Key Points

  • Ad Quality Control: Even with the rise of artificial intelligence, human review remains critical for maintaining effective, safe ad inventory.
  • Misaligned Incentives: Publishers are often encouraged to engage in shady practices with short-term monetary benefits, even if there are negative impacts in the long term.
  • A Complex Ad Tech Landscape: Supply chain inefficiencies and contradictory ad metrics are largely increasing the complexities of the ad tech ecosystem.
  • What Can Publishers Do? Focus on creating high-quality content that provides genuine value for advertisers beyond what may be considered traditional success metrics.

Ad tech is evolving fast, presenting opportunities and challenges for publishers and advertisers. 

Here are a few quick examples: Google’s latest update, Search Generative Experiences (SGE), has the potential to siphon up to 40% of organic traffic, “walled gardens” are becoming increasingly more prevalent, and the issue of Made for Advertising (MFA) publisher inventory grows more complex by the day.

As a result, mid-sized publishers in particular find themselves at a crossroads.

So, what’s a publisher to do?

We’re glad you asked. 

Tune into our recent Playwire Live episode featuring Playwire CEO Jayson Dubin and Chris Kane, the founder of the authority in the programmatic supply chain, Jounce Media, to dig into the state of programmatic advertising and where they believe the industry is heading.

Prefer reading? Keep scrolling for a detailed summary of the conversation.

 

Human Review Is More Important Than Ever

One of the most significant emerging trends in the industry is the move towards more human direction and management in quality control.

This shift is particularly evident in discussions regarding Made for Advertising (MFA) supply. Chris notes that while MFA inventory may look appealing on paper, "When given a choice, the great majority of marketers say they don't want to deploy their investments there." 

This reflects a broader shift in buyer mindset, where human review is prioritized over automated checks, which can often result in error. Why the shift? Chris notes, “There’s a long history of real-time bidding (RTB) supply being littered with inventory that siphons ad spend away from publishers that create actual value.”

The result? Those on both sides of the programmatic advertising supply chain lose out on revenue. However, the ad tech industry as a whole appears to be taking a much-needed stand against what has become a massive inefficiency, relying less on technology alone which could result in shady practices slipping through the cracks.

So, as advertisers meticulously build their inclusion lists, Chris predicts that three classes of publishers will be impacted:

  • Publishers with low-quality supply will be deliberately excluded,
  • Scaled portfolios will begin to capture excess or increase market share, and
  • Publishers with high-quality, low-scale inventory – in other words, the mid-market – will be overlooked as buyers curate inventory.

To effectively navigate these changes, focus on creating genuine value for advertisers beyond ad viewability and completion rates. While both are traditionally considered the gold standard, each often represents contradictory numbers considering performance is never as high after the first few impressions. After those first few eyeballs, rates and user attention spans typically go down.

While it’s not recommended to shy away from those traditional data points, consider exploring additional metrics that demonstrate user engagement and long-term brand loyalty, which are highly valuable for advertisers.

What Counts as MFA Inventory? 

Unfortunately, MFA lacks a standardized definition. And, this lack of standardization presents an ongoing challenge for the advertising technology industry.

"Publishers deserve transparency,” Chris says. “In [Jounce Media’s] case, we're reluctant to call something MFA unless it is extreme,” continuing, “We’re looking for supply and portfolios that are entirely dependent on paid traffic.”

As a rule of thumb, when evaluating inventory, advertisers should consider the following:

  • Dependence on paid traffic,
  • Aggressive monetization of user experiences (e.g., selling 50 or more impressions per session), and
  • The likelihood that ads delivered on the inventory are not attributed to driving sales for marketers

As a publisher, you should just as critically evaluate your traffic sources and monetization strategies against these criteria. Aim for a healthy balance that provides authentic value to both users and advertisers. 

Misaligned Incentives for Publishers and Advertisers

Let's face it, the world of digital advertising can sometimes feel like a tug-of-war between publishers and advertisers. But why does this happen, and more importantly, how can we fix it?

Many of the challenges faced by publishers and advertisers exist due to a misalignment of incentives. In other words, it’s often not in their short-term revenue best interest to do what is actually in the best interest of the whole community in the long term. 

"My perspective from the buy-side of the industry is that publishers are very rational operators,” Chris says. “Most publishers do the thing that they are financially rewarded to do." This can lead to some questionable practices like labeling outstream inventory as instream to generate higher rates.

While outright fraud will get you punished, the industry's current structure often allows publishers to push the boundaries of what is deemed “acceptable”.

But that is slowly changing. “There is a move toward a reputational system,” Chris says, “not of the site or the app, but the seller. For example, auctions operated by Playwire – do I trust that or not? In that way, it is much harder for a company engaged in bad practices to reinsert itself.”

So while it may be tempting to stretch the truth in inventory representation, given it’s a practice that has worked rather well in the past, it’s time to leave that in the past. As the future shifts more toward a digital advertising ecosystem built upon transparency and authenticity, which can lead to more stable, long-term partnerships, focus on building long-term ad buying trust.

The Complicated Problem of Supply Chain Efficiency 

Another major issue across the industry is the prevalence of dilutive multi-hop supply chains. A multi-hop supply chain is where an ad campaign passes through multiple ad tech platforms or resellers before finally reaching the publisher.

In a lot of cases, this makes sense. For most publishers, if they’re not monetizing through resold auctions, they’re leaving money on the table. But that scenario only exists because people bought into this system in the first place.

As Chris explains, "If no publisher monetized through resold supply chains, DSPs would spend the same amount of money, and more of that money would actually go to the publisher community." 

Despite the potential benefit to the community, individual publishers are often incentivized to use such resellers to maximize their revenue. This creates a collective action problem where individual publishers must continue to pursue short-term gains, even though it harms the entire publisher community in the long run. 

Contradictions in Ad Tech Metrics

While advertisers and publishers strive to be as data-centric as possible, ad tech metrics are inherently contradictory. Take viewability and completion rates for example; they have long been considered the gold standard for measuring ad effectiveness. But counterintuitively, publishers that have the highest audience engagement tend to be the ones that have the worst performance for marketers.

“You can see this in Google search,” Chris says, “in the amount of time people spend there, relative to the dollars Google captures. And you also get the opposite experience – people watching someone play a video game for hours with interstitials and banner ads. They sell a ton of ads, but the ads don’t work for marketers. So, publishers are experiencing tension between creating ad products that drive ROI for marketers versus monetizing inventory in a way that maximizes their yield.”

So how do you deal with this contradictory environment? 

We recommend focusing, in addition to viewability and completion rates, on nontraditional metrics that demonstrate the unique value of your specific audiences to advertisers, like engagement or on-page dwell times. These indicate genuine user interest and brand loyalty, which is pure gold to advertisers looking to implement effective targeted advertising.

Navigate the Ad Tech Landscape with Playwire

If you’re a mid-sized publisher, here is an overview of monetization strategies to help you navigate the increasingly complex ad tech ecosystem:

  1. Seek Strategic Partnerships: Work with ad tech partners who understand the nuances of the industry and have long-standing industry partnerships, which allow them to advocate for your interests in the short and long term.
  2. Focus on transparency: Be upfront about your traffic sources and inventory, avoiding MFA gray-area practices that could damage long-term relationships with premium buyers.
  3. Optimize For Engagement: While viewability and completion rates are important, also consider performance metrics that reflect real user engagement and add value for advertisers.
  4. Understand The Supply Chain: Be aware of how your ad inventory is being sold and consider the trade-offs between short-term revenue gains and long-term sustainability.
  5. Invest In First-Party Data: With the impending loss of third-party cookies, focus on building direct relationships with your audience.
  6. Adopt A Long-Term Advertising Strategy: Prioritize slower but more sustainable growth over immediate revenue through potentially misleading practices.

At Playwire, we're committed to helping publishers thrive, no matter how fast-moving or complicated the digital ad space becomes. If you're looking for a partner to help you maximize your ad revenue while maintaining the integrity of your site or app, we're here to help.

Contact us to learn more about how we can help you thoughtfully and effectively monetize your content.

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