Guaranteed audiences: a publisher and advertiser love story
Publishers are under pressure to boost online revenue, yet marketers complain of wasted adspend and inefficiencies. RadiumOne’s Timmy Bankole wonders if guaranteed audiences could solve both problems.
Publishers received a welcome boost recently with the news that The Telegraph increased its programmatic revenue by 20% and, after a successful trial of header bidding (a method allowing publishers to bid on inventory at the same time, rather than in succession), will grow its programmatic team four-fold.
It’s welcome news because it’s been a challenging time for publishers to grow ad revenue and it shows a major player is making more money.
Things could get even better for publishers with another advanced trading method coming to the fore to increase revenues – guaranteed programmatic audiences.
So, what is it? In very simple terms, this is when a publisher or ad exchange only provides an audience that exactly matches the advertiser’s target criteria. In other words, ads will only be served to people the advertiser explicitly wants to target.
An example may help. Let’s say a sports brand wants to target Manchester United fans aged 20-40 who play golf.
As it stands today, the brand’s media buyer will agree with an ad exchange/Supply platform beforehand to purchase a certain volume of impressions at a certain price – say 10 million impressions at a CPM of £5 within a certain time period.
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The ad exchange/supply platform will then try to find that audience but the reality is they can’t be sure they can meet all the targeting criteria simultaneously, in the time frame allocated.
In our example, it may transpire that only half the impressions served were delivered to 20 to 40-year-old golf-playing Manchester United fans while the other half were delivered to an audience who only matched closely, with one or two of the original criteria (play golf or follow Manchester United or are 20 to 40).
Consequently, the sports brand has decreased the efficiency of half its budget (£25K) on people it didn’t intend to target.
However, with programmatic guaranteed audiences, the exchange agrees to only send audiences that match all targeting criteria. It knows it can provide 5 million impressions based on the number of users in the given potential segment and time period, so that’s the volume agreed and the sports brand only ends up paying £25K and no dilution.
The eagle-eyed among you will spot the obvious downside in our example for publishers in that their revenue is halved (advertisers are no longer buying the useless impressions from them).
However, this ignores two vital benefits: guaranteed audiences can obviously command an incrementally higher price, and advertisers’ campaigns will have a higher ROI due to less wastage – ultimately, they will commit more spend in the long run.
Publisher audiences could be pooled together – which solves the problem of targeted audiences at scale.”
The concept of programmatic guaranteed audiences sounds great, relatively simple and full of common sense – in fact, almost too good to be true in the ‘murky’ waters of online – so why isn’t it in widespread use? Three reasons.
Firstly, not all publishers on their own have the scale to provide enough volume of a specific audience and they probably can’t correctly identify people among their audience to that level of granularity in the first place.
Secondly, the exchanges in the middle are trying to package this up themselves to ring-fence revenue so they’re restricting publishers in on the act whose audience data they really need to make it work properly. Thirdly, it’s not easy to do.
For it to work properly requires merging a client’s first party data with a programmatic company’s first party data so audience segments can be created that work hand-in-hand with the publisher or supply side platform to match the audiences.
This potentially allows publisher audiences to be pooled together which solves the problem of targeted audiences at scale.
The benefits, which I’ve outlined already, are clear to both parties – more efficiency and greater ROI for advertisers for which publishers can justifiably charge a higher premium.
So like any relationship, it’s complicated and requires a lot of work but the rewards can be immense, long-lasting and life-changing.
Digital could certainly do with a healthy dose of romance these days.
Timmy Bankole is head of supply operations at RadiumOne