Category: Affiliate Marketing Tips

This article summarizes a Digiday Publishing Summit panel in March 2023 moderated by Maayan Segal, vice president of clients at Primis, with panelists Scott Solomon, vice president of DV and platform at Magnite, and Matt Burgess, senior vice president of revenue operations at Freestar.

Balancing quality content and viewability is critical for video ads

Publishers are always balancing user experience and monetization and looking to maximize their revenue. One way to ensure success this year will be to maintain a favorable position in supply and demand. Total digital ad spending will grow by 10.5% this year, but not all publishers are experiencing the benefits of this growth. Video inventory isn’t seeing growth at the same rate as ad spending, and some publishers are missing out on potential revenue as a result. 

For publishers, monetization and user experience are critical; matching ad monetization with native content will be one way publishers can prioritize both. Finding the right combination between the two is essential. Quality content and optimizing the mix between player size and viewability are key. Finding a partner who delivers accurate and consistent reports will give the greatest overall yield.

Shifting classifications and strategies for in-stream video

Another hot topic in the world of video is the new video specifications. IAB Tech Lab’s new definitions will affect the video revenue of every publisher. When the previous definitions were established in August 2022, the criteria of what constituted in-stream was narrowed. About 90% of the video supply that would’ve otherwise been considered in-stream video was categorized as out-stream inventory. Many buyers only buy inventory classified as in-stream, so this reclassification became a threat to publisher revenue. 

This also left companies in a gray area; for some, their inventory didn’t fall into either one of the existing definitions. 

Ad tech companies, including Primis, struggled in this in-between to understand where their inventory fit. In response, Primis developed Primis Next, a video discovery technology built to serve relevant content to users, but that the IAB definitions labeled as out-stream, placing it in the same category as other products that do not run alongside content.

One of the most significant changes of 2023 is the recent release of new definitions to address the variety of video formats more effectively. The new specifications will add a layer of transparency to the programmatic supply chain and help marketers purchase video inventory more efficiently and accurately. While this change is a net positive, publishers and exchanges must prepare their resources to shift their strategies in response. The cost of in-stream video is sure to rise due to the new specifications, putting it at a premium level above the rest.

Driving efficiency and value with SPO is increasingly critical

Supply path optimization is already important and becoming increasingly critical to publishers, but it means something different to every company and is not a one-size-fits-all approach. 

Many companies have been investing heavily in SPO for years already. Companies that evaluate their needs, know how to ebb and flow in this evolving landscape, and adjust their strategies accordingly are the ones that thrive. 

The challenge in SPO for publishers is evaluating the bang for their buck. Every organization on either end of the ad tech supply chain measures its efficiency by understanding what makes them achieve its goals faster, cheaper and more effectively. Though working with intermediaries might not be the most direct route from Point A to Point B, if they optimize processes, add valuable services or products or maximize potential revenue, adding a few more links to a path is better than sacrificing them for a shortcut. Aiming for the most direct path while ensuring every member of the supply path brings value is the ultimate goal. 

The digital video landscape is evolving, and changing standards and technological innovations on the horizon will be challenging to navigate but will present publishers with new opportunities. All of these changes, along with the massive growth of CTV view time, will present an opportunity to strengthen the supply chain while still giving users the video experience they love. From walled gardens to the open web, video has been on the rise and will continue to be a prosperous revenue stream for publishers this year.

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In fact, according to a Digiday+ Research survey of 112 publisher professionals, publishers make a significant portion of their revenue from programmatic ads, and most of that programmatic revenue comes from the open market.

Overall, Digiday’s survey found that programmatic ads continue to be a big business for publishers — and there is still room for growth in the category. Eighty-five percent of publisher pros said they get at least a very small portion of their revenue from programmatic ads as of Q1 2023, up from 78% six months prior. And 84% said they will put at least some focus on growing their programmatic business in the next six months, up from 76% in Q3 of last year.

Among the publishers who make money from programmatic ads, it’s likely they make a large amount of money from this revenue stream. More than one-third of respondents to Digiday’s survey (38%) said they make a large or very large portion of their revenue from programmatic ads. This percentage is on par with two years ago, when 37% of respondents told Digiday the same, but it is a rebound from 2022, when between 30% and 32% of publisher pros said they got a large or very large portion of revenue from programmatic. Comparatively, around a quarter of publisher pros have said over the last two years that they make a small or very small portion of their revenue from programmatic.

And publishers’ programmatic ads businesses are likely to grow, if anything. Forty-five percent of publisher pros said in Q1 of this year that growing their programmatic business will be a large or very large focus for them in the next six months. This is consistent with the 43% who said the same in Q3 2022, but it is a big jump from the 32% who said so in Q1 of last year. Meanwhile, only 18% of respondents to Digiday’s survey said in Q1 that programmatic would be a small or very small focus for them in the coming months.

Digiday’s survey found that there is a big difference between how dependent large publishers are on programmatic ad revenue, compared with their smaller counterparts. A whopping 93% of large publishers get at least a very small portion of their revenue from programmatic ads. That percentage drops to 72% among small publishers.

And among the publishers making money from programmatic ads, there are some big differences between how much money large and small publishers make from this part of their business, Digiday’s survey found. Twenty-seven percent of publisher pros who work for large publishers said they make a moderate portion of their revenue from programmatic ads, compared with 17% of publisher pros who work for small publishers, and 32% of large publishers said they get a large portion of revenue from programmatic, compared with 22% of small publishers. The differences continue even into the very large category: 17% of large publishers said a very large portion of their revenue comes from programmatic, compared with just 8% of small publishers.

The difference between how large and small publishers make money from programmatic revenue is unlikely to change this year, Digiday’s survey found. While 93% of large publishers said they will put at least a very small focus on growing their programmatic ads business in the next six months, only 75% of small publishers said they will do the same.

Nearly a third of publisher pros who work for large publishers (32%) said growing their programmatic business will be a large focus for them in the coming months, and more than a quarter (27%) said it will be a very large focus. Meanwhile, 19% of publisher pros who work for small publishers said growing their programmatic business will be a large focus, and the same percentage said it would be a very large focus. These are significant differences between these groups.

Of the small publishers who said they would focus on growing their programmatic ads revenue in the next six months, the highest percentage said they would put a moderate focus on this part of their business: 28% of respondents to Digiday’s survey who work for small publishers said this.

Among publishers who get revenue from programmatic ads, Digiday’s survey found that they’re much more likely to make a large amount from open market programmatic ads over direct-sold programmatic ads.

Twenty-seven percent of publishers who get revenue from programmatic ads said in Q1 of this year that they get a large portion of that revenue from open market programmatic ads, compared with 15% who get a large portion from direct-sold programmatic ads. Meanwhile, 26% of publishers get a very large portion of their programmatic revenue from the open market, compared with 9% who get a very large portion from direct-sold programmatic ads.

And the percentage of publishers who told Digiday that a large portion of their programmatic ad revenue comes from the open market saw a big jump in the last six months. Nineteen percent of publisher pros who get revenue from programmatic ads said they made a large portion of that revenue from open market programmatic in Q3 of last year (which remained steady with the 18% who said so in Q1 of last year). That percentage rose to 27% in Q1 of this year.

Meanwhile, the percentage of publisher pros who said they get a large portion of their programmatic revenue from direct-sold programmatic ads fell over the last six months. Fifteen percent of publisher pros told Digiday in Q1 2023 they get a large portion of their programmatic revenue from direct-sold, down from 24% in Q3 2022 and 23% in Q1 2022. At the same time, the percentage of publisher pros who said they get a moderate portion of their programmatic revenue from direct-sold rose from 21% in Q3 2022 to 33% in Q1 2022.