As the decade draws to a close, ExchangeWire has invited thought leaders from across the industry to share their predictions and insight into what 2020 will hold for the ad tech and martech industries. Under the spotlight today is publisher monetisation, which is facing ever-greater challenges in the privacy-first era, though this in turn leads to opportunities which could not previously be realised.
Solving the holy trinity for publishers
The holy trinity of advertising in 2019 was trust, transparency and brand safety. It has not been really been addressed for or solved and will likely be a key theme for 2020. These key themes will still exist across the advertising value chain and the publisher will need to rise to address this from their perspective. Obviously, blockchain would address some of this but it will be slow for the uptake in 2020, as the smart contract protocols are still in infancy.
With such barriers and advertising becomes highly commoditised, publishers will need to differentiate or work across shared ID solutions, which will rise in 2020.
In terms of differentiation, it will be vital for publishers to drive, deliver, and offer user engagement. Content will drive this but it will need to be deeply relevant and native advertising will be prevalent given the consumption of content on mobile devices. Sponsored content and video will drive advertising revenue for publishers.
Publishers will need to be precise on their segmented audiences and effectively carve content to address the differentiated audiences. Elections and economic tensions will continue in 2020 and will drive huge traffic volumes but creative monetisation strategies will need to interplay in order to effectively reward publisher efforts. This type of content will be very relevant for Generation X and Xennials.
Millennials are particularly more interested in social content, environment, and avoiding advertising. Publishers will need to be conscious of ad blockers, which are rising in usage and harness technology, in-app content, and ad formats, to override these trends.
With some large advertisers moving into in-housing and protecting their own first-party data, it is likely publishers that may have more direct conversations with these large advertisers and create more richer content and bespoke advertorials, native advertising will be possible routes to driving monetisation.
Sonal Patel, consultant (business digital transformation, programmatic, and monetisation)
A turning point in data usage
2020 is the year where we will see a true turning point in how publishers use data. Pressures from the ICO and the browsers removing third-party cookies has recently created a lot of uncertainty. However I don’t believe that these are problems to be feared, but instead represent a real opportunity for change.
With the dwindling of the third party cookie, the consumer perception of publishers and brands is more valuable than ever and as the ecosystem becomes more aware of how cookies are used, spend that may have previously gone towards an aggregator or retargeter will shift. The duopoly has also undoubtedly put the industry on edge but the industry will begin to set itself apart with first party data and brand safe environments.
What is worth remembering is that we are not new to data and we understand our audiences. Yes there will be changes coming to the industry but this shouldn’t overshadow our ability to demonstrate our knowledge and expertise to deliver a service that’s safe, transparent and compliant. I believe we will start to see a resurgence of direct programmatic and direct spend as publisher revenue shifts away from the open marketplace. With this in mind, advertisers can restore their trust in publishers and publishers will benefit from monetising quality data.
Alexander Simpson, head of programmatic activation, News UK
Cooperation, realtime & relationships
The harbingers of the third-party cookie-free era have arrived in the form of explicit opt-in (ECJ ruling) and intensified third-party cookie-blocking (Chrome/ITP). At the same time, publishers and advertisers still want more independence from the GAFAs. Accordingly, in the upcoming year we will experience more solidarity and union among those who have recognised that their own first-party data - if enriched properly with second-party and predicted data, and activated in real-time - is just as valuable as that of the GAFAs. Ergo: In 2020 we will see even more mergers between publishers, marketers and advertisers (e.g. Ad Alliance (Germany), Ozone (The UK), Gravity (France)).
On top of that, the enriched data will be used to gain a better understanding of the users and their needs in real-time, through data management platforms ingesting signals and behaviours to personalise the offering and tailor the user experience to the very need of each customer. In return, brands and advertisements placed next to editorial content will benefit from the positive attitude that is fostered through relevant content and a good relationship between publication and reader.
Dr. Jürgen Galler, CEO & co-founder, 1plusX
Ad ops needs to catch up
2020 is certainly going to be a difficult and tumultuous year (in the US due to presidential elections and in the UK due to Brexit related events), and those events will overshadow most of the conversations around marketing, ad tech and user data.
Romeo Ju, president, Sulvo
Commerce companies: The publishers of the future
A new breed of publishers is emerging to challenge traditional open web publishers for ad dollars: commerce companies. These companies boast strong logged-in user bases, healthy first-party data stores, massive scale, and, perhaps most importantly, clear relationships with consumers based on a tangible value exchange. We’re talking about not only traditional commerce players like Walmart, Target and eBay (all of whom are openly exploring ad revenue as a source of growth), but also less-obvious players like Starbucks and Uber. In fact, Uber threw its hat in the ad revenue ring just last month with the addition of ads to its Uber Eats experience.
Commerce companies already have a leg-up on traditional open web publishers when it comes to their first-party data and user relationships, especially as more data regulations like GDPR and CCPA come into effect. Their delayed entrance into the ad game will also prove fortuitous, as they are not dependent on ad tech incumbents and will be able to take a clean slate and can employ the lessons of their predecessors when it comes to integrating ads into their user experiences.
Justin Choi, founder and CEO of Nativo
A delicate balancing game around pricing
As we look to 2020, we can expect a slower, softer advertising market driven by the threat of a wider recession. While these economics alone would undoubtedly impact publisher monetisation plans, it’s important to bear in mind that the challenges and opportunities facing publishers are not universal.
Following the ICO’s Adtech Fact Finding Forum in November, we expect the regulators to take a harder stance on data compliance in 2020 and look unfavourably at open-market programmatic advertising. If the value of open programmatic falls even further than it currently yields for premium publishers, then it’s likely there will be an exodus of premium inventory from the open market. In the new year, we expect to see a growing distinction between the performance of premium, editorially-driven publishers and the growing mass of long-tail content sites.
We will see advertisers shift their budgets to environments rich in transparency and quality, driving increased spend to premium publishers, with those able to deliver audience scale combined with ease of access and use seeing additional upside.
For premium publishers, there will be a delicate balancing game around pricing. As it currently stands, advertisers may pay one price for inventory on a premium publisher site through the open market, but pay 10x that price when dealing with the same publisher direct. I believe advertisers are willing to pay more for the quality, transparency and effectiveness premium publishers deliver, yet the reality is a cost factor of 3x rather than 10x would likely be more acceptable to the advertiser.
Finally, I believe that a closer relationship between advertisers and publishers will lead to a major shift in the reliance on traditional ad tech metrics to assess campaigns in favour of marketing effectiveness measures that can gauge real client success.
Damon Reeve, CEO, The Ozone Project
Opportunity to grow revenues
Data privacy regulation including GDPR – and more recently global privacy regulation POFMA in Singapore – has sparked uncertainty for advertisers and publishers alike. Announcements from big players, such as Google’s recent shift to a first-price auction model, also sent shock waves around the industry. But, despite numerous predictions that publisher revenues will be affected by the Firefox cookie update, we see a great opportunity for publishers to grow their revenues.
As we move into a new decade, it’s time for publishers in particular to take control. In the year ahead, they should pay more attention to the length of the supply chain, focusing on direct connections to monetise audiences that are closer to the main buyer.
Secondly, due to the increase in privacy regulations and the move towards first party data, publishers should be prepared to provide extra security in their data process.
Finally, as the owners of first party data, publishers should understand their audiences sufficiently enough to utilise interest targeting. This, coupled with compelling native content will help advertisers and publishers reach receptive and engaged audiences.
Nickolas Rekeda, CMO, MGID
Diversity, differentiation, and first-party data
Revenue diversity, product differentiation and a focus on first-party data will be key to building sustainable revenue in 2020 and beyond. Publishers and media companies that can build differentiation into their product that goes beyond just brand and voice will attract meaningful audiences, which will, in turn, provide these companies with a valuable asset which they own; first-party data. Owning and operationalising this data will allow media companies to offer more compelling products to brands and advertisers that are hungry for a meaningful connection with a difficult to reach and difficult to persuade young audience of millennials and Gen Z.
Relying solely on ad revenue or relying solely on subscriptions will be a difficult path to navigate for most media companies. Solely relying on ad revenue will force publishers into an over-reliance on a rapidly shifting landscape of companies who don’t have the publisher’s interests as a core part of their business. And relying solely on subscriptions places a burden on publishers to compete for a finite set of dollars in an increasingly fractured and competitive landscape.
Owning an audience and the data that comes along with it allows for diversification in offerings, from consulting, to product development and e-commerce, licensing, unique brand activations and beyond. A strong connection with an engaged audience will provide media companies with the tools they need to continue being a place that brands turn to when they want to understand, reach and persuade consumers.
Kyle Lelli, general manager, The Tylt
Model will shift towards profitable growth
"Next year, we’ll see brands reprioritise what matters most: profitable growth, not just growth for the sake of growth. Historically, growth has meant spending more to build market share on the hope that market dominance will eventually translate into pricing power and eventual profits. But that model will shift. As the cost of user acquisition continues to grow, 2020 will see marketers place a greater emphasis on loyalty. Mary Meeker cited this in her last Internet Trends Report, noting customer acquisition costs might be "rising to unsustainable levels." Building long term relationships with consumers, learning how their affinities for things ebb and flow, and delivering constant improvement in marketing messages will be key to 2020 business success."
Adam Singolda, CEO and Founder, Taboola
The year of a new business thinking
The Swiss NZZ-Mediengruppe recently announced their "Digital-First" strategy for 2020, "Programmatic-First", and accordingly the capacity of highly developed programmatic tech stacks will have an ongoing positive impact on publisher monetization, but beside these reasonable approaches, publishers should bear in mind that 2020 has to be the year of "User-First" as well.
Digital advertising has partly caused damage to our digital media industry that, as a consequence, has led to significant regulations and revenue turbulence. Hopefully we have learned our lessons. Therefore, if in 2020 a publisher is asking the user for their consent, and if they want to establish a forward-looking data-strategy, it is not just about navigating again through tech solutions and grey areas, but to do it in a responsible and user focused way.
Furthermore, we experienced some fundamental changes and ran into an "identity crisis" driven by legislation and technology. Again, publishers and the entire ecosystem are asked to understand this not only as a common problem, but as the opportunity to build trust and establish a long-term new business thinking that is not just going for the next advertising dollar. A new thinking is also required to build new advertising identities and alliances that are build on transparency, collaboration and trust.
2020 will be a non-trivial year and probably one of the most important years for the future perspective of publisher monetisation and we simply have to do it right. Further, in these days we should not underestimate the value and achievement of media diversity, quality journalism, and what digital advertising can contribute to secure its continuity.
Eric Hall, founder, HO|DS – Halls Of Digital Strategies; co-chair, BVDW Focus Group Programmatic Advertising
A people-based approach is needed to remain competitive
Advertisers demand more and more efficiency to their agencies, so their agencies buy more and more programmatically. The biggest publishers have followed this trend and they moved to programmatic in the last years, with automated sales on one hand and on brand content on the other hand.
There are two issues with this model. First, the ability for publisher to amplify their brand content on display, social, video in full transparency for the advertiser. Second, the main KPI a publisher can provide the advertiser with is viewability; the media value has been replaced by the data value. Publishers mostly have navigation data, which is very poor in terms of granularity and reach on target.
The reconciliation of these two complementary approaches implies the use of an ID to replace the cookies. Cookies provide a fragmented and inconsistent view of the user journey, and it doesn’t allow the reconciliation of programmatic and brand content amplification on social, or video, for a publisher.
To be competitive in 2020, a publisher will definitely need a people-based approach for its web users, a technology for reaching these people where they are on the web, or even better an omnichannel approach if the ID is usable in physical and digital environments. Unfortunately very few publishers encourage their audiences to log to access their content.
In 2020, advertisers will demand to be convinced of the ROI on their media spend. Very few players will be able to reassure advertisers on efficiency, with the exceptions of Google and Facebook with their ID and their walled gardens on one side, and the retail media and eCommerce players such as Amazon because at the end they are the one who sells the product.
Alexis Marcombe, managing director, Carrefour Media
The year of innovation
2020 will be the year of innovation for publishers. As our recent Digital Publishers Revenue Index (DPRI) highlights, publishers are recognising they cannot rely solely on monetisation through advertising, with 88% of AOP board members regarding non-advertising growth a high priority in the next year. The media owners that are planning for a future that isn’t wholly reliant on advertising revenue will be the ones in the driving seat when it comes to successfully implementing new and innovative monetisation techniques.
Already we are seeing growing emphasis on online video and subscription revenues, which saw increases of 20% and 14% respectively in Q2 2019, compared to the same period in the previous year. Additionally, there are encouraging examples of publishers leveraging the trust they have built with their readers to provide really tailored products, such as Marie Claire – which identified appropriate retail partners to develop an affiliate commerce product that resonated with its audience. In 2020, we will see more of this – publishers responding to their audiences, while understanding the relevant content and context to ensure a truly engaging and rewarding experience, for all parties.
We have already seen in the past that by working together, through alliances or partnerships, publishers can become an irresistible force when it comes to tackling key industry challenges such as new regulations or emerging technologies. The work I see every day gives me great confidence that we are on course for a stronger, more secure future for our industry as we enter a brand new decade.
Richard Reeves, MD, AOP
Completing the circle
While we will remember GDPR for 2018, 2019 was focused on the toughening of browsers' attitudes towards the third-party cookie. Unlike the GDPR situation, we can wonder if browsers really have to make the rules, while considering that this had a huge negative impact on publishers earnings. For a good 2020 year despite this, publishers have 2 weapons in their armouries:
- The possibility to use cookie walls: giving access to their website could be subject to giving consent. If not, the free press could be jeopardised.
- A better ads identification system without third-party cookies. Connecting the online with the offline user is the aim of digital marketing and the real added value of digital versus other ads channels. We need a unique identification, to avoid the defects of cookie matching and not being blocked by browsers.
Each publisher has to be convinced by these two solutions to better impact on current decisions. Publisher coalitions are the key.
Another expected evolution, in France at least, is the moving from prebid client to prebid server. A real added value to decrease the latency on our websites while ensuring a more open competition for ad monetisation. Indeed, to be totally efficient, prebid server needs one last contribution: better identification. The circle is complete!
Gaël Demessant, director of programmatic and yield management, Prisma Media Solutions
Necessity is the mother of invention
Trust in third-party data has fallen even further in 2019 and the future of the cookie has become increasingly uncertain. Looking forward, as marketers consider how to deliver the most effective campaigns in a cookie-less world, first-party publisher data will fast become more important and valuable than ever – especially for brands and for publishers, such as eBay, that are looking to target audiences based on behaviour and context.
In 2020, brands and publishers should look to harness the powerful first-party data at their fingertips – such as their search keyword data and, if they have it, their e-commerce data for more granular and intelligent targeting. After all, the days of cookies may be numbered, but necessity is the mother of invention – and marketers now have a chance to create cookie-less targeting solutions which are more efficient and relevant for both brands and consumers.
Mike Klinkhammer, director of advertising sales EU, eBay
Supply path optimisation moves upstream
Historically, the focus of targeting and supply path optimisation has been on the advertiser. But in 2020, we can expect publishers to take greater control over these areas, focusing on the supply they are passing to market, in order to demand higher yields.
Whilst we all agree there is a preference for advertising to appear in quality, professional content, this on its own won’t increase yields.
Publishers will increasingly need to consider how they are providing brand safe, data driven, contextually relevant content to advertisers. In return advertisers will be willing to pay more for this.
Luckily, publishers are best placed to achieve this. As the source of content, they can apply technology that looks much deeper into content than advertisers are able to achieve, because there are latency and data processing constraints on advertiser solutions (particularly when it comes to areas such as video). Publishers are able to analyse, categorise and tag content before it is published. As such, they are in a position to be able to offer vetted supply of safe, contextually relevant inventory - for a higher cost.
Pete Wallace, commercial director, GumGum
Transparency, privacy & consolidation
2020 is going to be the year of transparency where the supply path will become more open and clear to the whole ecosystem. Initiatives like schain, and sellers.json are only a beginning and will lead to supply path optimisation, which will ensure that publishers receive a major part of the ad spend. This should outweigh the revenue loss which would be created due to privacy laws which are being built globally and until the industry finds a solution to produce more relevant experiences without infringing user privacy. As ad monetisation gets more complicated - data and machine learning driven, efficiencies of scale will become more prominent leading to consolidation of publisher properties either with media houses or monetisation partners.
Ankit Oberoi, CEO, AdPushup