This article was previously published on MediaPost.
When it comes to online publishing, every pixel counts. Maximizing the potential of digital real estate is an ongoing challenge. Often getting visitors to a website is the first hurdle, but keeping their attention and finding engaging monetization opportunities continues to be an ongoing struggle.
A popular tool in this arena is content modules on article pages. Many publishers implement content modules for the recirculation of visitors within their website. Some use them as a source of revenue. And still more use them for both.
Many traditional recommendation engine companies are undergoing shakeups (sales, closures, rumors of IPOs). More and more businesses are vying for the same end-of-article positions using programmatic technologies as an extension to native in-feed placements.
So here’s a look at what two different monetization strategies mean to publishers.
Guarantees are not for everyone and might not always be the best option.
The privilege of being a premium publisher is that different vendors with the same value proposition compete to work with you. The dark side of ad technology is that some of these vendors/networks pay guarantees to access real estate on publishers’ pages. Who is the real customer of your vendors/networks?
In the world of recommendation engines, Outbrain recently inked a deal to pay a whopping $100 million dollars to Time Inc. And after launching its “Recommends” product, Yahoo is rumored to have offered guarantees to its initial launch partners. Only time will tell how these guarantees pan out for the parties involved.
What does this mean for publishers?
By all means, take the guarantees if you can get them. Not everyone will. It’s impractical to imagine a world where vendors will pay flat CPMs for all of a publisher’s audience. Also, guarantees are not the end game. There’s a very high probability that the publisher might be leaving revenue on the table. Publishers can avoid this trap by incorporating multiple methods to maximize revenue and by making their guarantees the floor pricing.
Most buyers are not brand advertisers, but that is changing.
Unlike many other digital ad formats, the majority of buyers on recommendation widgets have historically been publishers purchasing cheap clicks. It is understandable that publishers are limited in what CPMs they can pay. Buyers pay a few cents per click (enough to arbitrage) and drive traffic to their high revenue pages (video or sponsored content).
This practice is changing. It is now possible to take engaging branded content and help advertisers distribute these assets via in-feed placements. Many times these placements include the coveted end-of-article positions. Buyers are using both self-serve UIs and programmatic pipes to reach these positions.
What does this mean for publishers?
Smart publishers should look at their end-of-article placements and drive up the value by employing ways to drive brand CPM dollars into the same placements along with the regular CPC dollars. On one end you have traditional recommendation engines that deliver low CPCs and average quality content with high fill-rates. On the other end, you have native in-feed companies that offer high CPMs, great quality content and growing fill-rates. Deciding between these two options can be overwhelming for publishers. Publisher should use tools to create competition among various networks/partners and maximize their in-stream and end-of-article revenue by automating the yield optimization process.
The first generation of content modules was about delivering new revenue and revenue streams, and that’s great. Today’s “You Might Like…” networks did exactly that for publishers. But the next generation will require much more sophisticated technology in order to scale.