The Publisher’s Dilemma

By: Scott Knoll

Advertisers have been bitten by the audience bug, and who can blame them? Let’s face it, experience data and audience demographics are a powerful cocktail for direct response marketers and brand marketers alike.   The ability to target users based on current purchase desires, filtered through specific behavioral and demographic segments is very attractive to advertisers.  As new technologies evolve to enable more user insight, the desire to reach specific customer audiences has become the priority for advertisers looking to maximize the effectiveness of their dollars.

The ability to precision target an audience provides new sales opportunities for publishers, but at the same time creates new challenges.  Traditionally, publishers have focused on creating and maintaining quality content that would attract a specific niche audience.  Publishers use the demographic make-up and homogeneous qualities of audience to market to advertisers.  For example, in the early days of my career I worked at Time Inc.  Many of our publications such as Fortune or Time Magazine had an affluent readership base, especially in the Asia region where I worked.  In order to attract high end advertisers like Rolex and Four Seasons, we needed to maintain high audience standards.

The quality of the audience was much more important than the quantity.  Every year, we waited for third party validation that our audience was indeed high end, and we used this as a competitive advantage and an integral part of our sales strategy.

Now things are a little different.  Today’s technology allows us to dissect the audience data in more ways than ever before, and the measurement of user data has become more precise.   Beyond simple demographics, we can now discern when users are at the readiness point in the buying process.  With these advances, advertiser expectations have risen.  They want targeting intelligence across all websites, and want to exercise control over where their ads are placed.

That, as it turns out, is the publisher’s dilemma.  The type of data advertisers are clamoring for is not typically owned or validated by publishers themselves.  Rather, this information is owned by a growing collection of data companies who aggregate across search, display, email and offline sources and then leverage it to optimize advertising online.   So publishers have to deploy a third party to provide more information about their site audience to advertisers.

What’s more, the data practice industry is so new that there are no industry standards in place to validate the accuracy or quality of the data.  Anyone can become a data aggregator and present their data as the best in the business, but there are no guarantees that advertisers will get the level of targeting and reach that they are paying for.

So what is a publisher to do?   Relinquish control over their ad business to third party providers and give the advertisers what they are asking for, or maintain control and potentially lose out on lucrative advertising dollars? Even if a publisher decides to use third party data to target users on its site, the solution typically does not scale well.  The publishers can only target impressions based on cookies with third party data, which limits the inventory significantly. Yet if a data company claims they have a lot of scale, then it means that they do a lot of modeling, structuring and organizing data so that it can easily be manipulated.  This process dilutes the quality of the data, and results in less valuable targeting.

But what about the other elements of targeted advertising?  The good news is that despite the growing emphasis on data sets, context and placement still matter.  In fact, placement is often the most important component of a successful ad campaign.  You can set your sights on a specific target audience, but if they never see your ad it’s not going to make a bit of difference.

Today, publishers need an advertising solution that allows them to target specific data segments based on cookies, but also overlays this data with a virtual “heat map.”   This heat map tells the publisher which pages or sections on the publisher’s site have the highest concentration of a particular audience segment.  For example, advertisers may be looking for users in the market for a luxury sedan, or males 45-55 years old, or and married homeowners with 1 teenage child.  By using this heat map, the publisher can do a more effective job of combining placement with audience data and have a much higher ability to scale.

More importantly, publishers can take back control of their user base and build a sustainable advertising-based business model that will survive in the long term by avoiding having to rely solely on someone else’s audience.   Publishers have enough challenges in the rapidly evolving online advertising industry; they should not have to give up control of their audience.