Media Planning & Buying Websites

Eliminating Inefficiencies in Direct Ad Sales

Posted by Raj Chauhan on October 24th, 2012 at 9:07 am

For publishers, selling via indirect channels like exchanges and SSPs will always run a distant second to selling direct. Premium inventory represents the lion’s share of a growing display market and gives publishers the potential to develop strong, mutually beneficial relationships with advertisers and consistent ROI.  However, the direct sales channel continues to be plagued by operational inefficiencies. In order for publishers to grow, improve their profitability and remain viable, they need more control over their premium inventory and direct selling process.  And operational efficiencies for both the buy and sell side to manage these guaranteed deals are critical to preserve this large source of ad revenue.

That said, no publisher will be able to sell 100% of their inventory direct all the time, and indirect channels offering access to specific content or audience segments have played a significant role as a complementary channel for advertisers to access a publisher’s inventory.

The problem that has arisen in recent years is that all the discussion has been focused on technology and how to utilize incredible amounts of computing power to squeeze pennies out of low value, biddable inventory. Publishers, advertisers and technology providers alike need to shift their focus back to premium, where true value exists yet ad ops issues and inefficiencies continue to go unresolved.

Selling direct today can be an extremely complex and time-consuming process.  With so much back and forth on negotiation, ad creative, reporting, etc, direct sales teams are inundated with busy work, leaving less time for the strategy and relationship building that can lead to better online advertising and ROI.  Plus it's very expensive to maintain the direct sales process and teams.

Today, direct sales account for up to 70% of the display ad market, and marketing budgets will continue to migrate from offline to display, particularly brand dollars, as we see exciting innovations in engaging new ad formats, standardization, improved accountability and more refined targeting.  However, continued technology fragmentation is causing inefficiencies and vendor fatigue for both advertisers and publishers.  Transaction costs for developing, selling and managing display campaigns to direct advertisers is inordinately high (Display costs 5-10x more than a comparable TV campaign). 

Investing in technology that will help make direct sales more efficient for publishers will lead to improvements in this channel that can drive incremental gains that far outweigh the current focus on remnant channels.

We see three key technological improvements that are changing the direct sales game for publishers:

1. Access: This goes both ways – publishers need access to more buyers, and buyers are seeking more relevant inventory. Technology is connecting the two sides by creating more efficient merchandising through a variety of different markets and channels.  While this has largely been focused on remnant, the need is perhaps greatest on the premium side, where sales teams are simply too busy to seek out and engage new advertisers. Publishers should look for solutions that open up new sales channels, enabling them to get in their guaranteed media in front of new buyers.

2. Automation: Technology must address and minimize the operational inefficiencies on the publisher side, and this is being addressed through automation.  Simplifying direct sales means that publishers can realize improved ad revenues without needing to increase resources and costs to service.

3. Control: Unlike selling through indirect channels, the direct sales process enables publishers to maintain control over their premium inventory and user experience.  Control should be built in to any automated system to ensure publishers have final say on pricing, creative, and how inventory is sold in order to maintain the integrity of their sites and the quality of the user experience.

As an industry we have to focus on building and embracing technological improvements for the direct sales side of their business.  That’s where the real value is at for publishers.

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