Affiliate Idea Factory

At the beginning of 2020, after seeing no data suggesting positive lift from resellers, the publisher trimmed any supply-side platform partners that delivered less than 5% revenue. Of the nine SSPs remaining, down from 15, it cut loose all ad resellers from those partners, according to its ads.txt file, so any deals are done direct with those exchanges. 

“We were told as publishers that resellers were so important,” said Emry Downinghall, vp of advertising at Chegg Inc., “but no [publisher] has communicated to me they removed resellers and lost X% lift.”

Programmatic ad revenue is a “small but meaningful” slice for the publisher, which wouldn’t say exactly how much. While the majority of its revenue comes from subscription services, most of its ads are sold on the open exchange and non-guaranteed. Downinghall said it delivers between 20 and 25 billion impressions a year. In April, Chegg, based in the U.S., had 9 million monthly unique users, according to Comscore.

Ad reseller activity is one theory accounting for the lost 15% of revenue within the programmatic supply chain, according to the transparency report by the Incorporated Society of British Advertisers, the Association of Online Publishers, carried out by PricewaterhouseCoopers and released early May. Additionally, a cross-industry task-force has been set up to improve transparency but the AOP and others have recommended publishers scrutinize contracts and reduce intermediaries to potentially reduce the 15% gap. Examples of untangling the mess under the umbrella of supply-path optimization will likely continue to grow. 

But given the murky nature of the programmatic ecosystem, it’s difficult to pin down every single reseller in a given impression sold and it’s also hard to track the reseller fees throughout the chain.

“Publishers are asking more questions of SSPs about ‘why does this reseller exist,’” said Ari Lewine, co-founder of exchange Triplelift. “It’s the indirect paths that are being questioned.”

Chegg gradually removed resellers from its ads.txt file, while keeping a close eye on the data as there’s no clear way of A/B testing SSPs with and without resellers.

“I never heard a fully compelling reason why resellers were there,” said Downinghall. “In some instances, I was told they were required to be in the exchange in order to run some [private marketplaces], I was never able to prove that out. It’s up to publishers to decide what they will and won’t run.”

Other publishers, like Bloomberg Media, are taking a closer look under the hood through demand-side optimization, analyzing how impressions are being bought rather than sold. Similar to supply-path optimization, DPO-minded publishers collect different data sets—like win rates, response time, page load and ad quality— to work out exactly which partners make sense for it to work with.

Bloomberg Media has been on this route since the end of 2019 and pegged this summer as when it should have worked out which SPO and DPO options make the most sense. 

“Unquestionably it will improve yield, more revenue will be back in the hands of the publisher, clients will have full transparency of where the money is being spent,” said Simon Baker, Bloomberg’s head of programmatic Europe, the Middle East and Africa. “Bloomberg is a data and tech company with transparency at its core, that’s why DPO makes so much sense. Ads.txt has gone a long way, but not far enough.”

Earlier tight economic market conditions forced publishers to incentivize short-term gain over longer-term health. As demand became more scarce and the ad premium fell when marketers pulled ads out of the open exchange, the temptation would be to plug in more demand sources in order to increase bid density. That could drive short-term revenue but makes for a more complicated picture of which buyer is bidding on what inventory. For publishers, managing multiple relationships takes up time.

For Chegg, having direct relationships with SSPs and confidence in their solvency was imperative to protecting its ad business for the long term.

“I couldn’t say resellers are bad, but I can say they haven’t helped drive up lift in 2020,” said Downinghall. “In 2018 or 2019 that might be different. Now with further emphasis on SPO, this is at least putting you in the best position to succeed, especially when removing resellers did not hurt performance.”

Original sins never go away. These will not either. But there is now an opportunity, thanks to both the Facebook ad boycott and moves to rein in ad tracking, for quality publishers to steer advertisers back to caring where their ads run. Last week, I expressed skepticism that a group of brands would suddenly become social justice champions and stomach a fight against Facebook that would seriously impact their bottom lines. I still have my doubts, although the number of advertisers joining the effort has surprised me. Unhappiness with the status quo has built for some time. Facebook is currently using its typical playbook of “listening” without budging much. Zuckerberg is reported by The Information to have told employees yesterday that advertisers would return “soon enough.”

That insouciance likely come from a stark reality: the leverage isn’t on the advertisers’ side in a battle with Facebook. They’re addicted to the scale, performance and ease of buying Facebook provides. The idea of recreating that through individual publishers is far fetched. What could be possible, however, is a rebalancing. Publishers from the start of the Internet have advocated for greater weight being paid to quality and trust — admittedly two squishy concepts. (I remember when YouTube CEO Susan Wojicki was asked about “premium content,” and she talked instead about “premium audiences.”)

In the early days, publishers trotted out the lure of a “clean, well-lit place” rather than the anything-goes world of ad networks. Then the watchword became “brand safety,” which ended up being the digital media equivalent of “fake news,” turned into a tool to be used for all kinds of purposes. Witness how “brand safety” was used to block ads on news coverage of Black Lives Matter. One publisher told me their coverage of BLM and protests against systemic racism generated 40% less revenue than pages on other topics.

My former colleague Lucia Moses had an homage to our long-running Confessions series with an anonymous interview with a top marketer who said “half the CMOs out there are sincere.” My snarky retort was to parrot the probably apocryphal John Wannamaker quote: The trouble is you don’t know which half. When the summer ends and the fourth quarter looms, that is when we’ll see who is posturing or playing to the crowds, including upset employees, and who is truly committed to forcing Facebook to change.

What’s unclear, to me at least, is what exactly these marketers want. The idea that Facebook is suddenly a platform with all manner of ugliness is farcical. Advertisers are famous for their “gambling in Casablanca?” reactions to an obvious reality: There are dingy parts of the Internet, and their emphasis on “efficiency” and blasting ads to hundreds of thousands of places means they will sometimes end up surrounded by squalor. Spare us the shock. Back in 2017, advertisers loudly harrumphed over YouTube carrying jihadi and other harmful videos. Who in their right mind wouldn’t expect that?

“This narrative isn’t really anti-Facebook, it’s anti-aggregation, anti-platform,” said Jarrod Dicker, vp of commercial at The Washington Post. “The publisher landscape is built on ethics and trust.”

The opening here is advertisers moving beyond myopic views of brand safety and considering the overall trust level of the platform or publisher. Facebook can assure advertisers it will keep their ads away from hate content, but advertisers are now asking whether being on a platform that has so much hate messages disseminated is really one to do business with since it will carry a broader risk to their brands. In the end, if this protest is to result in lasting change, it needs to align with business goals of brands. 

Advertising budgets are “not going to rebalance because content adjacency is morally good, but because I don’t think Facebook really sells as much stuff as people think it does,” said the media buying exec. 

Facebook is going to remain a behemoth alongside Google and Amazon. For meaningful budgets to shift, publishers must narrow the gap on performance. “You have to at least get close,” said a digital media CRO. “What I’m hoping for is a sustained reallocation of money,” the CRO added. “Advertisers have 40-50% on Facebook. You stop, then maybe it goes back to 25-35%. We can we siphon off some of it.”