 |
||||||||||
|
||||||||||
 |
| Are Publishers Pushing Back at Third-party Verification Vendors? |
 |
| According to a series of articles by Digiday, publishers are bristling over the level of influence third-party verification vendors exert over their ability to monetize their inventory. “News publishers are increasingly frustrated with how much of a say verification firms like Integral Ad Science and DoubleVerify have in their programmatic advertising businesses,” Keyleigh Barber wrote recently. It’s not that anyone questions the need to verify placements or for third-party verification vendors to do so on behalf of clients, especially in the open programmatic markets. We all understand that advertisers don’t want to purchase inventory blindly and risk placing ads in horrific environments. Nor do they want to pay for placements on click farm sites. Publishers aren’t philosophically opposed to third-party verification, they just want to see some specific issues that hurt their revenue addressed. For instance, publishers say that all too often the verification partners misclassify their inventory as unsafe when in fact they’re simply covering the news. When that happens, the publisher is unable to monetize that revenue. Luis Romero, SVP and Head of Sales in North America for The Guardian told Digiday that due to misclassification of content, up to 30% of The Guardian’s inventory is demonetized. And sometimes, when a news section is blocked due to a topic being considered brand unsafe, such as stories covering the invasion of Ukraine, that ban is applied to all inventory, including the publisher's cooking or entertainment sections. “I've seen instances where companies blocked articles about the top 10 bread recipes to bake during the pandemic simply because it had the word pandemic in the title, even though the article was about baking bread,” explained Jana Meron, industry veteran and Principle of Lioness Strategies, a consultancy for publishers and advertisers. Publishers also lose money when multiple verification parties are used in transactions. “Advertisers come to each publisher using different verification firms and DSPs, so the brand safety ratings and viewability data from every firm will impact their ability to sell programmatically to some degree,” Barber wrote. What’s more, all that scraping to detect content and sentiment of an article is slowing down page loads, which can affect the user experience and consequently, the publisher’s ability to monetize inventory. According to Digiday, The Guardian is “campaigning to limit the access that verification firms have when it comes to data scraping” and is working with a vendor to ensure that happens. These challenges add to the list of woes troubling publishers that participate in the open markets and contribute to declining revenues, Digiday reports. “In January, the average cost that an advertiser would pay per thousand views of their ads (CPMs) was $1.21 in the open marketplace — the lowest since May 2020, per Operative’s STAQ Benchmarking Data.” |
 |
| For many advertisers, third-party verification is table stakes, and they don't want to purchase any impressions without it. Some have global contracts with companies like DoubleVerify and IAS to ensure all traffic is filtered for IVT and assessed for brand safety for their multinational campaigns. For these advertisers, the logic is simple: only real people convert and go on to become loyal customers. In other words, IVT equates directly to lost business opportunities, and fraud detection and mitigation are essential for growth. Verification is good for the industry, but we must recognize and solve the issues harming publishers. The issue of overly broad keywords in block lists is legitimate and urgently needs to be addressed. The news, indeed the Internet, is funded by advertising. If advertisers and DSPs shy away from news as a matter of course, we run the risk of defunding it. In some cases, broad block lists work against a brand's interests. Many brands opt to celebrate Black History Month and Pride Month and yet maintain keyword block lists that prevent them from placing ads — aka join conversations — around content that is important to those communities. As for scraping contextual data, it’s a complex question. As Meron points out, Google scrapes data from websites every week so that users can find the content they need. But things get dicey beyond such utilitarian purposes. “If it's an ad network scraping the page, then absolutely the publisher should be compensated. If it's a verification company doing the scraping on the insistence of an advertiser, and the publisher is forced to allow tags, is this a cost of doing business? It might be. I don’t know,” she said. She continued: “I think these are great questions to ask ourselves. When is it data leakage vs. taking value away from publishers vs. the cost of doing business? How are advertisers complicit in this, and how can they help resolve these issues? We often think of programmatic as a set-it-and-forget medium. Still these issues continue to prove that people are what make programmatic work across the ecosystem because we uncover these issues and find solutions that work for all parties.” |
|
|
|
| SVB and Signature Bank Debacles Could Impact the Entire Advertising Ecosystem |
 |
| An already stressed economic environment surrounds the advertising ecosystem, as many publishers have had to resort to layoffs just to stay afloat. And now, with the collapse of Silicon Valley Bank and Signature Bank, the consensus is that things might only get worse for publishers as marketers are likely to spend even less in the months ahead. Last week, at AdMonsters' Publisher Forum Miami, a publisher mentioned to Content Director Lynne d Johnson that this Silicon Valley Bank mess could mean that some publishers might be unable to make payroll. Catherine Perloff at ADWEEK said these bank failures "have destabilized the publishers, ad-tech firms, and advertisers intertwined with the tech-focused banks." In some cases, SSPs have stepped up to the plate and made payments earlier than contractually obligated, and other unaffected companies have offered relief payments to publishers. For the most part, we're primarily seeing startups impacted by the fallout, and some, like Acuity Ads, have taken action and governmental remedies to stabilize their businesses. But even media companies like Roku, Roblox, and BuzzFeed, which also had massive amounts of cash in SVB, suffered from the initial shock. Fortunately, the U.S. government's rapid action to guarantee deposits added a buffer, lessening a massive blowout. |
|
| As a result of these recent banking fiascos, expect marketers to scrutinize partner contracts and tighten their belts even more. "Marketing and advertising agencies should consider several precautionary measures moving forward. Agencies will need to revisit contracts and clauses with vendors, especially startups. This is also causing agencies to revisit how they conduct due diligence with vendors and revisit any auto-renewal clauses, ensuring that contracts and liability clauses have specific end dates. Agencies must ensure that sequential liability is in place with all vendors," Ashwini Karandikar, EVP of Media, Tech, and Data, 4A's, told Campaign. Businesses have learned not to put all their eggs in one basket. "There'll be greater diversification among many banks for each company," says Jeremy Bloom, an ad tech expert, advisor, and investor currently developing OhHello, a networking community for the ad tech industry. "Most smaller ad tech companies only bank with Mercury, First Republic, and previously SVB. You better believe media and advertising companies will diversify where they keep their money. As a startup tech entrepreneur, I'll be using multiple banks." Diversification is the best advice for everyone going forward, especially considering that a recent study revealed that nearly 190 banks could face a similar fate as SVB if only half of their depositors decided to withdraw their funds. |
|
|
| Privacy-first and Automation Drive Ad Tech's Future |
| Mergers and acquisitions in ad tech are nearly as old as the industry itself. Usually, M&A activity clearly indicates where the industry is heading overall. And while M&As slowed in 2022, LUMA Partners expects M&A activity to reach pre-Pandemic levels going in 2023, especially in 2024. "Rational valuations should help spur more M&A this year, as businesses are valued based on their sustainability and profit margins rather than purely on growth," Conor McKenna, a director at LUMA Partners, told AdExchanger. Trending hot topics like data privacy, retail media, podcasting, and CTV will surely boost much of that activity. As state privacy legislation continues to accelerate and federal regulation nears, and with the third-party tracking cookie fading away, data and privacy continue to play a leading role in the future of ad tech. "The need to develop full-stack, omnichannel solutions for marketers and publishers will drive additional industry evolution throughout 2023, and this activity is going to occur with an eye toward future-proofing solutions so that companies can remain relevant in a privacy-first advertising environment," writes Sameer Sondhi is co-CEO at Verve Group. We expect to see more ad tech M&A activity around identity, first-party, and end-to-end solutions for buyers and sellers. Also, with rising interest in AI in the industry, automation is a growing area where ad tech M&As focus. Given the need to fill gaps caused by limited resources in people power or technology, "Balancing AI capabilities with real human talent, and ensuring both are being equipped to play to their strengths, poses a conundrum in our industry right now, and it's a challenge that must be tackled deliberately," says Sondhi. As we learned at AdMonsters PubForum Miami last week, publishers are coming to expect more from vendors, especially as budgets are reduced. Many publishers want more transparency from SSPs, more automation, and for them to act more like extensions of their sales teams. |
|
 |
|||||||
|
|||||||
 |
|||||||
|
|||||||
 |
|||||||
|
|
|
