Programmatic Archives - AdMonsters https://admonsters.com/category/programmatic/ Ad operations news, conferences, events, community Wed, 04 Sep 2024 13:35:59 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 How Contextual Analysis Shapes Political Campaigns: Insights from GumGum’s Hailey Denenberg https://www.admonsters.com/how-contextual-analysis-shapes-political-campaigns-insights-from-gumgums-hailey-denenberg/ Wed, 04 Sep 2024 13:35:59 +0000 https://www.admonsters.com/?p=660466 GumGum’s latest analysis reveals how contextual advertising tools reshape political campaigns by uncovering significant media trends and sentiment shifts, offering strategic insights for tailoring messaging and targeting. 

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GumGum’s latest analysis reveals how contextual advertising tools reshape political campaigns by uncovering significant media trends and sentiment shifts, offering strategic insights for tailoring messaging and targeting. 

This recent political season has been full of twists and turns, and that doesn’t seem to be changing anytime soon. We’re all looking for ways to contextualize this presidential election cycle to keep our heads wrapped around what’s happening. 

A recent analysis by GumGum sheds light on how the media portrays Vice President Kamala Harris and Former President Donald Trump in political discourse. Utilizing their advanced contextual advertising tool, GumGum examined over 5 million pages of political content from late July to uncover trends in media coverage and sentiment. 

The findings reveal a significant disparity between mentions and sentiment: the media mentioned Donald Trump more than 1.7 million times, while Kamala Harris was mentioned around 1.36 million times. Notably, Kamala Harris’s media presence surged by 388% on the day of her candidacy announcement.

We chatted with Hailey Denenberg, VP of Strategic Initiatives, Data at GumGum, to explore these findings and how contextual advertising can help political advertising campaigns.

Leveraging Contextual Analysis for Political Campaigns

Andrew Byrd: Why did GumGum decide to conduct this study? What were your goals, especially in relation to your contextual tool?

Hailey Denenberg: Our contextual technology, developed over the past 15-16 years, uses computer vision and natural language processing to understand content as a human would. With the upcoming political campaign, we wanted to leverage this technology to track trends over time.

Given our extensive programmatic integrations with large platforms like DSPs and SSPs, we have a vast amount of classified content at our disposal. Following Kamala’s presidential announcement, we found it particularly interesting to analyze how the open web and editorial content discussed Kamala versus Trump over the last two weeks in July. We focused on mentions and sentiment, aiming to understand how each candidate is perceived and discussed in content.

Understanding how different editorial voices and platforms perceive and talk about each candidate, especially in terms of sentiment, provides valuable insights into the broader public discourse. Our goal was to use this analysis to uncover trends and patterns in how content about these candidates is produced and consumed, ultimately offering a deeper understanding of the political environment through the lens of digital content.

AB: The upcoming election is full of unexpected developments, especially after Kamala’s recent announcement and the campaign’s strategic execution. Given this dynamic, can you explain how contextual analysis helps understand political coverage?

HD:  Contextual analysis has many applications, especially in presidential campaigns. Advertisers should stay updated on how content is trending, positively or negatively. Think of it as playing offense and defense. For instance, if mentions of Kamala’s opponent, Trump, spike negatively, her campaign can play offense by surrounding that content with positive messaging about Kamala.

On the other hand, they might want to avoid any negative mentions of Kamala to keep the messaging streamlined, which is more of a defensive strategy. Understanding these content trends as different announcements unfold allows campaigns to use advanced contextual targeting. They can target all positive or negative content that mentions specific candidates, leveraging this analysis to shape their messaging effectively.

AB: How can publishers benefit from these technologies?

HD:  Yes, publishers can significantly benefit from contextual technologies. For example, news publishers can strategically package their inventory by grouping positive political news and offering it to brands comfortable with political content but wanting to avoid association with sensitive issues like abortion or immigration. This allows them to monetize content that aligns with the advertiser’s brand safety requirements.

Advanced contextual technologies not only understand the sentiment of the content but can also identify and filter out specific sensitive topics that an advertiser may want to avoid. This capability is crucial for maintaining brand safety while still allowing advertisers to participate in positive, relevant conversations.

Addressing Brand Safety Concerns

AB: At our last conference, there was a significant discussion about brand safety. Advertisers naturally want to avoid being associated with certain content, but publishers face revenue challenges due to these restrictions. How does GumGum approach brand safety, especially in contextual advertising?

HD:  Brand safety has become even more critical recently, especially with the news around the dissolution of VM and GARM. While we align with the GARM framework, we’ve also developed our custom threat categories beyond the usual “Dirty Dozen” like violence.

This is important because while positive contextual targeting aligns with preferred categories, there’s a strong demand for blocking or negatively targeting specific categories. Where GumGum stands out is in video analysis. For instance, in political advertising, which is huge for TV and CTV, most providers struggle to analyze what’s happening within the video content. 

However, our advanced video contextual technology allows us to explore the complete audio transcription and perform scene-by-scene or frame-by-frame analysis. This helps us determine what parts of the video are brand-safe or suitable according to our established threat levels, ensuring more precise targeting and reducing over-blocking.

Reaching the Right Audience and Environment

AB: How does contextual advertising help political ads reach the right audience in the right environment?

HD: At GumGum, we focus on placing ads where they are most relevant, using a deep understanding of content. For example, if someone is reading an article about the election and sees an ad with positive messaging about a candidate like Trump, it aligns with what they’re already thinking about. 

This increases the ad’s effectiveness, especially when combined with geo-targeting in swing states. It’s all about reaching consumers at the moment they’re considering a topic, which can influence their actions.

AB: Does your approach to contextual advertising change depending on whether it’s on mobile, desktop, or other platforms? Or is there generally much overlap?

HD: Generally, there’s significant overlap, as reaching the consumer in the right mindset is often based on the content itself, which tends to be consistent across devices like mobile and desktop. However, attention models can vary depending on the environment. We have different panels for mobile and desktop, and we’re beginning to explore video. While I don’t have definitive data yet, it will be interesting to see if there are differences in optimal attention times across these environments.

AB: What final advice would you give to advertisers and publishers considering political advertising and contextual targeting?

HD: I advise them to gather as much data and insights as possible from various sources. This will help you uncover unconventional ways to position your brand or supply. Instead of sticking to obvious choices, explore new audience segments. For instance, while Nike might seem like a fit for sports content, insights might reveal it’s also popular in Home and Garden content due to a current trend. By broadening your perspective, you can enhance your targeting strategy and reach new audiences more effectively.

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How Fandom Is Mastering the Art of Addressability and Privacy With an Assist From Intent IQ https://www.admonsters.com/how-fandom-is-mastering-the-art-of-addressability-and-privacy-with-an-assist-from-intent-iq/ Fri, 30 Aug 2024 15:28:05 +0000 https://www.admonsters.com/?p=660062 With cookies on the decline and privacy on the rise, publishers and tech leaders are rewriting the rules of identity resolution. Insights from AdMonsters Publisher Forum Boston reveal what’s working — and what’s not — in the quest for sustainable identity solutions.

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With cookies on the decline and privacy on the rise, publishers and tech leaders are rewriting the rules of identity resolution. Insights from AdMonsters Publisher Forum Boston reveal what’s working — and what’s not — in the quest for sustainable identity solutions.

Identity resolution has become a Rubik’s Cube that everyone’s trying to solve.  

At AdMonsters Publisher Forum Boston, we got a front-row seat to the latest strategies and challenges in this space, thanks to a lively session with Christine Lee, Director of Data Partnerships at Fandom, and Tamir Shub, VP of Business Development at Intent IQ.

Addressability Meets Privacy: The New Balancing Act

Let’s face it: the identity game is rigged. Publishers are caught between the rock of addressability and the hard place of privacy. Lee laid it out clearly — Fandom, the world’s largest fan platform, is navigating a minefield of fragmented regulations and inconsistent user behaviors across devices and browsers. Think of it as trying to juggle on a tightrope while the wind’s picking up speed.

“We’re dealing with different browser types — Apple’s ATT, Firefox, Chrome, Safari — and each has its own set of rules,” Lee explained. She added, “It’s like trying to juggle different user behaviors across desktop, mobile, and mobile web while keeping an eye on the privacy landscape, which is extremely fragmented, not just globally but even within the U.S.”

WITH THE SUPPORT OF Intent IQ
Intent IQ is a next-generation Identity resolution global leader, enabling cookieless monetization, attribution across all platforms.

Whether it’s Apple’s ATT or the ever-shifting sands of state-level privacy laws, Fandom is testing identity solutions to find that sweet spot where addressability meets privacy without losing sight of either.

Fandom’s Secret Sauce: Testing, Testing, and More Testing

But, with over 100 ID solutions on the market, not all options are worth your time. As Lee pointed out, “We’ve leaned into testing a variety of ID solutions in the space, including Google initiatives, Amazon initiatives, and our partnership with Intent IQ. But it’s difficult to compare apples to apples because every vendor has a different methodology.” The real challenge is figuring out which ones move the needle.

Fandom has actively experimented with many ID solutions, but they’re not just throwing spaghetti at the wall to see what sticks. The key is to be selective — testing the ones that make the most sense for their audience and business goals.

By working with Intent IQ, Fandom saw revenue uplifts from 55% to a whopping 140% across different properties, proving that the right approach can help publishers thrive in this new identity landscape. But it’s not just about the numbers. Lee emphasized the importance of comparing these results side-by-side with traditional methods — a task easier said than done. Still, Fandom’s commitment to rigorous, strategic testing sets them apart from the pack.

Identity Graphs: The Backbone or the Achilles’ Heel?

If identity resolution is a puzzle, then identity graphs are the pieces that need to fit together perfectly. But, as Shub pointed out, not all graphs are created equal. The crux of the issue? Accuracy. Without frequent updates and a reliable truth set, you might as well be hiking with a faulty compass.

“Identity solution infrastructure is founded on its identity graph. But the accuracy is only as good as the graph and the data it uses,” Shub stated. “Without frequent updates, the data becomes irrelevant and misleading. That’s why refresh rates are critical.”

And let’s be honest: no one knows what a post-cookie world will look like. We’re all betting on a hypothesis. The regulatory landscape is murky, platform decisions are unpredictable, and consumer sentiment is a moving target. In this climate of uncertainty, it’s easy to get swept up in solutions that might not hold up under scrutiny.

There’s an urgent need for a standardized way to validate these graphs because trusting data without validation is like betting on a rigged horse race. It’s a gamble, and not one publisher can afford to lose. As Shub pointed out, “Currently, there’s no tool available that can validate data accuracy on a household level ID or person level ID.”

ID Bridging: A Savior or a Mirage?

With the deprecation of third-party cookies looming like a storm cloud, ID bridging has stepped into the spotlight. But as with any tech innovation, it comes with its share of controversy. Critics argue that ID bridging while promising, is fraught with transparency issues, potential fraud, and ever-present privacy concerns. Some in the industry see it as a Band-Aid on a bullet wound — helpful in the short term, but not the long-term solution we need.

ID Bridging is almost directly correlated to the impending demise of third-party cookies. While publishers and tech companies scramble to maintain addressability, there’s growing concern that with no universal standard, ID Bridging could create more problems than it solves. Shady practices, lack of transparency, and fragmented user data are just a few of the issues that put the buy side on edge.

Yet, this is where Intent IQ aims to stand out from the pack. Their technology is built with transparency and accuracy at its core. Beyond following the new IAB standards, the ad tech vendor sets a high bar for others to meet. By ensuring their identity graphs are refreshed every 48 hours and maintaining over 90% deterministic accuracy, they’re working to shut down skepticism and build trust on both the buy and sell sides.

The Buy-Side Perspective: Scaling the Heights with Alt IDs

While publishers are busy fine-tuning their strategies, the buy side faces another set of challenges. Shub gave us a peek into how agencies grapple with the scalability of alternative IDs. The promise is there, but the execution? Not quite hitting the mark — yet.

“Agencies report that alternative IDs didn’t generate the results they were hoping for,” Shub noted. “They’re saying the solution was promising but lacking scale. It’s not just about scale; it’s about having the expertise in identity — specifically.”

Intent IQ is working closely with agencies to overcome these hurdles, with successful campaigns already showing significant performance gains. “For example, we’ve delivered a successful campaign with Involved Media, leading to a 77% increase in leads for an education client,” Shub shared.

It’s a tough climb, but the right tools and partnerships are helping the buy side make headway.

Takeaways for Publishers: Test, Partner, and Evolve

The identity resolution space isn’t just evolving; it’s mutating at a breakneck pace. For publishers, the mantra is clear: test relentlessly, choose your partners wisely, and stay agile.

Lee’s advice? Don’t just look at the numbers—look at the whole stack, and make sure you’re not comparing apples to oranges. “Continue to test various solutions, and make sure when you measure, you’re looking at your entire stack, not just certain demand channels,” she emphasized.

And as Shub pointed out, identity solutions should work for everyone involved, creating a win-win situation for both publishers and advertisers. “Identity is sustainable as long as it works for both sides,” he concluded.

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The Cash Crunch Conundrum: How Extended Payment Terms Stall Ad Tech Innovation https://www.admonsters.com/the-cash-crunch-conundrum-how-extended-payment-terms-stall-ad-tech-innovation/ Mon, 26 Aug 2024 19:31:43 +0000 https://www.admonsters.com/?p=659900 Discover how extended payment terms are stalling ad tech innovation as credit tightens and brands like Keurig Dr Pepper push for longer cycles. Explore the ripple effects on vendors, agencies, and the entire ad tech ecosystem, and learn about alternative financing solutions that could offer a lifeline in this challenging landscape.

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Discover how extended payment terms are stalling ad tech innovation as credit tightens and brands like Keurig Dr Pepper push for longer cycles. Explore the ripple effects on vendors, agencies, and the entire ad tech ecosystem, and learn about alternative financing solutions that could offer a lifeline in this challenging landscape.

New platforms, data-driven targeting strategies, and cutting-edge measurement solutions are the lifeblood of the ad tech industry. However, as credit remains tight, payment terms from major advertisers have gotten longer — especially thanks to the growing SPO trend and more intermediaries going directly.

Unfortunately, longer payment cycles are becoming more common, threatening to stifle momentum and create additional cash constraints for companies powering the next era of ad tech.

Keurig Dr Pepper’s Controversial Move: A 360-Day Payment Term Shockwave

The most notable example came from Keurig Dr Pepper (KDP).

In 2023, the beverage giant requested extended payment terms (up to 360 days) from its agencies. The 360-day terms required agencies to wait up to a year to receive full payment, but they also offered low-cost financing so they could access funds sooner. Suppliers could self-fund the requirement or participate in KDP’s Supply Chain Financing Program with Prime Revenue (a capital solution).

As is usually the case, the closer to the advertiser a company is in the supply chain, the longer the payment terms. However, this was an unheard-of proposition in the advertising ecosystem. So much so that these terms were highlighted and passed around within the industry, gathering backlash from thought leaders and the media about the potential negative consequences and concern about the precedent it would set.

Theoretically, the extended payment terms could have created a significant ripple effect throughout the ad tech ecosystem – and it was an eye-opening moment for many.

Downstream Effects: Vendors and Agencies Struggle with Extended Payment Terms

When a brand like KDP demands longer payment terms, the burden falls on the vendor and inevitably trickles downstream to their supply partners. The vendor must pay upfront for ad space, media buys, and the technology fees associated with running the campaign.

Then, they extend terms to their vendors, albeit not usually commensurate with their terms, and raise rates or margins to offset the newly added costs they’ll incur. This upfront cost creates a severe cash flow strain for vendors and agencies, especially smaller or independent shops with limited access to capital compared to their larger competitors.

"The lack of liquidity makes them more dependent on cash flow and less likely to take risks they otherwise would have, severely limiting their growth potential and ultimately stifling momentum at a critical time."

With cash tied up and waiting for client payment, supply partners have less to invest in areas critical for long-term success. This is referred to as opportunity cost, or the cost of choosing one option over an alternative that may have a better yield. When resources are limited, this becomes a much more pressing quandary, and opportunities for growth, innovation, and other initiatives take a back seat.

Companies may be forced to make hard decisions, like making payroll or taking on new business. The lack of liquidity makes them more dependent on cash flow and less likely to take risks they otherwise would have, severely limiting their growth potential and ultimately stifling momentum at a critical time. 

Reality Check: Liquidity Challenges in Ad Tech

In some form or another, payments have long been a central concern within media and advertising. In many ways, payment trends serve as an industry barometer, often highlighting the broader health of the market. Demand partner payments, or lack thereof, have shaped ad tech throughout history, spurring hot-button topics like downstream transparency and sequential liability.

"Risk rises as liquidity falls. Terms get longer, offsets get bigger, and companies go under."

While these topics are pertinent, they are tangential to the cornerstone issue of liquidity. Of course, no amount of capital will save us from bad actors, gross negligence, or abhorrent mismanagement. However, that is more of a question of the human condition rather than a treatable industry diagnosis.

While the above risks will be philosophized for eternity, their inverse correlation to liquidity remains relevant. Risk rises as liquidity falls. Terms get longer, offsets get bigger, and companies go under.

Navigating the Liquidity Squeeze: Financing Options for Survival and Growth

Making matters worse is the self-perpetuating nature of a tightening credit environment. As risk rises, lenders and investors become more averse, seeking safer options to deploy their capital. This, in turn, ultimately exacerbates and compounds the issue. At worst, some companies are no longer eligible for their funding.

At best, their funding gets more expensive, and their terms become even more restrictive.

While there is no catch-all answer, alternative financing solutions can help. Downstream partners can leverage solutions to access flexible capital on demand, bringing certainty to their cash flow and enabling them to grow on their terms. However, be aware that not all revenue-based financing options are alike. Industry knowledge and flexibility are frequently overlooked when reviewing capital partners, so pay close attention to penalties, covenants, and recourse. 

If nothing else, it is essential to determine how complicated their funding process is and, ultimately, if they will grow with you.

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Check My Ads, Check My Transparency, and Check My Disinformation: Notes From AdMonsters Publisher Forum Boston https://www.admonsters.com/check-my-ads-check-my-transparency-and-check-my-disinformation-notes-from-publisher-forum-boston/ Tue, 20 Aug 2024 14:02:35 +0000 https://www.admonsters.com/?p=659761 In her keynote address at Publisher Forum Boston, Claire Atkin, Co-founder and CEO of Check My Ads, called for increased transparency in digital advertising to prevent disinformation, support quality journalism, and help bolster publisher revenue.

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In her keynote address at Publisher Forum Boston, Claire Atkin, Co-founder and CEO of Check My Ads, called for increased transparency in digital advertising to prevent disinformation, support quality journalism, and help bolster publisher revenue.

What do you think is the biggest problem in ad tech? 

Some might say the loss of revenue, others might say privacy concerns that create increased signal loss and more difficult audience targeting, and I’m sure there are a host more issues to list off. However, many problems in the industry are linked to a lack of transparency in the supply chain, says Claire Atkin, Co-founder and CEO of Check My Ads. 

Digital advertising, long been plagued by a lack of transparency, allows bad actors to profit from spreading disinformation and extremism online. In a recent keynote session, Atkin warned that publishers and advertisers should address these issues and restore trust in digital advertising.

“If advertisers are given the opportunity to have control over their ads, we will actually have a media system that works for you,” shared Atkin. 

Without more transparency, advertisers don’t know where their ads are showing up, often supporting the very things they want to avoid.

Beyond supply chain issues, Atkin highlighted how digital advertising hurts quality journalism by diverting funds to low-quality, disinformation-filled sites. To address this, she encourages publishers to build direct relationships with advertisers and boost their brand strength, aiming to restore trust and realign incentives in the industry.

Check My Transparent Supply Chain

The opaque nature of digital advertising has devastatingly impacted publisher revenue. As Atkin pointed out, many advertisers are blissfully unaware of their ad placements. “Our ads are off the asshole of the internet,” one executive confessed after Check My Ads audited their campaigns. 

This lack of visibility and control has allowed unscrupulous actors to profit at the expense of legitimate publishers. “Hundreds of thousands of dollars could be in your bank account daily, but it’s not — it’s going to fund chaos, not just disinformation, but useless stuff,” Atkin said. The systematic defunding of quality journalism results from advertisers’ inability to monitor and govern their ad placements effectively. 

Atkin urges publishers to build direct brand relationships to combat this trend rather than relying on intermediaries. If advertisers control their ad placements, Atkin believes publishers will have a media system that works for them. By strengthening their brand equity, publishers can attract advertisers willing to pay a premium to be associated with trusted, high-quality content — a strategy that could help realign incentives and restore financial viability to the news industry. 

Check My Disinformation

Unfortunately, digital advertising has inadvertently become a breeding ground for disinformation and extremism. The very structure of the ad tech industry has created perverse incentives that allow bad actors to profit from the spread of harmful narratives, explained Atkin.

“Around every politician that is politically advancing due to disinformation and hate, there is now a donut of Grifters making money off those same narratives,” Atkin said.

Since brands lack visibility into some of their ad placements, they have unwittingly funded websites and individuals peddling conspiracy theories, hate speech, and outright lies. Atkin’s organization, Check My Ads, works to identify and defund these malicious actors, successfully targeting prominent figures like Dan Bongino and Steve Bannon.

Addressing the root of the problem, Atkin argued that the ad tech industry must embrace a new era of accountability and transparency. She advocates for hourly log-level data and “know your customer” requirements to empower advertisers and help them monitor their placements, ensuring purveyors of disinformation are not co-opting their brand messaging. 

By realigning the incentives within the supply chain, publishers and advertisers can start reconfiguring digital advertising from a conduit for misinformation to a force for supporting quality journalism and democratic discourse. 

All in all, this will create a healthier supply chain that allows publishers and advertisers to get the most bang for their buck.

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Deck the Halls With Votes and Direct Mail: Mastering Holiday Campaigns in an Election Year https://www.admonsters.com/deck-the-halls-with-votes-and-direct-mail-mastering-holiday-campaigns-in-an-election-year/ Fri, 16 Aug 2024 21:48:07 +0000 https://www.admonsters.com/?p=659725 Direct mail offers a stable and predictable alternative amidst fluctuating digital ad rates. Unlike digital channels, where ad placements can be unpredictable and subject to rapid rate increases, direct mail provides a consistent and reliable medium. This channel's ability to lock in rates and deliver stable results makes it an attractive option for brands looking to diversify their advertising strategy.

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With the holidays and the 2024 election approaching, Yakira Young, AdMonsters’ Content Manager, sat down with the Postie team to discuss best direct mail practices for brands during this dynamic time.

Digital advertising is becoming increasingly complex, and honestly, this won’t change for some time. While the advertising ecosystem is strategically preparing for the long haul, peak season is upon us and before you know it, summer will be gone.

With transparency and media quality at the top of publishers’ minds, it will be interesting to see how Q4 plays out. External factors such as Google’s decision to maintain third-party cookies are only further complicating things.

For brands, brand safety is a major concern, especially during election season like this one where advertisers are projected to spend over $12B on ads across all channels. With brands opting out of placing ads next to election content, or news entirely, the question arises, what do brands have to be afraid of?

At the recent AdMonsters Publisher Forum in Boston, Jana Meron, the newly appointed VP of Revenue Operations and Data at The Washington Post, challenged the conventional wisdom around news and brand safety. Speaking to a packed room of publishers and tech vendors, she questioned, “Why would you avoid reaching this audience when they’re most engaged?”

A few years ago, an IAB study found that 84% of consumers trust brands they see in the news, which highlights the importance of addressing misconceptions about news content. Yet, despite this trust, Resonate’s Fall 2024 Consumer Trends Report tells us that consumer spending is down, which is no bueno for publishers, brands, and agencies already grappling with declining ad revenue and sales.

“The challenge continues for advertisers trying to navigate trust and brand safety,” said Jonathan Neddenriep, co-founder and CTO of Postie. “This also puts pressure on the large tech platforms to double down on ad and content safety tools, something that isn’t always a popular or easy investment (see the Meta CrowdTangle shutdown, for instance.)”

So, what’s a brand to do during times like these?

I recently moderated a webinar with Neddenriep and Bethany Bollenbacher, Customer Success Senior Team Leader at Postie, where they dropped a ton of jaw-dropping gems to help brands stay afloat. If one thing is for sure, and two things are for certain, brands should definitely incorporate direct mail into their strategies. With Postie, direct mail now offers digital capabilities like real-time reporting, website re-targeting, and targeting that exceeds even digital channels. 

Here are some insights and strategies to help brands navigate holiday and election campaigns.

  • Election Season: The Catalyst for Surging  Ad Rates
    During election years, the surge in political ad spending significantly impacts ad rates on major platforms like Meta and Google. The bid-based nature of these platforms intensifies competition for ad slots, driving up CPMs and CPAs. This situation is particularly challenging for ecommerce brands looking to grow during the holiday season. To navigate these fluctuations, brands should develop conservative forecasts for CPMs and explore alternative channels with more stable performance metrics. Implementing digital campaign levers like cost-capping can also help protect your budget from being drained by the rising cost of ad slots.
  • Leveraging Direct Mail for Stability
    Direct mail offers a stable and predictable alternative amidst fluctuating digital ad rates. Unlike digital channels, where ad placements can be unpredictable and subject to sudden rate hikes, direct mail provides a consistent and reliable medium. Its ability to lock in rates and deliver steady results makes it an attractive option for brands looking to diversify their advertising strategies. Additionally, direct mail’s physical separation from digital noise can enhance brand safety—a key concern during politically charged periods.
  • Develop Strong Personalization and Creative Strategies
    Personalizing direct mail is key to maximizing engagement and conversions. While basic tactics like adding a recipient’s name may have limited impact, tailoring offers relevant to the specific needs of each household can significantly boost engagement. For example, offering loyalty rewards or promoting local pickup to save on shipping can make direct mail more enticing. Additionally, tapping into the nostalgic and emotional appeal of the holiday season in your creative strategies can strengthen consumer connection and drive purchasing behavior. As Bollenbacher puts it, “Keep it warm, fuzzy, and cheesy!”
  • Hone in on Your First-party Data
    First-party data remains a vital brand asset, especially as third-party data faces increasing scrutiny and regulation. By leveraging first-party data, brands can gain deeper insights into consumer behaviors and optimize their marketing efforts. Retail media networks, which capitalize on this data, are gaining traction to support both retailers’ and brands’ growth objectives. This data-driven approach enables precise targeting and personalization, enhancing overall campaign effectiveness. During a session at AdMonsters Ops titled “Retail Media In-Housing: It’s the New Wave,” speakers stressed how crowded the retail media space has become. To stand out, one strategy for RMNs is to tap into direct mail, a far less crowded medium in RMN.
  • Remain Flexible to Keep up With Consumer Habits
    To run effective holiday campaigns, it’s crucial to understand and align with consumer habits. Different industries follow unique seasonal patterns, so your marketing should reflect these trends. For example, gift-giving behaviors ramp up in early Q4 while sectors like home services decline — no one wants to start a home improvement project on Thanksgiving when everyone is focused on eating. Brands can optimize their campaigns by targeting consumers at the right times and revisiting CRM strategies to encourage multiple purchases during the holiday season, boosting lifetime value.
  • Understanding Publisher Concerns
    Publishers are facing a host of challenges, with transparency and diversity in advertising being especially critical for niche publishers striving to stay afloat. Media quality verification remains is also a hot topic, with industry experts debating its effectiveness. At Publisher Forum Boston, Claire Atkin from Check My Ads highlighted these issues, calling for ongoing dialogue and efficiency improvements. In this challenging environment, publishers need strong strategies to maintain and strengthen their market positions.

A Worry-free Approach to Surviving Q4

Navigating holiday campaigns during an election year requires a multifaceted approach, balancing digital and traditional channels, and better leveraging first-party data, while understanding consumer habits. 

Brands and agencies must stay agile and prepare for fluctuating ad rates while optimizing strategies to cut through the political and holiday noise. Direct mail offers a stable, effective alternative, and personalized, emotionally resonant creative strategies can drive consumer engagement. Ultimately, a well-rounded, data-driven approach will empower brands to succeed even in the most challenging advertising landscapes.

Don’t sleep on the power of direct mail. To watch the full discussion click here.

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What Apple’s Distraction Control Means for Publishers https://www.admonsters.com/what-apples-distraction-control-means-for-publishers/ Wed, 14 Aug 2024 13:26:02 +0000 https://www.admonsters.com/?p=659661 Apple's new Distraction Control feature could reshape digital advertising, affecting how publishers engage users and generate revenue. In this exclusive Q&A, Vegard Johnsen from eyeo explains what this means for the future of online content and advertising.

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Apple’s new Distraction Control feature could reshape digital advertising, affecting how publishers engage users and generate revenue. In this exclusive Q&A, Vegard Johnsen from eyeo explains what this means for the future of online content and advertising.

In June, we had an exclusive sit-down with Vegard Johnsen, Chief Product Officer at eyeo, who predicted Apple was brewing something big with its Web Eraser feature.

Fast forward to August, and Apple officially introduced Distraction Control — an evolution of the Web Eraser concept that’s already sending ripples through the industry.

What Is Distraction Control?

Distraction Control is not just a fancy pop-up blocker. It’s a user-empowerment tool enabling Safari users the power to hide distracting elements on websites. While Apple carefully distinguishes this feature from traditional ad blockers, the implications are clear: publishers and advertisers must rethink their strategies to survive.

The feature has sparked controversy, especially among publishers who rely on ad revenue and subscription prompts to stay afloat. Apple’s quiet roll-out of Distraction Control in the latest iOS 18 beta is a stark reminder that the tech giant isn’t afraid to shake things up in the name of user experience.

In this follow-up Q&A, Vegard Johnsen returns to share his insights on how Distraction Control could affect publishers, advertisers, and the broader ecosystem. Spoiler alert: this is just the beginning of a new era where user experience reigns supreme, and publishers must evolve — or risk becoming obsolete.

The Revenue Impact: Are Subscription Models at Risk?

Lynne d Johnson: How do you foresee Apple’s Distraction Control feature affecting publishers’ ability to generate revenue, especially those relying on subscription sign-ups and mailing lists?

Vegard Johnsen: Subscription sign-ups, mailing lists, and similar mechanisms to generate revenue are a numbers game. Most users ignore or dismiss these messages most of the time. There have always been incentives to reach the right user at the right time, with the right message. But for the most part, the cost of being lazy was low, so many were lazy, deploying spray-and-pray tactics. Now, with Distraction Control, being lazy is going to get more expensive because users will have more agency in removing these elements.

However, I do imagine that some kind of crowdsourcing of user action is on the roadmap in the future. The obvious way to go with this feature is to offer users to opt-in to crowdsourced feature removal. In that case, the impact could be quite significant since it wouldn’t be limited to just the individual user.

But perhaps this is good news for high-quality content creators who engage with the user respectfully, at the right time, and with the right message. It may lead to these “good” publishers standing out with more signal amongst the noise. Ultimately, there would be fewer bad apples (no pun intended) to spoil the bunch.

Ad Blocker or Not? Understanding the Fine Line

LdJ: Distraction Control has been described as not being an ad blocker. How does this distinction affect the broader ecosystem of online advertising and content monetization?

VJ: One could easily imagine this feature evolving to better cover dynamic content. The biggest reason for that development is simple game theory — there will now be an incentive to make ‘everything’ dynamic (i.e., adding dynamic elements to subscription sign-ups and mailing list prompts).

Striking the Right Balance: User Experience vs. Publisher Needs

LdJ: What balance should be struck between enhancing user experience by removing distracting content and maintaining publishers’ needs to engage users with necessary overlays like cookie consent and subscription prompts?

VJ: That balance has always been necessary, of course, but Distraction Control takes it to a new level. Now users have more choices if they are not happy — not just by bouncing off the site but by also taking control and removing elements. For elements where data is available and timing is discretionary (such as subscription prompts), it becomes extremely important to show the right message at a time that works for the user. Failure to do so may mean the dialog is gone forever.

For other messages where timing and/or data is not available to customize (such as cookie consent notices), one could expect to see pre-messages (such as the ones that often precede the IDFA dialog box) warming up the user. But, perhaps this is also going to spur the industry to move away from dark patterns — from asking for consent for 900 vendors and instead towards asking for a more reasonable number, thereby making the UX more balanced.

For sites to get signals on what direction to take, it would be great to see some kind of feedback feature for the content owner. This feature could share details on what elements are being removed, so publishers can learn what users have issues with and what they don’t.

Industry Response: Adaptation or Resistance?

LdJ: Given the concerns raised by industry associations about similar features in the past, how do you think publishers and advertisers might adapt to or resist this new feature?

VJ: One obvious way the industry might resist is to start adding dynamic elements to messages to avoid ‘detection’ by this feature. But, that kind of cat-and-mouse game would incentivize Apple to make the feature more blunt and powerful, so this is not a good path. Given that, at least for now, the feature requires users to actively remove the content.

So, the reasonable path will be to ensure that the elements on the page stay below the activation threshold. By having a good ratio of content to other elements, and by reducing and avoiding distractions and interruptions, users will have no reason to take action.

The Future of Content Monetization: Evolution or Revolution?

LdJ: What long-term implications do you see for content creators if features like Distraction Control become standard across browsers? Could this lead to new forms of content monetization?

VJ: To me, this is simply an evolution of users taking control of their online experience. They have plenty of options today, from choosing a browser to suit their needs to installing extensions and apps to improve their visual, privacy, and data experience. Browsers are a competitive space, particularly post-DMA, so I would be surprised if other browsers did not follow suit, particularly if this feature proves to be popular with users.

Fundamentally, users are happy to support content creators, but they want the balance to be right. Given that I don’t see the need for new forms of content monetization or any special action by content creators, when it comes to those publishers with a good user experience already, this is something to celebrate.

Rethinking Ad Strategy: Opportunities Amid Challenges

As publishers and advertisers grapple with the implications of Apple’s Distraction Control, the focus must shift toward more user-friendly ad strategies. One effective approach could be reducing intrusive pop-ups in favor of smaller, more subtle placements that integrate seamlessly with the user experience. There’s also potential value in publishers seeking direct buys with advertisers, which can ensure higher quality placements than those typically filled by programmatic platforms.

Interestingly, the need for users to actively hide ads creates a unique opportunity, as those ads might attract more attention offering useful insights into user behavior. Still, the key to thriving this new thorn in your side is to prioritize user experience.

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Ramping Up Your Revenue: Digital Publishers Reveal Key Growth Strategies https://www.admonsters.com/playbook/ramping-up-your-revenue/ Mon, 05 Aug 2024 14:44:49 +0000 https://www.admonsters.com/?post_type=playbook&p=659275 In July 2024, we surveyed and interviewed publishers to gain insights into their revenue outlook and identify their top opportunities for growth. This report summarizes our findings.

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“If a publisher is investing in audience development tools and incurring expenses against them, then you would hope that the same publisher has a view on increasing revenues above those costs.” — Justin Wohl, Chief Revenue Officer at Snopes.com and TVTropes.org

The past few years have been tumultuous for publishers. The on-again/off-again deprecation of cookies, concerns over MFA sites making programmatic advertising risky, and the rise of generative AI search decimating referral traffic have all posed significant challenges. Despite these hurdles, publishers continue to innovate. As a result, the majority anticipate revenue growth in the coming year.

In July 2024, we surveyed and interviewed publishers to gain insights into their revenue outlook and identify their top opportunities for growth. This report summarizes our findings.

Of course, much has changed since our survey, including Google’s decision to forgo cookie deprecation for the foreseeable future. Still, what’s clear to us is that the talk of cookie deprecation has prompted them to rethink the way they do business and how they can generate revenue.

Key Findings: Direct Deals & Audience Data

  • On the whole, revenue will grow. Most respondents (60%) anticipate revenue growth, with 19% expecting significant growth and 41% anticipating moderate growth.
  •  2025 will be the year of the direct deal, with 68% of publishers saying it represents their best opportunity for revenue growth.
  • Monetizing audience data (50%) and creating new products (46%) are also seen as significant opportunities for growth.
  • Looking ahead, 33% plan to leverage audience data, and 23% each consider subscriptions and licensing/syndication as new revenue streams.
  • To support these growth plans, 71% of respondents plan to invest in new tools or technologies to ramp up revenue.
  • The most invested tools include audience segmentation (65%), identity resolution (50%), and AI-driven/advanced analytics platforms (40%).

Enter your info to download your copy below!

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How Bid Shading and the $12 Billion Political Ad Boom Could Impact Publishers https://www.admonsters.com/how-bid-shading-and-the-12-billion-political-ad-boom-could-impact-publishers/ Tue, 30 Jul 2024 16:33:55 +0000 https://www.admonsters.com/?p=659196 Explore how bid shading in political advertising affects publishers' revenue, the associated risks, and strategic measures to mitigate these impacts during an election cycle with high political budgets.

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Explore how bid shading in political advertising affects publishers’ revenue, the associated risks, and strategic measures to mitigate these impacts during an election cycle with high political budgets.

Political advertisers are forecasted to spend over $12 billion across all channels during the 2024 election cycle, marking the highest spend in U.S. history, according to eMarketer. While a significant portion of that budget will go to linear TV, digital advertising remains a critical battleground. 

Election campaigns are turning to advanced techniques like bid shading to stretch their dollars in this high-stakes environment. But what does bid shading mean for publishers? Let’s dig into how this tactic impacts publishers, the challenges it presents, and how to navigate these waters during this unprecedented election cycle.

What is Bid Shading?

Bid shading might sound like some covert operation, but it’s actually a savvy strategy media buyers use in digital ad auctions. Imagine you’re at an auction, but instead of bidding wildly, you have an algorithm whispering the optimal bid in your ear. 

This algorithm analyzes historical pricing data, current market conditions, and the value of the impression to tweak bids just enough to win ad impressions without overpaying. The method is especially crucial in situations like political advertising where budgets, although large, need to be spent efficiently.

Example:

Picture a political campaign aiming to secure an ad slot. Without bid shading, they bid $10 and pay the full amount. But, with bid shading, the algorithm suggests $7.50 based on past data, saving $2.50 while still winning the spot and potentially saving the advertiser 25% on that impression.

The Impact of High Political Budgets on Publishers

With political budgets hitting an all-time high, this influx of ad spend can be both a golden opportunity and a potential headache for publishers. 

The Upside:

  1. Increased Demand: More political dollars chasing your inventory means heightened competition, which typically drives up demand and fill rates.
  2. Revenue Boost: Those previously unsold ad slots? They’re now hot commodities, filling up quickly and boosting your bottom line.

The Downside:

  1. Revenue Volatility: While demand surges, bid shading introduces a layer of unpredictability as bids are adjusted downward, making revenue streams less predictable.
  2. Inventory Devaluation: As campaigns use bid shading to cut costs, the perceived value of your ad impressions might take a hit, impacting long-term revenue strategies.

Navigating the Risks of Bid Shading

Bid shading isn’t just a double-edged sword — it’s a whole cutlery set. Here are the risks you need to watch out for and how to handle them:

Lower CPMs:

Bid shading typically results in lower cost-per-thousand impressions (CPMs). Some publishers have reported CPM drops of up to 20% due to bid shading. This is a direct hit to your revenue as bids are systematically adjusted to lower amounts.

What to Do:

Consider implementing dynamic price floors that adapt to market conditions in real time. This ensures bids won’t drop below a certain level, protecting your revenue.

Inconsistent Revenue Streams:

The dynamic nature of bid shading means your revenue from political ads can fluctuate wildly, complicating forecasting and planning.

What to Do: 

Leverage advanced yield management tools to analyze historical data and market trends. This helps you understand and anticipate the effects of bid shading, optimizing your inventory pricing and placement.

Competitive Pressure:

With multiple campaigns vying for ad space, the pressure to lower prices further increases, risking a race to the bottom.

What to Do:

Enhance your auction strategies with techniques like header bidding. By involving multiple demand sources, you can drive up competition for your inventory, balancing out the downward pressure from bid shading.

Making Bid Shading Work for You

Bid shading isn’t all doom and gloom—there’s a silver lining if you play your cards right. Here’s how to turn bid shading into an advantage:

Leverage Advanced Analytics: 

Investing in tools that provide deep insights into bidding patterns can help publishers adjust their strategies in real time and identify opportunities to maximize revenue.

Enhance First-Party Data: 

Rich, accurate data about audience segments can command premium prices, even in a bid-shaded environment. Investing in data collection and analysis can increase the value proposition for advertisers.

Dynamic Price Floors:

Setting smart, dynamic price floors can help you maintain control over your inventory pricing. Adjust these floors based on real-time market conditions, like time of day, user demographics, and current events to prevent your CPMs from dropping too low.

Auction Strategies:

Don’t just rely on traditional auction setups. Incorporate header bidding to get multiple demand sources competing for your ad space. Increase competition for inventory and mitigate the impact of bid shading from any single source by relying on multiple SSPs and ad exchanges. This improves the likelihood of higher bids, even with bid shading in play. 

Yield Management:

Invest in robust yield management tools and expertise. These tools help you make data-driven decisions about your ad inventory, optimizing pricing and placement to counteract the effects of bid shading.

Collaboration with Buyers:

Build strong relationships with your advertisers. Educate them about the value of your premium inventory and work together to establish fair pricing and bidding practices. This collaborative approach can lead to more stable and beneficial outcomes for both parties.

When in Rome Leverage Bid Shading to Your Advantage

Bid shading is here to stay, especially in high-budget political advertising cycles. Publishers who adapt and strategically manage their ad inventory can thrive, capturing the full potential of these high-budget opportunities.

While bid shading presents both opportunities and challenges, strategic measures can mitigate risks and maximize revenue. Implementing dynamic pricing, enhancing auction strategies, optimizing yield management, and fostering collaboration with buyers is key to navigating bid shading complexities and staying competitive.

Not all of the predicted $12 billion election cycle budgets will be subject to bid shading. Direct deals, bypassing programmatic auctions, will also play a significant role. Publishers offering unique value propositions, like highly engaged audiences or brand-safe environments, can command premium prices despite bid shading tactics.

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Google’s Cookie Curveball: What’s Next for Buyers and Sellers? https://www.admonsters.com/googles-cookie-curveball-whats-next-for-buyers-and-sellers/ Tue, 30 Jul 2024 00:27:54 +0000 https://www.admonsters.com/?p=659180 Google’s surprise shift to pump the brakes on third-party cookie deprecation in Chrome is sending shockwaves through the digital advertising world. As the dust settles, let's dig into what this means for publishers, advertisers, and the future of privacy-preserving technologies.

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Google’s surprise shift to pump the brakes on third-party cookie deprecation in Chrome is sending shockwaves through the digital advertising world. As the dust settles, let’s dig into what this means for publishers, advertisers, and the future of privacy-preserving technologies.

In a plot twist straight out of a digital marketing thriller, last week, Google announced it will not deprecate third-party cookies unilaterally after all and instead opt for enhanced user choice. This revelation is leaving buyers and sellers scrambling to reassess their strategies.

We attended a U of Digital Live Learning Event, where industry experts shared insights about what the news means for the advertising ecosystem.

Following are key points from the U of Digital event and what this means for digital media and ad tech, with insights from industry-heavy hitters. U of Digital’s Myles Younger and Shiv Gupta were joined by Alex Cone Product Manager, Privacy Sandbox at Google; Joe Root Co-Founder & CEO at Permutive; Shailley Singh, EVP Product & COO at IAB Tech Lab; and Therran Oliphant former SVP Data & Technology at Essence Mediacom discussed what steps advertisers and publishers should take to navigate this new reality.

The Big Reveal: Google’s Change of Heart

Last Monday, Google unveiled its new approach to privacy, giving users elevated and informed choices for managing third-party cookies in the Chrome browser. Instead of outright deprecation, users will receive a universal prompt allowing them to decide whether to accept cookies, with the option to adjust this choice at any time. This move aims to balance user privacy with the industry’s need for effective advertising tools.

Panel Insights: What the Experts Are Saying

During the U of Digital event, the panel of industry experts dissected the implications of Google’s announcement, and here’s what they had to say:

User Choice and Its Ripple Effects: Google’s decision to elevate user choice, potentially mirroring Apple’s ATT framework, means cookies aren’t entirely gone but are expected to decline as more users opt-out. The design and deployment of the consent prompt will be pivotal. Will it be opt-in or opt-out? How will it be presented to users? These factors will determine the extent of cookie usage going forward.

Privacy Sandbox Continues to Evolve: Despite the shift, Google will continue developing privacy-preserving alternatives like the Topics API, Protected Audiences API, and Measurement API, ensuring the industry has robust tools for the future.

Broadening Privacy Horizons: With plans to introduce IP protection in incognito mode and other privacy measures, Google is pushing the envelope on broader privacy initiatives beyond cookies.

Voices from the Field: Real-Time Reactions

The panel experts shared their perspectives on the announcement’s broader implications:

Publishers and Ad Tech Innovators: Joe Root emphasized the significant shift for publishers who must now consider a future where cookies play a smaller role, focusing on alternative IDs, contextual advertising, and first-party data.

Advertisers and Agencies: Therran Oliphant pointed out the increased complexity for marketers, stressing the importance of investing in first-party data and streamlining tech stacks to future-proof their strategies. This is a wake-up call for marketers to clean their houses. Those clunky, inefficient tech stacks? They’re yesterday’s news.

Portfolio Solutions Approach: Cookies may still have a seat at the table, but they’re no longer the head. Shailley Singh from IAB Tech Lab highlighted the need for a portfolio approach, blending cookies with other addressability solutions to maintain effective advertising strategies in a rapidly evolving landscape.

Alex Cone’s Crucial Insights: Timelines and Testing

While the timeline has shifted, the privacy-first future is still coming. It’s less of a demolition and more of a renovation. Alex Cone from Google provided valuable insights regarding the timelines for cookie deprecation and the privacy sandbox APIs:

Decoupling Timelines: Cone clarified that the timeline for third-party cookie deprecation has always been separate from the availability of the privacy sandbox APIs. The APIs have been generally available since last September, allowing publishers to start testing and integrating these tools well before cookies are phased out.

Testing and Adoption: While a 1% deprecation rate for cookies was meant to facilitate initial testing, the APIs are available for broader industry adoption. Publishers can and should start integrating these technologies to prepare for the eventual decline of third-party cookies.

Informed User Choice: Cone emphasized the importance of ensuring users can make informed choices about their privacy settings. This involves a more detailed and transparent consent mechanism, likely resembling Apple’s ATT prompts but applied universally across browsing experiences.

What Publishers Need to Know: Practical Steps Forward

It’s time for advertisers to find new ways to reach audiences without relying on third-party data. The race to find the perfect balance between personalization and privacy has just begun.

For publishers, the cookie jar might not be empty, it’s certainly not as full as it used to be. Root of Permutive pointed out that many users are already browsing without third-party cookies. The time to develop robust first-party data strategies and explore contextual targeting solutions was yesterday.

While Google’s announcement offers some breathing room for the industry, it raises crucial questions about implementation and future strategies. Here are the key considerations for publishers:

  1. Prepare for User Choice: Publishers should anticipate a decline in third-party cookies as more users opt-out. Investing in first-party data collection and management will be critical.
  2. Embrace Privacy Sandbox APIs: Start testing and integrating Google’s privacy-preserving alternatives like the Topics API and Protected Audiences API. These tools will be essential in maintaining addressability and ad effectiveness.
  3. Develop and adopt privacy-preserving technologies: As cookies continue to decline, the industry must keep developing and adopting privacy-preserving technologies. This includes enhancing first-party data strategies, utilizing privacy sandbox APIs, and exploring new addressability solutions.
  4. Engage with Consent Mechanisms: Stay informed about the development of Google’s consent prompts. Understand how these will be implemented and what messaging options will be available to maintain user trust and transparency.
  5. Monitor Regulatory Developments: Google’s approach is designed to appease regulators, but ongoing dialogue with bodies like the UK’s CMA will shape the final implementation. Publishers should stay engaged with these discussions to anticipate and adapt to regulatory requirements.

Adapting to a New Era of Digital Advertising

Google’s third-party cookies reversal marks a significant shift for the industry. While it offers a reprieve, the long-term trajectory remains clear: a move towards greater user privacy and the need for innovative solutions. Publishers must stay agile, continuously adapt their strategies, and prepare for a future where privacy and addressability coexist in a delicate balance.

Take a deeper dive into this topic, check out the presentation, view the deck, and download the recap at U of Digital

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Are We Overcomplicating Floor Pricing Optimization? https://www.admonsters.com/are-we-overcomplicating-floor-pricing-optimization/ Wed, 03 Jul 2024 15:56:48 +0000 https://www.admonsters.com/?p=658422 Discover how behavioral economics offers a simpler, more effective approach to floor pricing optimization. Kean Wang, VP of Product and Strategy at Intowow, reveals best practices for balancing Header Bidding and Google Ad Manager to maximize publisher revenue.

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Discover how behavioral economics offers a simpler, more effective approach to floor pricing optimization. Kean Wang, VP of Product and Strategy at Intowow, reveals best practices for balancing Header Bidding and Google Ad Manager to maximize publisher revenue.

Floor pricing optimization is making waves again in the publishing world, but have we been overthinking it?

Kean Wang, VP of Product and Strategy at Intowow, dives into the evolution of floor pricing strategies and unveils a refreshing shift from complex mathematical models to the practical realm of behavioral economics. By understanding bidder behaviors and leveraging the strengths of Header Bidding and Google Ad Manager, publishers can streamline their approach and boost revenue without getting lost in the computational weeds.

Floor pricing optimization has regained popularity among publishers. Over the past five years, we have perfected our dynamic floor pricing algorithms. However, it wasn’t until a year ago, as we gained access to more data from major publishers around the world, that I realized we might have been approaching this problem unnecessarily.

For quite some time, we adopted a purely mathematical approach to floor pricing optimization, focusing on determining each price P that maximizes the RequestRPM according to the function 

RequestRPM(P) = SellThroughRate(P) × eCPM(P)

for each infinitesimally meaningful inventory segment. If demand is static, the calculations are straightforward and manageable. However, randomness introduces uncertainty in a more realistic scenario where hundreds of thousands of campaigns run concurrently and complete at different times. This uncertainty significantly complicates the computational process and requires intensive predictive modeling to find an optimal solution.

It turns out that an easy way out is to approach the problem from a completely different discipline – behavioral economics.

A Simple and Elegant Approach

In the real world, campaigns are managed by DSPs who bid for impression opportunities in auctions. These DSPs vary widely in their technical capabilities and operational strategies. So, if we could target the behaviors of different types of bidders and provide the right incentives and signals to facilitate communication and competition among them, we could reach an alternative solution that is more elegant. This approach allows the market to optimize by itself to maximize publishers’ benefits without too much interference and the need for excessive calculations.

Generally speaking, bidders buy through two open auction channels: Header Bidding and Google Ad Manager (GAM), both of which are extensively integrated by most publishers. By analyzing bidding behaviors across these channels, we have consolidated the following best practices:

  1. For Header Bidding, set up floor prices low enough on SSPs to encourage bid tendencies but high enough to filter out low-quality ads.
  2. On Google Ad Manager, use the winning Header Bidding bid prices and dynamically trigger Unified Pricing Rules (UPRs) to provide competitive price signals through Google Ad Exchange and Open Bidding.
  3. Ensure that Header Bidding line items are correctly priced on GAM with your net earnings to facilitate an efficient unified auction.

These best practices take advantage of a key behavioral distinction between these two channels of bidders: 

Google Ad Manager bidders, predominantly Google Ads and DV360, primarily adjust their bids based on floor price signals, whereas Header Bidding bidders make extensive adjustments in response to changes in win rates.

Excessive floor prices do not stimulate Header Bidding bidders; instead, they block their bids and reduce competition. By allowing more Header Bidders to participate in auctions, we maximize the competitive bid signals sent to GAM. On GAM, triggering these signals with UPRs can restore the “last look” advantage for Google bidders, encouraging higher bids that benefit publishers. (Google’s decision to cancel this feature was due to pressure from other SSPs, but this move also negatively impacted publisher revenue.)

With more competitive bids from Google bidders taking over some winning opportunities from Header Bidders and driving down their win rates, Header Bidders are incentivized to adjust their bid prices, which in turn encourages more competitive bids from Google. This fosters a perpetual cycle of healthy competition across these two channels.

For publishers with extensive Header Bidding coverage, these best practices are generally sufficient. Beyond this, additional efforts would likely yield only marginal benefits unless you are determined to invest intensive R&D to further optimize price ranges specifically for Google bidders across each traffic segment, where the benefits could add up to be significant.

More About the Behavioral Distinction

Upon further research and some reverse engineering, we were able to gain a clearer understanding of the factors contributing to such a behavioral difference.

For DSPs, floor prices are one of the pre-auction signals useful for optimizing bid decisions to maximize campaign ROIs. However, for floor prices to serve as reliable indicators, the environment must meet three criteria:

  1. Floor prices, along with the associated traffic metadata, should be consistently supported across all stakeholders.
  2. Floor prices must maintain their integrity during transmission and should not be lost, overridden, or manipulated down the supply path.
  3. To benefit from these signals, bidders must possess powerful predictive capabilities with the technical bandwidth to perform cost-efficient real-time calculations.

Only Google, with its unified and streamlined programmatic ad supply path, meets these criteria across all stages. Information from publisher web pages is collected by the standardized Google Publisher Tag (GPT) library, consistently formatted as ad requests, and transmitted to the centralized Google Ad Manager. From there, bid requests are uniformly assembled and sent to DSPs via a robust server-to-server connection using the Authorized Buyer Real-Time Bidding Protocol.

On the buy-side, Google Ads and DV360, operating with powerful predictive capabilities leveraging Google’s highly integrated cloud infrastructure, can accurately estimate ad performance using real-time client-side signals and determine reasonable bid prices for each impression opportunity before an auction occurs. 

In contrast, for Header Bidding, every bid request is processed by at least two entirely separate parties (e.g., publisher-hosted Prebid.js, vendor wrappers, or SSPs) before reaching DSPs. Even for large DSPs with strong predictive capabilities, such a fragmented supply path makes it difficult to ensure the integrity of information, forcing them to downplay the option of adjusting bid decisions based on real-time sell-side signals. A rather reliable source of information is win rate data, which each bidder processes post-auction but is often delayed and lacks granularity.

These disadvantages of Header Bidders are particularly evident when we compared bid CPM trends from early to subsequent ad refresh instances or across different ad position series. For example, for the same inventory, when comparing the CPM of the first ad to the fifth ad refresh, average bid prices from Google bidders can drop by over 50%.

However, for Header Bidders, the average win bid CPM only decreased by 3%, which falls within the margin of statistical error. Such inability to perform per-impression bid adjustments from Header Bidders can also be highlighted by the fact that, on average, they purchase the same inventory with the same level of CTR and viewability performance at approximately a 35% premium compared to Google bidders.

To further pinpoint the issue, we took the same Header Bidding bidder and compared its bidding behaviors across two different channels: Header Bidding and Open Bidding (a unified server-to-server bidding solution provided by Google).

Under the same floor pricing strategy for the same bidder, through Open Bidding RequestRPM could be improved by 8 to 10%, compared to only a marginal 2% improvement through Header Bidding. This suggests that a fragmented supply path is the primary factor preventing per-impression bid adjustments for Header Bidders, forcing bidders through this channel to forgo floor prices and focus on win rate signals instead.

Future Outlook for Floor Pricing Strategies

Floor prices, like other real-time client-side signals, provide valuable information that encourages bidders to recognize the fine nuances in publisher inventory. However, these signals can only be effective when information integrity can also be guaranteed across the entire supply path.

The above behavioral distinctions between Google bidders and Header Bidders underscore the importance of Supply Path Optimization (SPO) and demonstrate how a more streamlined supply path can encourage bidders to utilize more sell-side signals, ultimately improving efficiency across the industry.

But for now, with these simple yet elegant best practices, publisher ad inventory is effectively categorized into two groups: one with extensive competition from both Header Bidders and Google bidders, and the other with only Google bidders. Publishers with more inventory in the first category can significantly benefit from the competitive cycle facilitated by these simple steps.

However, for publishers whose inventory primarily falls into the latter category, an active floor pricing strategy using a traditional mathematical approach is still necessary to realize the huge growth potential from Google demand.

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