Walk Like a Publisher

You thought that DSPs shook things up in media? I’ve got a feeling that was just a pre shock of what’s in store for us. In the last year innovative brand marketers have begun behaving more like publishers by taking control of content creation, monetizing owned media, and requiring their agencies to get more sophisticated about media buying. In 2012 more brand advertisers will follow their lead.

Owned Gets Monetized 

Just like brands paying a premium for an end cap in a brick-and-mortar store, online retailers are offering up prime digital shelf space on their websites. It’s an ideal way to reach in-market shoppers in the last few inches of their path to conversion and represents the most concentrated form of contextual targeting available. On-site-media allows Retailers to diversify revenue by monetizing their web traffic. Suddenly the 95% of visitors who do not end up converting become a realtime in-market audience that Retailers can deliver to Advertisers. This can come in the form of something akin to banner ads (ick!) or something more interesting like featured products, brand reviews, page takeovers, or other branded content.

The value of this media to brand advertisers is mind boggling, and the fact that it easily fits into their existing co-op advertising strategies means there is a budget line item earmarked for it as well. Scale isn’t an issue either. The traffic that a Wal-Mart or Target site generates would easily qualify them as a premium publisher.

Earned Gains Importance

Recent years we have seen tectonic changes in influence. The days of brands being able to rely solely on traditional media channels to reach audiences have ended. Media democratization has given rise to a plethora of attention stealing channels. Journalists, bloggers, customers, brand fans, influencers, investors, employees…they can all effectively spread a brand’s message far and wide. The key for savvy brands is arming these influencers with quality content.

Additionally, consumers have also adapted by developing an ability to synthesize information from multiple media sources simultaneously. Brands that are not engaging their audiences across multiple channels in a coordinated manner will increasingly lose ground to brands that do. This also requires a shift to more authentic communication that includes a feedback channel and 1-on-1 customer marketing for even the biggest brands.

And Paid Goes the Way of Hog Bellies 

Wenda Harris Millard had the most memorable line in online media a few years back while running media at Martha Stewart Living Omnimedia.  She said, “We must not trade our advertising inventory like pork bellies”, referring to premium publishers’ real fear that programmatic exchange buying would devalue their differentiate inventory as it bypassed their traditional sales mechanism and dumbed everything to remenant. Whether she knew it or not, her remark was mere foreshadowing of what is surely coming.

I’m no investing expert, but I’ll explain it the way it makes sense to me. First of all, let’s clear up a misconception that’s out there. Though the media agencies like to refer to their programmatic exchange buying capabilities as “Trading Desks,” they aren’t trading anything. Put simply, they are placing bids in an auction based on perceived value of a cookie that lies behind an impression. This is in fact a key distinction to futures buying, and an opportunity to align online media buying closer with something that flush brand advertisers are comfortable with: TV Upfronts.

Instead of “Spot” buys on the current exchanges, where media is bought with the guarantee that those impressions will deliver consumer profiles with specific demo, geo, intent, and is intended to be used either immediately or in close proximity of the transaction; “Futures” buying guarantees only that the impressions will be available at a future agreed upon time and at an agreed upon price. Because there is no actual cookie present at the time of the deal, there cannot be a guarantee to the actual value of the impression. The risk that market volatility pushes the value higher or lower is mitigated by hedge investors in the form of a clearing house. Because market volatility is binary, the clearing house guarantees the deal price and the benefiting party pays the difference back to the investors.

Futures contracts benefit both buyers and sellers by locking in a mutually acceptable price and by transferring the risk and rewards to third-party investors. Both are are served in different ways as well. Because futures media buying makes cookies irrelevant, publishers can better attach premium value to their ability to deliver a unique audience at scale, while avoiding the risk that some tier 3 impression claims their conversion in a last-click attribution model. Brand advertisers, who have been reluctant to dump major budget into exchange buying, can better leverage their buying scale with guaranteed upfront deals. It’s a win win, so you know it won’t work

Happy holiday of your choice!