The debate around display advertising is currently rather polarised.
As some eschew standard display and forge ahead selling super-expensive native advertising, others continue at scale through programmatic, hoping the slide in CPM will cease.
But can publishers realistically make it to a middle ground, one of powerful display advertising based on greater relevance and intent?
Econsultancy’s new report, Digital Publishing: Increasing Advertiser Value Through Data and Identity, in association with Signal, looks at this challenge (free download available here).
40% see no revenue growth, with low CPM a function of volume
The new report includes data from a survey of 127 senior marketers with direct knowledge of ad ops at US companies with at least $50m revenue.
As you can see from the chart below, 40% of respondents reported stagnant or declining display ad revenue.
This is largely a problem of scale, with inventory of ads now oversized, even once viewability and ad fraud is accounted for.
Combined with the efficiency of programmatic buying, this scale erodes margins for all but the largest publishers.
Ad blockers have sounded a wake-up call
Ad blockers have alerted publishers to the elephant in the room.
Consumers desire a better experience, especially on mobile devices. That desire necessitates a move away from scale (overwhelming ad presence) to power (by adding consumer value).
Ads are chiefly noticed when they provide some service, by aligning with consumer interests, relating to who they are and what they need.
Mobile has unique challenges
Mobile has created unique challenges for publishers:
- Recognizing individuals across devices can be difficult but is needed to optimize experience and to analyze engagement.
- Limited real estate means publishers can’t target scale, though relevance is high.
- Dynamic content is a challenge.
So, how can publishers add value?
The chart below shows the methods by which publishers feel they can add a premium to CPM.
76% expect the identification of individuals across devices to add a good or high premium. This will perhaps be an expected industry standard in the medium-term and one which will undoubtedly increase CPM.
Perhaps the most immediate target for improvement is through the targeting of registered subscribers. First party data, collected through subscriber interactions, is often under-utilized.
Publishers have an imperative to add information to subscriber records over time, in order to increase context for advertisers, with dynamic delivery necessary for publishers to then take full advantage.
Harnessing advertiser data, as well as sharing data between publishers, is another hallmark of successful publishers.
Using advertiser data helps to establish intent by giving external context to consumer behavior, and is seen as adding some premium to CPM by 92% of respondents.
Using live intent data (by defining behaviour triggers across consumer channels) is another more sophisticated method of targeting, used by nearly 60% of high growth publishers.
There’s no doubt these varied forms of targeting will play a role in moving away from a display advertising model of scale, to one that allows smaller publishers to provide high value advertising.
For much more from the report, download it now.