Supply vs. Demand: Part 1

This article is part one in a three-part series addressing the supply and demand that drives the digital advertising industry and how working together will move the industry forward.

We work in a high-volume, transaction- driven industry. On the one side are publishers trying to monetize their audience, influence, and web traffic by selling ad impressions (Supply). On the other hand are agencies, exchanges, and networks trying to deliver value to the brands. These are ultimately the ones putting money into the ecosystem by paying for the campaigns transacted upon (Demand). The major problems in this industry: i.e. fraud, lack of education, and lack of talent, are merely symptoms of someone on one side of the transaction trying to exploit the party on the other side of the transaction. This brief article will hopefully serve as a gentle reminder that we are all in this together and if we can work together to solve issues we can create an ever growing industry where everybody wins.

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Part 1: Supply

Over the past 5 years, we have worked with thousands of publishers. During that time we’ve tried hard to educate publishers about where their ad revenue actually comes from. Some publishers don’t actually care about the advertisers paying them to publish online content. They engage in activities that erode the value of their site. Some even end up getting black-listed by pushing the limits of the industry by buying traffic they didn’t earn or placing ads on their site they know will never be seen by their readers.

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An open letter to publishers:

Dear Publisher,

We love you but please realize that the way that you view ad performance is backward. A customer is defined as “a person or organization that buys goods or services from a store or business.” When it comes to your ads your customer is not your readers but your advertisers. You are a supplier of a commodity (ad impressions) that is currently traded at a rate of 100-200 Billion times per day. Yes, your content is a little unique from others but your audience, a.k.a. why advertisers pay you, go to many other sites online each day. The key problem is rather than alter what you do to deliver more value to your customer you’re first thought is to find another customer that will pay you more. Nobody can blame you for wanting to sell your inventory for the highest possible price the problem is when you expect to get top dollar without improving the value of said inventory.

Sincerely,

Nathan Putnam

A great example of this is the metric of viewability. If you have no idea what it is or if you can’t explain it to a 5-year-old then please read up on it from the IAB. Viewability is far from the only important metric but it’s a great litmus test to show how much garbage inventory is being sold every day. Google states the 56.1% of all ads are not viewable. Additionally,  a recent report showed that even programmatic viewability rates have only recently climbed to a mere 50.1%. Meaning that for the first time just over half of the ads that advertisers are buying programmatically are even going to be seen by a person. If you are a publisher and you don’t know the viewability of each of your ads then please change and stop dumping garbage into the system. If you can make the commodity that you’re selling more valuable to your buyers then more advertisers will want to buy it and you will make more money.

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Please understand how your site is viewed by advertisers and work to help them accomplish their goals. Adding more ads to your site just to make a little more money may deliver a few more bucks in the short run but will continually erode as it does not bring any extra value to buyers. Having too many ads on a single page or clustered together will disqualify you from a lot high CPM campaigns. Publishing any content that even comes close to being not brand safe is very dangerous. Not only can it get your site blacklisted by Google but other ad exchanges as well.

The good news is we’re here to work with you navigate the world of monetizing your site. There’s a fine line between keeping readers and advertisers equally happy and the solution is different for each individual site.  

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