How advertisers use them and what publisher may do about them.
Back in June, I had the privilege of sitting on Joanna O’Connell’s panel at the Cynopsis Digital Big Monetization Summit in New York. A lively conversation ensued which revealed some of the friction between publishers and advertisers. On the one hand, publishers are represented by supply-side partners that are working to sell blocks of inventory at favorably negotiated prices. Advertisers, on the other hand, are represented by demand-side partners trying their best to cherry-pick impressions and acquire them at rock bottom prices. My post-conference thoughts reflected on the difference between the premium impressions we have become accustomed to and the new choice impressions.
Premium impressions come from premium publishers. They are, in fact, defined by the publisher that generates them. Choice impressions, in contrast, occur naturally and can be found anywhere.
Choice impressions are those where the confluence of audience, content, and creative conspire to produce advertiser value.
The impression is choice (as in the preferred cut of meat, or the best seats in the house), because it represents a highly qualified consumer who is currently engaged with content that is relevant to the brand’s message in the creative. Having caught the right consumer in the right place, at the right moment, it doesn’t much matter who published that impression.
When buying a carefully selected block of inventory from a publisher, an advertiser will usually get a high concentration of appropriate impressions, but inevitably a lot of inappropriate impressions are included. While the content is right, some of the audience is wrong. This effect can be mitigated by programmatic direct buying in private exchanges. Through programmatic direct, advertisers commit to purchasing a set number of impressions at a set price, but they are usually allowed to cherry-pick from a larger stream of impressions delivered by the publisher. While this helps with targeting, it does not eliminate all of the wrong audience.
Two factors enable advertisers to choose the impressions they buy – a very wide selection, and the smart technology to define and acquire choice impressions. The wide selection may include some programmatic directly acquired inventory, but must include open exchanges as well. Smart technology should be selected to support the brand’s strategy, goals and the types of campaigns that will be run.
The publishers’ dilemma caused by the advertisers’ new interest in choice impressions is simply stated. The status quo allowed premium publishers to collect premium prices. These publishers now recognize the inevitability of individually traded impressions, but they are understandably reticent about getting on board a program that appears headed toward lower prices. Regarding that reticence, it has been demonstrated time and again through the ongoing digital revolution that enterprises resisting change soon wither and die while those embracing change leap to the top. How, then, should publishers go about embracing RTB without cannibalizing current revenue?
Let’s face it: publisher value is a direct derivative of advertiser value, so let’s return to the emergence of advertiser value at the confluence of content, audience, and creative.
In today’s open exchanges, a very large portion of the inventory is blinded. That is, publishers put their remnant inventory into the exchanges anonymously. In some cases, the blinded inventory in open exchanges is just as valuable as the premium inventory that can be purchased directly, but the buyers have no way of knowing that. The publishers remove their brand, which represents a lot about content, without filling that information gap. Advertisers are bringing their creative to the table, and they are paying for audience data, but, in the face of the unknown, advertisers bid low for the media.
Publishers need to find a way to share as much information as possible about each impression they offer on the exchanges. While they may continue to blind their inventory, they could and should find a way to share other details about the impressions such as detailed topic, length, whether it is listings, reviews, analysis, or breaking news, the skewed attributes of the audience, and so on. When the industry develops a means of sharing this data, publishers will adapt their content to supply the types of impressions that are in demand.
How that last piece plays out is anybody’s guess. My guess is that content will become much more fragmented. Long pieces will still be published, but they will be surrounded and supported by many diverse shorter pieces that are much more narrowly focused.
Advertisers will cherry-pick more and more. They are willing to pay reasonable prices for choice impressions, but they are moving away from using premium to define choice. Now that choice impressions are determined one at a time and can be found anywhere on multiple exchanges, publishers will need to generate choice impressions and supply the data needed for advertisers to determine which impressions are choice.