Current conditions are presenting publishers with a unique conundrum.
There are huge traffic spikes—as much as 68% for news sites—offering an opportunity to super-size digital media monetization. But to harness it, they must first tackle the COVID-19 disruption to advertising budgets and their internal resources.
It’s not as impossible to solve as one might think. Given the right ad operations mix, publishers can gather the core components for long-term success: rapid response capacity, robust troubleshooting, up-to-date insight, and continuous revenue growth in any economic climate.
Achieving that balance, however, is where the challenge lies. Many publishers will have to face the tricky question of resourcing their teams—whether to go in-house or outsource. With infinitely varied publisher needs, there’s no single answer. But it’s also true that most publishers will need to consider the same core factors, starting with cost.
We spoke with Ivan Ivanov, COO, PubGalaxy, about what publishers can do to balance ad ops in unstable times, especially when it comes to managing resources effectively.
Lynne d Johnson: Right now, while most people are either working from home, laid off or furloughed, digital media traffic is soaring. But all of that traffic hasn’t necessarily resulted in incremental revenue for publishers. In fact, most marketers have paused spending during the pandemic. How can ad ops teams be most efficient right now, especially if they’re dealing with fluctuations in business?
Ivan Ivanov: When it comes to ad setup, determining the best path is often a case of resource availability.
For in-house options, the main factor is hiring. Taking on employees is a significant investment across regions, but especially in the US where the cost-per-hire is nearly $5000 in publishing.
With some publishers needing multiple people to coordinate ad ops, costs can spiral fast; and that’s before considering the difficulty of hiring in the current situation and whether expenses will be worthwhile. While sizeable resources are crucial at peak times, they could be a drain on the bottom line in quieter periods.
In contrast, outsourcing ad management can be more cost-effective, with publishers tapping into additional people power as it’s needed; often via flexible contracts or revenue-share models, which mean fees are charged as a percentage of the results agencies drive and gives them extra motivation to improve yield.
Of course, the benefits can also depend on individual circumstances. For example, those with smaller-scale activity that requires two people at most or minimal reliance on digital ads to drive revenue may be better off keeping the bulk of operations in-house.
LdJ: In this current climate, ad ops teams are juggling a lot. Trusted publishers are dealing with keyword blocklists preventing brands from running advertisements next to valuable COVID content or content related to racial injustice. They’re trying to comply with CCPA. And they’re figuring out how to survive in a cookieless world. Does it really make sense to bring in outsourced ad management right now?
II: If publishers want to maintain a steady flow of demand, this makes it vital to ensure their part of the ad machine runs smoothly, especially in these times of reduced ad budgets and greater sensitivity around media quality.
Scale is typically a necessity, and publishers once again face the choice of hiring a technical army or bringing in assistance. Overall, it’s likely outsourced support will offer ongoing help to fix publisher problems as well as valuable benefits. Thanks to their vast buying influence, agencies are frequently able to negotiate enticing rates that minimize cost for the supply-side and allow them to pass on savings that increase their buy-side appeal.
LdJ: That makes a lot of sense. It sounds a lot like what MediaMint’s President, Jason Riback recently shared with us about managing business continuity during the pandemic. But what I didn’t ask him then and I’m asking you now: Don’t publishers understand their own ad tech stacks, revenue needs, and internal peculiarities best?
II: This can be true. Publishers have a better understanding of their own assets. In-house teams can plug into sites and gain a complete picture of how they work and what optimization measures are needed, without the need for external input. They’re also best placed to manage quirks —such as custom widgets or unusual user behavior—and leverage them to secure the deals with relevant affiliates and niche advertisers.
On the other hand, a lot of publishers are focused on editorial activities and development, with limited knowledge of ad tech and revenue stream optimizations. In-house teams have the opportunity to gain a really deep understanding of these websites, but that typically takes years of hard work and dedication. With that in mind, agencies have the advantage of scale; in terms of accumulated insight and analytical scope. Experience in coordinating numerous web properties gives agencies the ability to spot and seize industry trends, in addition to well-honed troubleshooting expertise.
LdJ: So, there’s really no one size fits all, is there?
With pluses and minuses on either side, it’s not easy to make a straight choice. But the good news is in-house operations and agency support are not mutually exclusive. In fact, they can work as an effective ad management partnership if publishers use their individual strengths.
For example, that could entail merging in-house control with agency capability by maintaining a streamlined internal team and outsourcing bigger tasks. Limited team size will keep costs down, but publishers will still have the means to sustain valued direct advertiser relationships and apply insider knowledge to enhance monetization strategy. Meanwhile, agencies can shoulder the principal weight of ad sales and labor-intensive processes, such as technical fixes and OpenRTB optimizations.
Working through these unprecedented times will call for greater flexibility from agency and in-house teams, publishers will likely recognize that the surest way to keep ad ops balanced is combining the best of both worlds.