Inventory Monetization Strategies
Publishers can often feel overwhelmed when it comes to choosing the best strategy for monetizing their ad inventory. For one, there are quite a few options available on the market, Luma Partners State of the State in Digital Media 2015 mentioned roughly 2500 Supply Side solutions for about 250 Buy Side solutions. On a second hand, outside vetting new vendor’s opportunities, publishers’ day-to-day responsibilities include a wide variety of factors to consider such as optimising net revenues, CPM, floor prices, ad formats, ad quality, fill-rate, viewability, latency and decide on the type of integration to support such as header integration and waterfall; direct, pmp and indirect. The choice of a monetization strategy is obviously influenced by the available internal resources which depends on the amount of unique visitors, page views and quality impressions generated on the website, as well as the primary ad server being used and the various SSP, exchanges or networks to plug in and manage granularly.
Self-serve platforms such as Google AdSense seems like a must have starter solution for publishers and requires no commitment. AdSense works on a CPC basis, where the publisher makes money when someone clicks on the ad, yielding wide range of cpm depending on the nature of the site. Although the revenue share isn’t as competitive as compared to other platforms, the demand is purely unique and if it yields higher revenue than the other demand sources, than they obviously deserve to win the impression. Also, publishers aren’t required to meet a minimum traffic number and it allows them to generate revenue without having to find advertisers themselves. Self-serve solutions (like AdSense) are mostly suited to the need of small to medium sized publishers, otherwise they are most likely part of a publisher stack where they should win 20-40% of the publisher’ impressions. As publishers grow their traffic, they can either sell their inventory directly through an internal sales team or by using an external Ad Network, they can also consider using programmatic solutions (such as BOOST by District M). I’ll elaborate more on the advantages and disadvantages of each of these solutions.
Direct sales: Internal solution
Using internal resources to monetize their inventory is the most beneficial solution for publishers in terms of the ability to set the highest CPM rates, since they are selling directly to advertisers and agencies, resulting in them keeping 100% of the generated revenues. With this solution, publishers also have a granular control over campaigns, ad formats, allowing them to offer rich media or native ads that have higher viewability rates and generate higher CPMs. By giving publishers the freedom to choose advertisers and agencies that are most relevant to their audience and content, selling ad inventory internally helps maintain the quality of their websites. It enables the opportunity for publishers to build direct relationships with each advertiser, by selling them custom ad-placements and guaranteed inventory.
However, it’s not always that glorious as the direct sell through rate vary significantly and can be as low as 10%, meaning in this case that 90% of impressions goes unsold or to indirect sales. Direct sales are also highly affected by seasonality and it’s slightly more complicated to enable various advertiser’s or 3rd party data sets that meet each advertiser’s goal. This method of inventory monetization is best suited for big established publishers that have high traffic volume and a large following base that will appeal to advertisers. It is also quite costly as it requires a strong sales team that will sell campaigns to advertisers and agencies, as well as a competent technical team that will manage the inventory and deliver the sold campaigns. Unfortunately, even with the best sales and tech teams on hand, it is almost impossible for publishers to sell their entire inventory, which leaves them with indirect inventory that makes them miss out on potential revenues.
Direct sales: External solutions
For medium sized websites who have a considerable amount of unique visitors and page views, but who don’t have the internal resources that major publishers have, or for big publishers having international traffic spread globally, joining a local Ad Network can be an interesting option to monetize their ad inventory. This solution is similar to internal sales, but in this case, the publisher trusts an external partner to sell its inventory to advertisers. Since ad networks work directly with advertisers and agencies, the publisher’s inventory can be sold at relatively good CPM rates. What differentiates external premium selling from internal premium selling is mainly the fact that publishers don’t necessarily need internal resources, since Ad Networks manage 100% of their inventory which makes this solution more cost-effective.
Publishers considering this monetization solution must however take under consideration the fact that Ad Networks work on a revenue share model where they take between 20-40% their revenue. Therefore, publishers should figure out whether the potential loss in revenue due to revenue share would be greater than the costs associated with having a team to manage everything internally. Also a common issue with Ad Network is the potential lack of transparency which prevent the publisher from gathering revenue, audience and advertiser’s insight. Ad network also increase discrepancies resulting from passback and increased waterfall layers, which can significantly reduce publisher’s total monetized impressions by 15-30%. Finally, just as the direct internal sales approach, using external solutions such as ad networks can lead to unsold inventory if the ad network doesn’t have the right technology to monetize 100% of the inventory through indirect channels.
While Internal and External selling strategies can be interesting solutions for publishers, they don’t optimally monetize 100% of the publisher’s inventory or they don’t always fully leverage all mechanisms provided through programmatic. In order to maximize their revenue gains, publishers should therefore find a complementary solution that will tackle the indirect inventory issue. This is where programmatic selling should be considered and in some cases could replace an entire direct stack.
Programmatic selling: an effective complementary approach
Programmatic selling offers a different approach: it’s an auction based selling model that uses real-time channels and machine-driven methods allowing publishers to respond to market demands instantaneously. By connecting diverse demand and supply sources with private market places, publishers can engage in one-to-one sales with their best customers.
At District M, we wanted to get rid of the complexity of programmatic inventory monetization by offering a turnkey solution that will meet publishers’ needs. Our BOOST solution greatly simplifies the usual inventory selling process and dynamically maximizes revenue for publishers across multiple demand points. This technology is based on 3 complimentary publisher solutions: Header integration, High impact ad units and 100% fill solution.
Through the Header integration solution integrated in BOOST, publishers can display ads at much higher CPM rates than with other programmatic solutions that rely on the traditional “waterfall”. Although still useful, the sequential waterfall technique is not nearly as efficient at optimizing yield from any given demand set. The Header integration solution increases competition on every single impression by unifying bids and identifying the channel with the highest CPM that matches the publisher’s inventory before the ad server callout. Therefore, publishers can sell at premium prices without losing impressions from passback and without adding latency in their page loads. This solution is one of the easiest to implement on the market and requires minimal resources for its ongoing management.
While BOOST might be more limited than some of the custom integrations available through a traditional direct sales deal in terms of available formats, it still offers high impact ad units such as Catfish, In-Image and Billboard in addition to standard IAB formats. These high impact units guarantee high visibility rates, sell for high CPMs and are a great way to generate incremental revenue by expanding a publisher’s overall inventory set. In addition to all of this, BOOST by District M also integrates the 100% fill solution. It aggregates and manages all demands by connecting major exchanges through API and allocates each impression to the highest CPM through a hybrid model combining real time and time based demand. Therefore, BOOST solution enables publishers to sell 100% of their inventory, every time. No more unsold inventory and lost revenue as it makes the last call more efficient for publishers.
With BOOST by District M, we provide publishers with a deluxe concierge service that offers a mix of complementary solutions that provide high CPM, 100% viewable formats and strong back fill. Publishers can rely on our great customer service, where we treat every case based on publishers’ individual needs. They also have access to our B3 revenue tracking platform where they can manage their inventory and have full transparency on their results and performances. While our model is based of a revenue share, it’s relatively small, fixed and transparent. BOOST is the optimal solution tailored to the needs of every publisher, big or small, it doesn’t require a minimum volume to start and is essentially risk free for publishers. In the end, by giving us access to your inventory, we provide great results that always put publishers on top of the demand curve and we enable them to focus on what is most important to them: building their content and nurturing their audiences.
Programmatic selling is a complimentary but essential solution to internal or external direct selling solutions for publishers who want to maximize their revenue and monetize 100% of their inventory. Thus, it is important to choose the right partner that will work closely with you in full transparency and will assure you use the right yield management technologies in order to reach your goals.