S.O.T.I. Presented by Audience Accelerator
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Digiday and Audience Accelerator surveyed over 500 sellers, buyers and marketers to understand their current attitudes and practices for audience extension. Hear the results from the largest study to date on this quickly growing category. Speakers: Paul Wenz, general manager, Audience Accelerator Jinenne Sutherland, director of client services marketing, Audience Accelerator
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S.O.T.I. Presented by Audience Accelerator
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- 3. 5 years 3 weeks 788 participants 10% brands 35% buyers 40% publishers
- 4. WHAT DID WE LEARN? AUDIENCE IS CRUCIAL THE MARKET IS GROWING PUBLISHERS ARE ALREADY SEEING POSITIVE BUSINESS RESULTS
- 17. 55% have tried it 45% have had favorable experiences 68% are likely to include on their campaigns
Hinweis der Redaktion
- Over the course of three weeks, Digiday polled its opted-in base of leading digital media and marketing professionals built from five years of attendance at leading-edge digital marketing and publishing events, and/or subscription to Digiday publications. Some 788 participants started the survey, of which nearly 10% identified their companies as brands, 35% as agencies, 40% as publishers and 16% as “other”. “Other” respondents were eliminated from the investigation, based on Digiday’s interest in deriving informed, unbiased commentary. More than 500 participants finished the entire study. Digiday then compiled the draft PowerPoint, with multiple filters (e.g. audience size and revenue), from which Audience Accelerator selected the data points that are most relevant for an industry that is pushing the envelope on building and extending its targeted reach.
- or advertisers, the key focus is on reaching the right audience and meeting campaign KPIs while protecting brand image. Audience extension’s promise lies in its ability to combine the high- quality engaged audiences of premium site buys with the increased reach and performance of programmatic buying. Media buyers plan to spend more of their display budgets on audience extension. They are now shifting funds previously given to broad networks to places where they can tap into premium audiences. Publishers are estimating that the amount of revenue they gain from audience extension will at least double in the next 12 months. Nine out of ten publishers have seen a positive effect on revenue as a result of offering audience extension solutions to advertising partners. Positive outcomes range from winning more money on proposals and winning new business to keeping business that would have otherwise been lost and meeting campaign goals that were otherwise unattainable. In addition, partnering with third parties such as networks and DSPs allows publishers to focus their internal teams on their core products including sponsorships and custom ad units.
- The advent of programmatic buying has had a major effect on publishers, forcing them to adapt to the availability of increasingly efficient audience targeting across a wide range of inventory sources. Of publishers polled, four out of five (84%) have made adjustments to their business to either compete with or take advantage of programmatic buying sources. This has led to a myriad of solutions. The most common are: making inventory available on exchanges to increase revenue while focusing on sponsorships, and utilizing custom programs and ad units or formats to emphasize unique value to advertisers over networks and DSPs. Many publishers, led primarily by large publishers (i.e. those with more than 50 million monthly unique visitors), are also participating in premium private exchanges.
- For many publishers, audience extension represents one way to generate this additional value for advertisers by leveraging programmatic buying. Today, nearly all publishers (90%) are aware of audience extension, and half (50%) currently offer it to their advertising partners. Of these, the majority have done so for two or more years, due in large part to audience extension’s early adoption by the largest publishers (i.e. those with an excess of 50M monthly unique visitors). Only a fourth (28.9%) of publishers offering extension have begun to do so in the past year—primarily smaller publishers who have taken longer to see the value in offering an audience extension solution.
- The majority of publishers offer audience extension solutions to advertising partners (64%). Most offer it on a campaign-by-campaign basis, though more than a quarter (28%) offer it on either “most” or “all” of their proposals.
- When doing this case-by-case analysis, publishers tend to include extension when it 1. addresses an RFP objective, 2. asks for data- driven, audience-based buys, or 3. when additional reach is needed to meet campaign-delivery goals. This is unlikely to change substantially in the next year, though publishers indicate that there could be some shift in the next twelve months toward including extension on more proposals: 38% of publishers now expect to include audience extension on campaign proposals “Always” or “Often” over the next 12 months.
- PUBLISHERS ADD AUDIENCE EXTENSION TO INCREASE REACH AND REVENUE Publishers choose an audience-extension solution primarily to increase their available reach and drive incremental revenue gains. Reasons for this vary by publisher size. For large publishers, i.e. those with more than 50 million monthly uniques, the largest draws are adding a unique value proposition to their offering and addressing an increasing number of audience-based RFPs. For these publishers, audience extension offers them a way to leverage varied content sources to address advertiser audience needs. For mid-size publishers (those seeing between 10 and 50 million monthly unique visitors), increasing reach and margin are the primary concerns. For these publishers, audience extension gives them a retargeting solution and helps them increase revenue by addressing advertisers’ direct-response needs, on which they would otherwise have had trouble meeting KPI goals. For small publishers, audience extension solutions provide a much-needed boost in reach that allows them to add incremental revenue by addressing more advertiser needs, be it retargeting, a multi- platform solution, or providing a unique value proposition.
- For publishers offering audience extension, the benefits with regard to revenue vary, but nine out of ten publishers have seen at least one positive effect on revenue as a result of offering audience extension solutions to advertising partners. These include winning more money on proposals (46%) and winning new business (42%) (the most commonly-reported effects), keeping business that would have otherwise been lost (38%), and meeting campaign goals that were otherwise unattainable (36%).
- Ultimately, this translates to incremental revenue growth. Publishers currently report that up to 10 percent of their ad revenue comes from audience extension buys, though the expectation for most publishers is that this number will increase substantially over the next 12 months. During this time, a third of publishers expect their revenue from audience extension buys to be between 10 and 20 percent of their total revenue. For publishers pitching audience extension on a more regular basis, this figure is even higher, with most publishers in this category (those who “Always” or “Often” include extension solutions on their proposals) expecting 20-40 percent of their revenue to come from extension buys over the next 12 months. Pricing for extension inventory varies on a publisher-by-publisher basis, though the majority of publishers tend to price extension CPMs the same or lower than their average. One in four (26%) publishers ask higher CPMs for audience extension buys when compared to on-site inventory, which is a more common practice among large publishers.
- As a result of being early adopters in the audience extension game, more than half (53.6%) of large publishers leverage in-house ad networks for audience extension, compared to only a third of smaller publishers. This reliance on older methods for audience extension may be due to the time and money investment required to move away from network integrations among those publishers that were among the earliest adopters. Large publishers are also more likely to leverage demand-side platforms, SSPs, and seats on exchanges for audience extension. Interestingly, for those publishers who are the most likely to offer extension on plans adding a unique value proposition is the primary means for choosing an audience extension solution (72%). The majority of publishers (61%) choose a platform for audience extension within three to six months, though many (41%) do so within three to four months, particularly large publishers. Fewer than a third of publishers finish their decision-making process within two or fewer months. As the size of the publisher increases, so too does the number of stakeholders involved in making the decision regarding which platform to partner with. Larger publishers (50M+ monthly uniques) are significantly more likely to have multiple key decision-makers (and more of them) involved in the process, and are by far the most likely to name the ad operations team as a key decision maker (57% vs. 33%- 39% for small and mid-size publishers). Sales organizations are also more empowered at larger publishers, with a third of large publishers saying their sales team had a major role in platform decisions, compared to only a quarter of small and mid-size publishers. On the flip side, CEOs play a much larger role in the decision among small publishers, among whom one in five (21%) listed their CEO as a key decision-maker. This declined to 17% for mid-size publishers and 14% for large publishers, where this role was largely replaced by the CTO, whose involvement jumped from 5% at small and mid- size publishers to more than a quarter (28.6%) of large publishers. Among organizations of any size, it is clear that ad operations and sales are the most likely organizations to provide input on the platform decision. Ultimately, these are the two groups responsible for the implementation of the platform and pitching of the solution. When choosing an audience extension solution, the most common method is working with a third-party ad network (57% of publishers). Many publishers opt instead to work with in-house networks, ad-server integrations, DMPs, and DSPs.
- When choosing an extension platform, the key factors in the decision tend to be data privacy (likely a result of the value and role of first- party data in audience extension solutions) proven results, ease of use and implementation, and the ability to choose sites based on available brand-safe inventory (in turn preserving one of the core value propositions of premium-content site buys). More than half of publishers are also concerned with a platform’s ability to retarget and offer reach across multiple screens.
- For advertisers, the key focus is on reaching the right audience and meeting campaign KPIs while protecting brand image. For these advertisers, the promise of audience extension lies in the ability to combine the engaged, high- quality audience of their premium site buys with the increased reach and performance provided through programmatic buying. The increased reach and efficiency that results means there will now be more time to focus on other duties, and the ability to increase budgets over a smaller number of sites offering extension.
- OVER HALF OF ADVERTISERS LEVERAGE AUDIENCE EXTENSION Most buyers have at least a passing familiarity with audience extension, and nearly a third (30%) are very familiar with the concept. However, familiarity was not prerequisite for usage as just over half (55%) of ad buyers have partnered with a publisher offering audience extension in the past. On the whole, ad buyers tend to be more familiar with the concept of audience extension than the platform brands serving as extension solutions for publishers. Those ad buyers that have partnered with a publisher offering extension tend to be pleased with the results they’ve had, as more than two thirds rate their experiences as “good” or “excellent.” As a result, most (58%) view audience extension favorably. The same percentage of ad buyers are likely to include audience extension on future campaigns, and only 13% of advertisers have currently ruled out its use on a future campaign. Advertisers are not only likely to use extension if presented to them, but more than a third (37%) are more likely to allocate more budget to publishers offering audience extension solutions.
- ADVERTISERS USE AUDIENCE EXTENSION TO GET MORE OUT OF PREMIUM-CONTENT BUYS Advertisers primarily see audience extension as a solution for direct-response campaigns (55% say they are most likely to apply audience extension to a direct-response campaign). However, of those, nearly a third see the benefit of adding audience extension to branding campaigns. Advertisers see audience extension as a way to get more out of their buys on premium content sites for direct-response and branding campaigns. For advertisers, the real value of audience extension is the ability to see a greater ROI on their premium-content site buys. Therefore, extension solutions need to improve value without diminishing the core value proposition of a premium site.
- Just like with their premium-content site buys, advertisers tend to associate extension buys with reaching a unique audience in a high-quality, brand- safe environment—albeit one that offers greater audience customization and reach. As such, when it comes to evaluating a proposal that includes audience extension, brand safety is still the #1 concern among advertisers, followed by how likely it is that the extended inventory will provide the same performance as the premium-content site inventory. Compared to direct buys with a DSP, advertisers prefer the access to quality, brand-safe inventory afforded by extension buys with a premium site, and feel that extension buys more closely align with their brand objectives (and as a result, are much better-suited for branding campaigns). Additionally, advertisers feel that audience extension buys with a premium site are more likely to offer a unique audience over DSPs. Publishers leveraging audience extension solutions should focus on these value propositions when presenting to advertisers.
- ADVERTISERS PLAN FOR MORE AUDIENCE EXTENSION IN 2014 Ultimately, half of advertisers plan to allocate more budget to audience extension buys in 2014, primarily shifting budget away from networks (49% expect to allocate less budget to either broad or niche networks in 2014) and standard premium-content site buys (14%). For many of these advertisers, this is part of a standard move toward using fewer partners as a result of the advent of programmatic buying. However, nearly half of these advertisers (46%) also prefer the additional control over campaigns they feel that programmatic buying and audience extension give them.