Bloomberg Shuts Down Open-Market Third-Party Programmatic Ads

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October 17, 2022
No More Open-market Third-Party Programmatic Ads for Bloomberg
TikTok is on Amazon's Heels
Apple the Ad Tech Power Player
Bloomberg Media is Shutting Down Open-market Third-party Programmatic Ads to Improve UX
According to Bloomberg Media CEO Scott Havens, the publisher will end its open-market third-party programmatic display advertising on its website and mobile app beginning January 1, 2023.

Havens asserts that the decision attempts to improve the publisher's user experience. Since companies cannot always choose which ads appear on the website using a third-party programmatic system, the publisher believes that moving away from this practice is a good brand suitability move, keeping ads away that do not align with the brand.

Open market ads only represent five percent of the company's inventory, so there should not be a major hit to revenue. However, Haven knows that removing these ads from Bloomberg's site will result in short-term revenue loss. On the bright side, the company projects long-term revenue gains in readership.

"I expect us to make more money from this decision over the long term than we will lose," Havens said. "If you make a good product and people enjoy their experience, they are more likely to remain customers. Media businesses have not cared as much about that as they should."
Why This Matters
The industry has gone through a significant shift, and this announcement is only further proof of that sentiment. While revenue is essential to publishers, many more brands are considering the implications of creating a great user experience for their consumers. While hoarding ads on your website could help you gain some revenue in the short term, having a dedicated consumer base that interacts with your website and products will be better for your business in the long term. Bloomberg Media's recent decision is a testament to that sentiment.

Even some ad tech industry experts reacted positively to Bloomberg Media's decision. Self-proclaimed ad tech socialite, Matt Barash, insisted that this is a move towards quality instead of quantity.

"Not every ad slot needs to be filled with a monetizable ad," says Barash. "There is a shift to quality happening right before our eyes."

It is always important to consider your company's long-term revenue goals, but if you are also not considering the needs of your consumer base, then you are dropping the ball. Bloomberg's understanding of this idea is why they decided to do away with their open market third-party display advertising.

"The calculus is changing," said Troy Young, the former global president of Hearst Magazines. "Is the yield worth the negative user experience? Suppose programmatic is a small percentage of inventory. In that case, yield is going the wrong way, and you have a new means of monetization in reader revenue. More publishers are going to reach the same conclusion."
Will TikTok Become the Next Amazon?
TikTok has the right idea.

They are fully aware of their capabilities and the power of their platform. Word on the street is that they have job openings posted as they are looking to build an "international e-commerce fulfillment system." This will include international warehousing, custom clearings, and supply chain systems that support domestic e-commerce in the U.S. and overseas. Eventually, the system will perform parcel consolidation, transporting goods, and free returns.

These product fulfillment centers they are looking to implement all over the U.S. will directly challenge Amazon. With this TikTok shop — we will see in the U.S. very soon — consumers will be able to buy items that TikTokers promote in their videos. This makes a lot of sense for the social media platform.
Why This Matters
TikTok is committed to figuring this e-commerce thing out, which will be a huge revenue step for them. If you thought TikTok was in control before, having its own supply chain is going to take them to the next level. Their ad business is booming right now.

"By providing warehousing, delivery, and customer service returns, our mission is to help sellers improve their operational capability and efficiency, provide buyers a satisfying shopping experience and ensure fast and sustainable growth of TikTok Shop," the company wrote in one job listing.

And another thing, if there is one thing these internet companies have in common, they are all constantly influencing one another, and at this point, TikTok thinks if Amazon can do it so can we. According to The Information, "to defend your service, you need to control the platforms that run it." So this is TikTok's way of dominating their narrative.
Apple's DSP Might Finally Cement Them as an Ad Tech Power Player
Apple just announced that they are seeking to build their Demand-side Platform (DSP). If done, this could bolster the tech company as one of the leaders in the ad tech space.

The company made waves a year ago when it implemented its App Tracking Transparency (ATT), allowing consumers to choose whether or not an app can track them. It caused significant backlash from advertisers and developers that depend on this data. Still, it positioned Apple as a figure in the ad tech space in tune with the modern rhetoric of consumer ethics. It allowed Apple to stand out against its competitors in the ecosystem.

In building the DSP, Apple will sharpen its ad targeting capabilities committed to the brand's privacy-focused model and create a huge market to offer advertisers. Their current policies suggest that their methods will be much less invasive than other major players such as Meta and Google. Their system uses contextual data–device information, location, consumer data–and segments them into groups of 5,000 with specifically targeted ads in mind.

While the DSP doesn't exist just yet, many have made this assumption because of a job listing on Apple's website for an ads-demand platform engineering director. Industry experts believe that it won't be hard for Apple to launch a DSP because of its resources and DSPs' saturation.

"There's been so much talent cultivated through other companies out there, you can just list them off: Trade Desk, Criteo, PubMatic, Magnite, LiveRamp, and so on and so forth," said Tom Triscari, Lemonade Project analyst. "Apple can go out and pay and get the best of the best if they want to."
Why This Matters
Apple is fully immersed in the ad tech space. Specifically in their ongoing feud with Meta. Only a month ago, Apple announced two job listings that seemed targeted towards taking ad revenue away from Meta. While Apple's ATT was a step forward in the rights consumers have over their data, the system cost Meta $10 billion in ad revenue. 

In addition, it has been reported that Apple's potential new DSP will help the tech company push its ad products into TV advertising. It has become public that Apple is meeting with TV executives to help monetize their video content with an ad play, and their DSP could be a key to its success. A holding company executive confirmed that Apple would use a DSP for TV inventory. This further cements the fact that building a DSP will not only put them ahead of their competitors but will be good for diversifying their revenue.

According to the executive, Apple has so much inventory through their maps, email, and other applications that the "DSP would be only to decide on their owned and operated TV content."
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Tests of any cookie alternatives need to be measured against these goals which advertisers pay for.
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