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Building long-term sustainable revenue from audiences

Building long-term sustainable revenue from audiences

Ian Foley is a digital advertising executive

Ian Foley is a digital advertising executive

By Ian Foley

The last 10 years has seen unprecedented investment in ad technology. According to Brian Andersen, partner at Luma Partners, this has amounted to $5 billion in venture capital, which has created an ecosystem of more than 200 venture-backed companies in the video ad ecosystem alone.

Ad technology firms have focused on aggregating publisher inventory to create networks (e.g. Tremor), building profiles from publisher data (e.g. BlueKai) or retargeting audiences across publishers (e.g. Rocket Fuel). But there has been very little investment in ad technology solutions that help publishers.

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Trading thoughts
Publishers have seen the benefits of venture-backed innovation in parts of the ad stack, including video player technology (e.g. Brightcove) and ad server solutions (e.g. FreeWheel).

However, most of the programmatic workflow solutions or capabilities designed for the shift to automated media buying has focused on the demand side of the ad ecosystem (e.g. agency trading desks).

Meanwhile, much of the audience data and value has shifted into the hands of ad technology aggregators who have done a less-than-stellar job at sustaining the inventory value for publishers, and instead have seen a steady race to the bottom for CPM prices.

To compound this, a number of ad networks have created large pools of inventory that include fraudulent impressions that have tainted the overall market for publishers.

This situation is now beginning to change as publishers start building out their own systems or using third-party vendors.

One of the primary reasons for this is publishers want to ensure better control of their inventory and data.

According Liz White, general manager of People and EW Digital, “We have this great audience data, and now with the ability to build programmatic direct relationships, we can build customized audience segments for brands across our properties.”

Hard core
One of the pioneers in this space is Hearst.

In 2013 it acquired Red Aril, a DMP, which it has now built around an audience targeting and programmatic product now branded as Audience Core.

This team has built out more than 100 audience segments and offers advertisers greater reach by aggregating audience segments across their different properties.

At the same time, Audience Core is linking up its inventory to the programmatic buying platforms of the agency holding companies.

These changes have brought about the new term of publisher trading desk to describe how publishers are managing and then trading their audience data.

For publishers that do not have the resources to build out their own solution, a number of technology vendors have started to emerge.

AcuteIQ works with publishers to build their own audience segments from first-party data and then helps publishers integrate into programmatic trading desks.

Meanwhile, LiveIntent helps publishers turn their email newsletters into a real-time advertising channel that brands can buy programmatically.

THESE CHANGES provide great opportunities for publishers, offering the chance to build long-term sustainable revenue from their audiences.

By shifting ad revenue to the publisher’s audience data, the editorial team can focus on content curation and consumers can enjoy great content without ad overload.

Ian Foley is a digital advertising executive based in Portola Valley, CA. Reach him at

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