Online publishing spent the better part of 2011 undergoing a fairly dramatic transformation. With a revolution still underway in platforms and devices, and the constant see-sawing of spending, it’s all but guaranteed that next year will bring more of the same. However, online ad sales are expected to hit $40.6B next year (IDC and PubMatic), meaning there’s tremendous revenue potential for publishers in 2012. Furthermore, 73% of online publishers saw their display ad revenue increase in 2011 vs. 53% in 2009. And that’s really good news.
Now here’s the bad news. The “Big Five” publishers – Google, Facebook, Yahoo, Microsoft, and AOL – attract a whopping 83% of US online ad spend. Of this group Facebook is expected to dramatically expand its share. New players are attracting more revenue as well. According to Business Insider, they are dominated by a few that are not necessarily thought of as traditional “publishers,” such as Hulu, YouTube, and Twitter.
Add to this the reported Q4 digital-spending cuts, and new pressures from RTB and exchanges, and you’ll get why some publishers are starting to freak out. Exchange- and RTB-driven selling more than doubled in 2011, building fears of channel conflict and depressed CPMs. Further pressure arises from the commoditization of inventory and the agency trading desks.
So, what’s a publisher to do? Join the mad rush to land-grab in mobile? (Still not economically sustainable.) Set up a private exchange or funnel all of your inventory through existing exchanges? (Puts too much value at risk.) Whatever publishers’ options might be, flailing around and pivoting from one business model to the next is clearly not one of them.
Based on over 11 years of making money for publishers, we’ve come up with a real prescription for publisher health to face the all too exciting times ahead in 2012:
- Focus on what you’re not doing. Examine revenue channels you haven’t yet tapped. Over the years you’ve invested in great content, photos, slideshows, and videos. Are you fully monetizing all these opportunities? We work with thousands of premium publishers who found vibrant sources of revenue through new ultra-relevant, non-intrusive ad units – such as in-text, toolbars, and dynamic display – that actually enhance the user’s experience by providing contextually relevant, consistently useful brand advertising. Look beyond your ad units, too – maybe you have data that you could monetize, for instance. With so much spend going to the Big Five, how are you going to grab your piece of the pie? Seek network partners who have strong relationships with top 100 brands who will leverage their strengths to get you the best deals.
- Take tech seriously. Smart publishers dedicate people and resources to maximizing yields and by shopping around, trying out different partners, exchanges, and other revenue opportunities.
- Steal from the best. Why is social media so appealing to advertisers? It’s the interactivity, sharing, and engagement. So what can you learn from someone like Facebook, a platform that’s drawing a substantial10% of the US online ad spend? One thing’s for sure, work with partners who can bring social media engagement to your site and audience. Brands are increasingly looking at unique placements such as social media toolbars that push branded social media content to the context of the bottom of a relevant publisher page, where consumers can engage right then and there, without leaving your site.
- You are the new TV. Numbers don’t lie. Video ad spend online is projected to surpass $7B by 2015, US online video viewers will reach 169 million next year, and 72% of publishers say video will bring them the most revenue (eMarketer). There are a number of ways to approach video. You can choose to throw up a roadblock/interstitial and annoy a user into watching an ad. You can use pre-roll and “reward” users with a bit of premium content later on. Or, you can run ads that are neither distracting nor aggressive. Publishers who work with Vibrant provide user-initiated video ad formats that are immersive and engaging, and developed to support consumer choice. Because of this, they perform for brands and publishers and, of course, for users.
It has been a bumpy few years for online publishers, and the roller-coaster ride will continue. But with the potential of new ad formats and new ad technologies, I think that if we look creatively at solutions that deliver for audiences and for publishers and brands, opportunities for all of us will abound in the year to come.