Advertising Transformed: The Publisher’s Dilemma

Editor’s note: This is part one of a two part post.

The expanding online advertising market presents publishers with substantial opportunities for dramatic revenue growth. It also presents significant challenges that will require publishers to transform their advertising operations in order to capture the full revenue potential. With the right strategy, however, publishers are in a position to radically increase advertising capabilities and revenue. To accomplish this, publishers must establish a single unified advertising platform to sell, package, create, schedule, manage, track, and invoice comprehensive advertising campaigns across the entire print and online spectrum.

As the online advertising market expands, it is also fragmenting into an increasingly diverse array of digital categories: mobile, display, video, social media, search, and more. Each category features its own unique requirements for ad formats, management, and delivery. This proliferation has made it difficult for advertisers to plan and coordinate campaigns across the full spectrum of online opportunities; there are simply too many advertising channels, contacts, and interfaces in too many places.

Publishers have attempted to address the proliferation of advertising categories with separate operational divisions: print, digital, mobile, and more. This creates significant inefficiencies for both advertisers and publishers—different contacts, logistics, invoices, and more. Improving operational efficiencies in each division may realize a small amount of new growth, but fails to capture anything close to the full potential of the online market.

This is the publisher’s dilemma. To maximize revenue growth, publishers must consolidate all advertising solutions, both print and digital, onto a single platform. Publishers have the existing advertiser relationships, detailed user knowledge, and the human and financial resources necessary to establish a powerful presence in the advertising world of tomorrow. They must take advantage of their unique position to establish themselves as the complete advertising solution across print and online properties. And they need the right solution to make it happen.

The Publisher’s Dilemma

Most publishers have responded to the fragmenting advertising market with separate divisions. Print, web, and mobile advertising are split into separate, largely isolated, silos. As a result, the advertiser is approached by different people selling different things:  ‘availability’ in terms of print ‘space’ or a volume of web ‘avails,’ etc. To further complicate things, Sales is often split from Operations which is often split from Billing. These divisions create significant inefficiencies for both advertiser and publisher—and present a major obstacle for advertising revenue growth. The root of the problem is this: Advertising operations are broken at the enterprise level.

As publishers look to improve advertising revenue, they often focus on optimizing these organizational silos rather than approaching the challenge on an enterprise level. Publishers deploy sales force automation tools (often masquerading as broader Customer Relationship Management tools) to improve print sales.  They attempt to grow digital advertising revenue (usually banner ads and other display advertising) by selling remnant inventory to ad networks and improving tagging. They create new sub-departments to handle new formats and platforms like video, mobile, and tablet advertising. 

These are all valid initiatives, but the overall strategy for revenue growth is misplaced. Print ad operations may be very efficient when looked at in isolation. Web may efficiently sell and traffic banner inventory, including deals to maximise the value of remnant inventory.  New formats like video and mobile are outsourced to third-party networks who have scale. These are all sensible decisions within the context of these sub-departments but fail to address the core problem.

Advertisers must interact with separate divisions to reach audiences across different media.  Consumers are presented with advertising messages fragmented by media type, a problem compounded by mixed advertising messages across different channels. And the number of new devices and ad types is growing rapidly, further complicating the situation.

Why do so few print sales people succeed in selling digital?  It’s not the sales people. It’s the hassle and complexity of underlying operations. Selling a range of ad types requires coordination across multiple platforms, internal divisions, and third-party platforms. At an enterprise level this is a mess.

The next post will explore the solution to this problem.

Part 2: Advertising Transformed – The Solution to be posted on Monday November 29.