Storyline Development at DES: Digiday Presents the Publisher Investment Report
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This document contains preliminary findings from a 2013 report on publisher investment. Key findings include: - The report is based on surveys and interviews with 50 publishing executives about how they are adapting to changes in digital marketing. - Publishers will reallocate resources to focus on premium sales, programmatic buying, and native ads over the next 24 months. - Half of publishers' revenue will come from direct sales while a third will come from ad exchanges and networks by 2015. - Capturing premium revenue through sponsorships, social media, native ads and video is a top priority. - Most publishers offer native ads but rate their own efforts as average. Mobile and data monetization efforts lag behind desktop.
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Storyline Development at DES: Digiday Presents the Publisher Investment Report
- 2. Sources: Preliminary Data, 2013 Publisher Investment Report Methodology: What, Who, & Why? • This is the second report in an ongoing series that will look at key drivers, inhibitors and benchmarks that reflect how Brands, Publishers, and Agencies are navigating the increasingly complex digital marketing ecosystem • Based on exhaustive primary and secondary research conducted in Q3 of 2013, including online surveys and detailed, in-person interviews with 50 publishing executives. • From this comprehensive exercise, we have identified key themes, with top-line findings of the report revealing a series of issues and best practices. • Results are preliminary • Final report will be available by the end of October
- 3. Sources: Preliminary Data, 2013 Publisher Investment Report Key Findings Sources: Preliminary Data, 2013 Publisher Investment Report
- 4. Sources: Preliminary Data, 2013 Publisher Investment Report Publisher Organizations Will Reallocate Internal Resources to Capture Revenue… 76%Premium Sales 73%Programmatic Buying 57% Native Ads Q: Given the potential ad sales issues below, please select the THREE that you think will have the MOST impact in driving internal organizational changes / resource allocations over the next 24 months.
- 5. Sources: Preliminary Data, 2013 Publisher Investment Report Publisher Organizations Will Evolve HOW they Sell as well as WHAT they are selling 1 in 2Direct Sales (Premium) 1 in 3Direct Sales (Non- Premium) 1 in 2Ad Exchanges 1 in 5Ad Networks Q: What percentage of your total ad revenue will be derived from the following sales channels in 2013 and do you see those allocations increasing, decreasing, or staying about the same by 2015? (% INCREASING RELATIVE TO 2015)
- 6. Sources: Preliminary Data, 2013 Publisher Investment Report Capturing Premium Revenue a TOP priority … 33% 54%67% 56% Social Native AdvertisingVideo Ads Mobile Ads Q: Please rank the importance of the following types of advertising in attracting “premium” ad dollars directly from advertisers (VERY/EXTREMLY important) 77%Sponsorships
- 7. Sources: Preliminary Data, 2013 Publisher Investment Report Going Native, but grasp may (currently) exceed reach 80%currently offer Native Advertising opportunities to advertisers 53% 1 in 38 in 10 Have a separate unit that creates content for advertisers Rate their own efforts to date at creating content for advertisers as poor/average Rank the expected importance of Native advertising as very/extremely important Q: Please rank the importance of the following types of advertising in attracting “premium” ad dollars directly from advertisers (VERY/EXTREMLY important)
- 8. Sources: Preliminary Data, 2013 Publisher Investment Report Mind the gaps - Mobile, Data Monetization lag Q: Please characterize your company’s own efforts to date at fully monetizing Mobile Assets such as smart phone and tablet traffic, app usage, and mobile-specific search activity versus efforts at monetizing data that you get from sources like user registration data, cookies, etc. DataMobile Assets
- 9. Sources: Preliminary Data, 2013 Publisher Investment Report Big changes are afoot with regards to how publishers acquire audiences. Q: Please rank the importance of each of the below as audience acquisition tools in 2013 & 2015 (VERY/EXTREMLY IMPORTANT) Audience Acquisition Tools 2013 Rank 2015 Rank SEO 80% 1 67% 3 Social media marketing 57% 2 70% 2 Content optimization 56% 3 80% 1 Video 34% 4 54% 5 Online display advertising 34% 5 30% 8 Mobile SEO 30% 6 57% 4 Email marketing 27% 7 37% 7 Native advertising 24% 8 47% 6 Offline advertising 20% 9 20% 9
- 10. Sources: Preliminary Data, 2013 Publisher Investment Report Revenue gaps, tactical issues around audience monetization top publishers’ concerns
- 11. Sources: Preliminary Data, 2013 Publisher Investment Reportevan@digiday.com
- 12. Sources: Preliminary Data, 2013 Publisher Investment Report PUBLISHER INVESTMENT REPORT 2013 Confidential & Proprietary
Hinweis der Redaktion
- While online advertising began for publishers with the lowly banner in 1995, it certainly will not end that way for them. Driven by the twin engines of evolving consumer behavior and changing advertiser demand, publishing is now on the bleeding edge of a new age of digital ad sales and audience acquisition. On the one hand we have the increasingly brutal economics of an increasingly effective business (best represented by the key trends of RTB and programmatic buying). On the other hand we have new opportunities brought to bear through mobile and social content usage, and marketer demand to get closer to consumers via native advertising. Is this the proverbial half full or half empty glass for publishers and their ad sales teams?
- Much like what we saw in our Brand Investment Report (April 2013), publishers, like brand managers, are looking to aggressively evolve their organizations in the face of emerging digital ad trends around supply, demand, and accountability.Publisher organizations will restructure to capture revenue: Driven by demand and revenue pressure, publishers will restructure their organizations, with Programmatic, Premium Sales, and Native Advertising opportunities expected to have the MOST organizational impact going forward.When asked which advertising sales issues would be most impactful in driving internal organizational changes, respondents cast their votes (up to three each) loud and clear for Premium Sales (76%), Programmatic Buying (73%) and, a not-too-distant third, Native Advertising at 57%. Real-Time Bidding (RTB) and Display Sales (Non-Premium) look like they will also have an impact, but to a much lesser degree, coming in at 35% and 30%, respectively.
- Focus on Ad Exchanges & Direct Sales predicted to increase; Ad Networks stand to lose the most. Revenue generation by sales channel is expected to change quite a bit in 2015 relative to today. Ad Networks are expected to generate the lowest sales gains and over 40% of respondents expect sales for this channel to shrink by 2015.Revenue generation by sales channel is expected to change quite a bit in 2015 relative to today. Survey respondents were asked to gauge what percentage of their ad sales derived by each of four different sales channels might shift in the coming two years. Ad Exchanges and Direct Sales (both Premium and Non-Premium) are predicted to generate more sales, while Ad Networks are expected to generate the lowest sales gains and over 40% of respondents expect sales for this channel to shrink.Specifically, all three of the channels that respondents expect to account for more of the total revenue pie range from votes of 33% of respondents (Direct Sales – Non-Premium), to 43% (Direct Sales – Premium), to the big winner, 53% (Ad Exchanges). Ad Networks lag far behind – only 20% thought this channel would bear more fruit in 2015, with 43% saying the channel would actually decrease in its revenue contribution. Further to this point, on the opposite end – channels expected to account for less revenue in the next few years – 20% of respondents put Direct Sales (both Premium and Non-Premium) in this category, and Ad Exchanges at only 13%.
- Revenue Generation: Drivers and Inhibitors of Attracting Premium Revenues: Sponsorship & Video lead the charge for premium ad dollars: Display is a glass half empty; social potentially undervalued. As the display business has become increasingly commoditized by trends like Real-Time Buying (RTB) and programmatic buying, publishers have focused more on attracting premium-advertising dollars. Typically, “premium” refers to ad spend that comes from a direct interaction between a publisher and an advertiser or agency, and encompasses a wide range of creative executions, such as native advertising and content sponsorship in addition to display ads. Many publishers we spoke to view attracting premium advertising as a key area of focus for them going forward. “Our goal as a premium publisher is to maintain the integrity of our CPMs while at the same time thinking outside of the box to help our advertising partners meet their goals,” noted one publisher of a popular online sports property. “This doesn’t this mean I’ll walk away from things programmatic buying, or selling inventory via RTB, but it does mean that I’ll only do so as part of a larger, “premium” package that we construct, and that benefits both parties.” Sponsorship leads the charge as the most important type of advertising to attract “premium” ad dollars in 2013. Over seven in 10 respondents named Sponsorships as either very (27%) or extremely (47%) important in this respect. Not far behind were video (67% very or extremely important) and mobile ads (at 57%). Display and Native advertising are glasses half full (or empty) at 53% each. When it came to social media, if you asked three different respondents how important it was to attracting premium ad dollars in 2013, you were likely to get three different answers. The tally was split evenly among the three “importance” buckets: not at all/slightly (33%), moderately (33%) and very/extremely (33%). The takeaway? Perhaps social has found its niche for some and could potentially be undervalued for others.
- Going Native, but grasp may (currently) exceed reach: It’s clear from our survey that the vast majority of publishers are embracing native formats, in many cases re-aligning internal resources to better manage native advertising generation: A full 80% of respondents currently offer Native Advertising opportunities to advertisers. While the drivers of publisher adoption of native formats is clear, many still admit to struggling with execution: one in three rate their own efforts to date at creating content for advertisers as poor/ average with only 13% rating their efforts as excellent.Native backlash feared by some: One in five publishers we talked to said they saw potential consumer backlash as being the key inhibitor of driving adoption of native advertising. This was one of several concerns that came up in our discussions on the “cons” side of native advertising. Many we spoke to are also concerned about the blurring of lines between content and advertising that occurs when native ads are deployed.
- Mind the gaps - Mobile, Data Monetization lag: Seven in 10 admit to failing to monetize key areas of mobile and consumer data, and not a single respondent said his or her firm was excellent in its effort to monetize mobile assets.Respondents were rather harsh in assessing their companies’ success in fully monetizing both mobile assets and consumer data. In both cases, seven in 10 admitted to either only poor to average performance on those counts. In the case of fully monetizing Mobile Assets, 30% responded that their company’s efforts were poor, while 43% characterized them as average. The consumer data question yielded 40% voting the success of their company’s efforts at monetizing data it gets from sources like user registration data and cookies at poor, another 30% at average. For both questions, only 10% of people gave their companies a “very good” pat on the back, on the consumer data question another 10% said their firms were excellent in this respect. However, not a single respondent said his or her firm was excellent in its effort to monetize mobile assets. “Mobile is a huge area of frustration now,” noted Wetpaint’s Melissa LaCaille, “because it’s 50% of my traffic but generating revenue from that traffic is a challenge.” “Obviously, growth in mobile is tremendous, and we’re not sure how to align supply with demand, “added Daniel Callahan, Director, Network Sales, Fox News Digital, concluding “it’s a messy business.” As will be seen in more detail in the Key Issues section of this report, the issues of fully monetizing mobile assets and consumer data were both viewed as critical in the coming two years – the most critical, in fact, of the 15 issues we presented.
- How sites attract the audience they in turn sell to advertisers is a hugely important area of endeavor to publishers, and one that seems poised for some evolution over the next few years. To get a better understanding of how publishers were shifting in this sense, we asked respondents to rank the importance of a series of tools both today and their expectations for 2015, and the results prove that the pace of change in the field is indeed swift. Not surprisingly, in 2013, our respondents said that the most important audience acquisition tools were SEO (80% very important or extremely important), social media marketing (57%) and content optimization (56%). No other tool was viewed to be very/extremely important by more than 34% of respondents. In fact, five of the tools we asked about – mobile SEO, online display, offline advertising, email marketing and native advertising – were voted to be either not at all important or only slightly important by anywhere between 44% and 63% of those surveyed. Projecting forward to 2015, we see a focus more inline with a heavily mobile /socially skewed consumer experience. The top three tools remain the same, but the levels – both relative and absolute – couldn’t be more different. Content optimization kicks SEO out of the top spot, at 80% very/extremely important, with social media marketing still at number two but up a full 13 percentage points to 70% who view this as a very/extremely important tool, with SEO down in the third spot, albeit with a 67% very/extremely important rating. Another large increase is seen in mobile SEO, which reaches the fourth spot at 57% (it is at 30% for 2013).
- Key Issues: Better monetizing mobile assets, having a data strategy, brand safety & Ad effectiveness key; measurement issues seem less pressing [Fig 18] Earlier in this report we saw that respondents were not overly complimentary of their companies’ success in monetizing both mobile assets and consumer data. As we mentioned then, these two are, in fact, the issues that survey respondents view to be the most critical in the next 24 months. The ranking of the respective issues showed a clear hierarchy of concern, with closing revenue gaps the top line issue: “Better monetizing mobile assets” and “having a data strategy” were ranked highest, with a rating average of 4.1 & 4.07, respectively. The fat middle of the rankings put more tactical issues of audience monetization front and center, including ad effectiveness (3.79), targeting and retargeting (3.66), attribution analytics (3.62), qualifying audiences to buyers (3.48), and shift to audience-based buying (3.41). Meanwhile, at the bottom of the rankings, publishers showed moderate concern for more “philosophical” issues such as campaign ratings (2.97), Adoption of 3MS (2.90), the Ineffectiveness of professional organizations (2.79) and Online GRPs (2.62).