The Right Way For Publishers to Optimize Programmatic Revenue

You may have noticed recent movement in how publishers are managing their programmatic inventory, including our announcement of Operative Compete, our new exchange monetization product. Compete has given our clients up to an 89% revenue increase across their programmatic sources, an example of which we shared in a webinar last Wednesday August 12. I think opportunities like Compete represent a much larger trend in favor of publisher control over the ecosystem.

Until recently, without tech resources of their own, many publishers took two detrimental approaches to digital advertising. The first was to give control to agencies and ad tech companies that judge performance based on volume (impressions, audience size, etc.) This means that many now have huge pools of bad quality inventory and audiences that are draining their average CPMs and hurting their quality reputations.

The second was the willingness to give total control of their audiences and inventory over to third parties. From DMP marketplaces that buy and resell their data for pennies, to SSPs who optimize their inventory in a black box, premium publishers now rarely get paid what they deserve for their quality audiences and content.

Mike Shields recently highlighted that companies like Vox (full disclosure, they are a client) are steering clear of the middle-men. These new publishers are instead building custom technology and working with objective platforms that encourage publishers to monetize their own inventory across channels (like Operative.) While not every publisher can do this, the message is clear – ad tech companies that profit from the impression-driven ad ecosystem are bad for publishers.

For publishers who do use programmatic backfill, and there are a lot of them, we’re seeing the rise of “reverse programmatic optimization.” This represents a huge opportunity for publishers to take charge of their own inventory and data and get a better price for what they offer. But not all programmatic optimization is created equal.

One version called header bidding has recently gotten some press. In short, header bidding is the process of putting code from a programmatic revenue source above the ad server code to enable real time bidding to occur before a direct ad is place. Google AdX, which is taking advantage of its nearly ubiquitous DFP presence to bid first has prompted other big programmatic players like Open X to develop header bidding solutions of their own. While the idea of increased competition and real-time bidding is right, the approach is still flawed. Header bidding is very technical and cumbersome to implement and partner testing and optimization opportunities are surprisingly limited. The code loads before the content, putting user experience in jeopardy. Putting code in the header also exposes valuable behavior data. And many clients of ours who have tried header bidding have been limited to a few partners, when they might work with 5 or more different programmatic sources.

Operative’s approach is different, empowering publishers with transparency, flexibility and scale. With Compete, publishers of any technical capability can keep their customer data safe and truly optimize in near-real time across all of their revenue partnerships. Compete enables publishers to easily test a wide variety of revenue sources and gives publishers the flexibility to easily customize which programmatic partners have access to different inventory.

Publishers are just starting to find ways to push back against the ad tech ecosystem in order to get fair pricing without sacrificing quality or data, and we’re excited to be a part of the solution.