An Ounce of Audience Optimization is Worth a Pound of Inventory
By Benjamin Hansz
I believe there is a growing trend among publishers taking back more control over their ecosystem, by getting better and smarter at managing their programmatic inventory. And, it is a (belated and collective) response to these same publishers giving control over to agencies and ad tech companies that judge performance based on volume (impressions, audience size, etc.); as well as giving total control of their audiences and inventory over to third parties.
From DMP marketplaces that buy and resell their data for pennies, to SSPs who optimize their inventory in a black box, premium publishers now rarely get paid what they deserve for their quality audiences and content.
In the last couple of years, we’ve seen a massive adoption of header bidding which allows publishers to increase their fill rates and revenues by opening their inventories to numerous SSPs. However, it is not realizing the full value of the publishers’ inventories as audiences and placements are not linked together. The main downside of header bidding is that one impression can be appearing via multiple exchanges making it harder for buyers to find the best path. However, the buy side is reacting to it by looking into SPO (Supply Path Optimization) in order to find the best direct route to a publisher’s inventory while bypassing bid duplications.
Another area where I’ve seen publishers take back more control is via Yield Management. Yield management strategies seek to increase publisher revenues by first, understanding the bidding behaviors of different demand sources and playing with the floor prices to increase fill rate. But, honestly yield optimization as we know it today based on ad placements has come to an end.
Yet despite all these efforts, we don’t have to look much farther than the example of Facebook and Google to understand why they’ve won a significant part of the market. Their strength comes from the fact that they are sitting on a mine of data: its users and that they’re putting this highly valuable data to work — at scale.
The truth of the matter is that both publishers and SSPs are also sitting on a treasure trove of data. However, the reality is that they are not using this data to its fullest potential — to better monetize their inventory. In practice, buyers are often audience focused while the sell side still has a traditional advertising mindset by selling impressions. Isn’t it time both sides start speaking the same language and deriving more benefit from it?
Thus, it is crystal clear to me that our industry needs a significant paradigm shift by switching from this ad unit framework to a more audience-based performance model.
From my perspective, this shift can be made possible by profiling users in real-time based on how the demand and supply sides classify each user. The sell side can benefit from higher fill rates and eCPMs by switching to audience-based yield optimization instead of ad placement optimization. This audience-based yield optimization technique is not only beneficial for SSPs and publishers but also for advertisers as it is increasing the value for each of their dollars spent programmatically while also delivering more relevant ad experiences for consumers.
Thankfully, publishers are just starting to find more effective ways to wrest back control from the broader ad tech ecosystem in order to get fair pricing without sacrificing quality or data, and we’re excited to be a part of the solution.
Published on Adotas
