a publisher will need to take a tech-agnostic approach and be open and flexible to working with new and different partners in order to facilitate the buyer’s needs.
Finally, what level of forward thinking does the partner have? It is all well and good that their technology facilitates today’s market; however, programmatic is one of the fastest-moving media segments around. Today’s tech will be outdated in a year; what is the next big win and how do they intend to stay ahead of the market?