How to navigate the growing complexity of monetization

Posted by Oscar Bole on

In a world of growing digital content consumption, publishers have become experienced in optimizing their monetization efforts – whether to protect revenue, keep pace with technology developments, or create sustainable business models for the future. But what is the cost of getting to grips with this increasing complexity? With significant and fundamental change afoot in marketing and advertising, how will publishers tackle the rising cost of monetization? To unravel these questions, Torben Heimann, Strategic Advisor DACH at Pubstack animated a conference with prestigious panelists:

  • Alwin Viereck, Head of Programmatic, Ad Technology & Product at United Internet Media
  • Nepomuk Seiler, Senior Software Engineer at Gutefrage.net
  • Sabine Schmidt, Head of Programmatic & Ad Operations at Webedia Gmbh

 

What made monetization so complex today?

Nepomuk: Today we have more than 25 partners, multiple server-side integrations, prebid.js wrapper. So the number of ways to optimize your inventory has grown a lot. You have to make many decisions.

Alwin: There are different dimensions of complexity. For sure there is technical complexity, but we can also take into account the fact that there are many new channels that need to be considered – CTV, for example. Also, the market itself contributes to complexity. We are facing major challenges due to the evolving landscape, for example addressability and identity where browsers in their role as gatekeepers complicate the whole situation.

Sabine: In addition to what was said, we can also mention that publishers need to be mindful of not destroying their core business. Indeed, new layers of complexity are being added to the landscape, so publishers need to learn how to navigate through them, but they should not stop asking themselves “what can I do to be more attractive to my audience and match their expectations.”

The growing number of options that Publishers have to monetize their inventory is, for sure, one of the reasons monetization became so complex. For that reason, it is preferable to have a data-driven approach. Automating as much as possible is important especially for the smaller businesses that may lack resources.  But among all this complexity, publishers need to make sure they do not lose track of their priority which should be about being attractive to their audience and growing it.

 

Why use so many SSPs when AdX buys so much of the impressions?

Nepomuk: If AdX buys most of the inventory, you are likely not doing Prebid right. Prebid and Amazon TAM add huge value. We would probably make half of the money we make without it. Higher demand means higher prices. Even if AdX buys a big portion of the inventory, it has to pay more which is why you should increase the demand.

Alwin: Yield Management is the key to managing a complex setup. You shouldn’t forget the shares you pay for. There are very different SSPs with different shares and Prebid itself is just a framework to integrate SSPs that are not AdX or Amazon TAM. So it gives you diversity. Depending on your size and negotiation skills, you have the opportunity to yield the ad impressions you deliver.

At the end of the day, your ad revenues are determined by the amount of demand you have for it. As Prebid offers a very useful framework for publishers to integrate new bidders, it allows them to increase their revenue. Even if AdX continues buying most of the inventory, it will need to be paying more for it.

 

Do you feel there is a shift in the market from display to video?

Alwin: There are different publishers on the German Market. Naturally, some rely more on video while others focus on display or native. There is no doubt that video has grown dramatically recently, especially pre-roll. If we look at the last two years with the pandemic, it’s amazing to see how, in general many different formats could grow due to the increase in traffic.

Do you think that as publishers, you should consider increasing the amount of video content to benefit from the increasing CPMs of video?

Sabine: There are different ways to create video inventory, Webedia is producing most videos internally with our own resources. So it can be on Youtube, Twitch etc. It is also possible to license content, but this is not something Webedia does.

Nepomuk: We ran tests to determine if people would like to do videos. But for an anonymous Q&A platform like Gutefrage, it is simply not a natural fit for us. We do however have a small property where we are producing videos, but videos are not cheap and you need to have a high reach to compensate for the money you put in.

There is no doubt that video has been taking more and more space on the market. We have reached a time where video ads are more performant than display ads. They have higher CTRs and over 50% of consumers say that they want to see more video content from brands they like. The direct consequence of this is that they will be more valuable and expensive. Depending on their business, some publishers can more easily take advantage of it than others. All websites cannot be a good fit for this format. And publishers also need to consider their size and available resources because producing video content is expensive.

 

What are your main challenges when it comes to monetization?

Alwin: Aside from addressability and identity, the complexity of the landscape. We have prebid.js, the closed ecosystems of Google, Amazon TAM, a direct bidder landscape. As a premium sales house we also have to consider other channels and campaigns. Integrating all of this, without running into issues like timeouts, loading times, etc, is a huge challenge. It leads to the fact that we are switching to a server-side-solution. Also, people don’t want heavy pages or heavy ads loading, it needs to be fast and not controlled by gate-keepers, and for that server to server is the solution.

Sabine: Trying to define your internal product strategies. You need to be flexible and establish different revenue lines next to traditional advertising. We for example are setting up our own e-commerce website, and are becoming publishers and advertisers at the same time, which is really nice because we can use the ad spaces we already have. We are not as dependent as we were on media because we were able to set up different strategies. I think this is something you should take into consideration. It is probably not the best strategy to bid only on something that could be outdated in a few years.

 

On what will you be putting your focus on in the coming years?

Nepomuk: Server side, Native and contextual. By moving everything server-side. Printing the creatives is a huge bummer for the websites, much more than the prebid requests.

Alwin: Taking back control. The publishers & media, in general, have been a bit like sheep. With so many vendors, the control over what is happening dwindles to a certain extent. The privacy challenge we’re facing is also leading to creative solutions that are giving control back to the publishers.

Sabine: You know way more internally than you can ever share, a key for the next two years is to bring the right people together and share the knowledge internally.

The growing complexity of the market and the expectations of users seem to be both pushing in favor of the server-side. This will be a major focus for a lot of publishers in the future. Also, with the end of third-party cookies, all eyes are on the alternative solutions and how they will scale. There are also a lot of hints pointing to the fact that the coming years will see publishers regain control. Most of the solutions popping up are following that direction.

 

What does the ideal ad stack look like?

Alwin: Zero bidders on the client and 100% on the sell side, privacy first, and more control overall.

Nepomuk: Have Everything standardized so you can plug and play. And also have Google on these standards. This would be amazing.

Sabine: SSP capabilities of actually being able to handle contextual targeting properly without blowing up requests and information they are actually sending through the chain

Navigating through the complexity of monetization is truly a challenge for publishers, and it will continue to be in the foreseeable future. It is in the landscape’s DNA to have a great deal of complexity as many channels, actors, and technical evolutions come into play. Publishers can use the long-term ideal ad stack vision as a map to sail through this complexity, thus focusing on the most important matters. These days server-side integration, control, and privacy are some of the most important topics for them. But coping with these evolutions is for sure difficult for publishers whose businesses are, in the first place, naturally more focused on their content rather than on the challenging technological setups.

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