A number of larger publishers are switching to PMP deals and selling their ad inventory directly to advertisers, cutting out ad tech intermediaries. This option, however, isn’t open to all publishers, especially smaller publishers with fewer resources. But there is a solution as Michael Korsunsky, CEO, North America, MGID, explains…

Bloomberg recently turned the heads of fellow publishers by announcing its move away from open-market programmatic advertising to focus on private marketplace (PMP) deals; enabling it to direct-sell their inventory with more control, and at a price it’s happy with.

Having recently generated 50% of its revenue from advertising, this shift in strategy signals a show of faith for PMP sales and the control it offers. But not all publishers are in a position, financially or strategically, to make a change like this work, not least because the shift risks an initial decline in ad revenue for the unprepared. Beyond this, survival depends on subscriber growth in the long term – as this is what guarantees premium advertisers.

As advertising remains a key revenue source for many, the mission to strike the right balance between sustainable income and user experience continues. Since publishers have the power to set advertising specifications themselves, holding third-party vendors solely responsible for the finished ad product feels like passing the buck – especially as ad platforms are more than equipped to meet publisher needs, if sellers communicate their vision for ad quality and quantity.

So how can publishers best work with ad tech vendors to deliver quality advertising experiences for their audiences?

PMP: no one-size-fits-all-solution

According to a 2022 PwC report, US digital newspaper advertising revenue is expected to surpass that of print media by 2026, a testament to the growing popularity of digital media and the continued reliance on advertising to monetize content. But while this may reassure some when considering future strategies, opting for PMP deals is not an option for everyone.

Larger publishers such as the New York Times may have the brand awareness and prestige to invest heavily in increasing subscriber numbers, with large enough audiences to offer prime inventory and even build their own SSPs (such as Le Monde and Vox Media), but many smaller publishers are not so ‘lucky’.

Indeed, there are some drawbacks to PMPs, especially for smaller and medium-sized publishers. Not only do they need to ensure that the inventory on offer is seen by — and sold to — the right people, but advertisers may not purchase inventory without the guaranteed impression volume of programmatic.

On top of this, despite a level of automation within PMP deals, modifying the criteria for these deals — adapting minimum bid prices to demand, seasonality, and market trends — is left to publishers themselves. This can be tough on less resource-rich publishers who already need to calculate added time and pressure to research and target specific ad partners while risking the global reach available through open-market bidding.

It’s therefore no surprise that a survey among publishers identified both direct-sold and programmatic ads as priorities for publishers heading into Q4 of this year.

Emphasizing value in a crowded space

While the advent of programmatic greatly simplified the bidding process, the market is not immune to oversaturation or poor-quality players, which is sometimes compounded by opaque industry processes. It would be unrealistic to claim that ads never disrupt user experience or irritate readers — and understandably, publishers do not want to give the impression that they are placing monetization above the needs of their audience.

However, since publishers have the power to define their partners by applying filters during the selling process based on their criteria for quality and need for revenue, the user experience is what a publisher wants it to be.

Content recirculation uses ad placement to keep readers engaged on site, with widgets within articles linking to similar content keeping audiences reading. Publishers can also partner with brands to create sponsored content, helping the latter increase awareness and reach, while the former sustains site traffic. Because these widgets are native placements, they won’t irritate users either as they integrate seamlessly with content.

Power to the publishers

Ads need not necessarily be disruptive or low quality, and not all publishers can or even want to halt their partnerships with ad tech vendors. However, there may be a cull of those who cannot provide real value or facilitate the balance of revenue with aesthetics and a better user experience to benefit all players.

Just because some larger publishers are switching to PMP deals, this doesn’t take away from the potential and importance of quality ad tech intermediaries. Some publishers don’t have the luxury of moving to different advertising models — but what they can do is take matters into their own hands and form direct partnerships with the vendors that can deliver their monetization vision.

With a range of providers to choose from, each catering to a specific set of requirements, publishers need only seek out the right third-party platform that suits their individual needs, serving advertisers and consumers alike — without impacting revenue.

(As published on WNIP)