Building an ad tech strategy: 3 elements publishers must master
Contributor, April 28, 2022
- Publishers should explore different inventory allocation opportunities to determine which mix best aligns with their business model.
- Yield management strategies need to be employed to maximize revenues.
- Publishers are responsible for complying with policies and data protection regulations.
Building an ad-tech strategy is perhaps the most challenging aspect of being a publisher. A simple Google search will reveal thousands of ad tech companies, each claiming to offer the best monetization methods and strategies. It’s easy for publishers to quickly become overwhelmed and get lost in a sea of advice and recommendations.
The result is publishers with overly complicated or underperforming tech stacks, misconfigurations, policy compliance issues, and many other problems, all of which amount to lost revenues and other consequences.
Creating the right ad-tech strategy is a lot like cooking. Just as you balance flavors to suit your tastebuds, you need to find the right ad-tech mix to achieve your business goals.
In this post, we’ll cover the ingredients you need to make your ad-tech stack sizzle. With the right in-house expertise, you can follow it and create a workable, revenue-generating machine.
1. Supply allocation
When it comes to allocating inventory, publishers have several options. How inventory is divided among demand sources can significantly impact revenue, so publishers must do this with great care. Since publishers have different business models and strategies, there’s no one-size-fits-all approach. Publishers should evaluate various opportunities and determine which types of deals are most beneficial.
Let’s look at some of the most common types of deals.
Private marketplace deals (PMP) are invite-only auctions in which a selected group of advertisers get bidding priorities before inventory is made available to all other advertisers. Publishers determine minimum costs, and the advertiser with the highest offer wins.
Direct deals are struck between sellers and buyers without ad exchanges or intermediaries. CPMs are pre-negotiated and higher than open market rates because deals are for premium inventory.
Programmatic guaranteed and preferred deals
With preferred deals, publishers sell premium inventory to a preselected group of advertisers at fixed prices. Advertisers bid in real-time, and the winner is determined by the highest bid or the advertiser that offers the pre-negotiated price. Guaranteed deals are similar but come with a fixed number of impressions.
Remnant inventories are suitable for open auctions as real-time bidding is open to many advertisers. Demand will vary, but publishers can still get an acceptable price for unsold ad inventory.
2. Yield management
Yield management is a variable pricing strategy that enables publishers to sell inventory for the best price. Publishers usually alter prices based on demand, demand sources, seasonality, or user behavior. Yield management allows publishers to maximize fill rates and earn the highest CPMs possible.
Here are a few ways publishers optimize their yield management strategies.
Publishers need to think carefully about the demand partners they work with, adding them to tech stacks to test their value. Some supply-side platforms (SSPs) and demand-side platforms (DSPs) have commitments or relationships with agencies to provide certain opportunities for buyers. Other demand partners might specialize in specific geo-locations or verticals, which can benefit publishers.
Header bidding, which occurs outside of ad server auctions, gives advertisers a ‘first look’ at a publisher’s inventory, allowing them to choose high-priority impressions. Impressions are auctioned to all partners simultaneously, and the highest offered price determines the winner.
Varied ad formats
Some ad formats are more valuable to advertisers than others. To maximize profits, publishers should offer a variety of traditional and non-traditional ad formats, including video, application, interstitial, native, and anchor or sticky ads. Advertisers will pay a premium for ads that provide a better return on investment (ROI), resulting in more revenue for the publisher.
Every yield management strategy should include an A/B testing component. Publishers can test new technology, ad formats, header bidding solutions, and more against what they already use to determine which mix provides the best yields.
3. Stay on top of everything!
The ad tech industry is no longer the wild west it once was. Today, organizations such as the IAB have been working to clean up the ad supply chain and restore confidence for both publishers and advertisers. Publishers that follow the rules, implement privacy policies, cookie compliance, and data protection measures can capture the revenue that would otherwise be headed toward non-compliant publishers.
Traffic monitoring (trust & safety)
To instill a sense of trust and safety for advertisers, publishers need to monitor their traffic and understand their traffic sources. Publishers that don’t do this consistently will undoubtedly suffer from invalid traffic (IVT). Those with high IVT rates will see revenues and reputation diminish, and persistent IVT can cause publishers to lose access to Google products and other third-party partners.
The ad tech industry and supply chain have suffered due to poor business practices and malicious actors. Nowadays, reputable programmatic platforms require publishers to meet standard compliance terms. For example, many platforms, including Google, won’t monetize publisher content that promotes illegal activity, including harmful or derogatory content, sexually explicit content, and much more.
Data protection regulations vary by region and country. They include laws such as the EU’s GDPR, California’s CCPA, and Brazil’s LGPD. It is a publisher’s responsibility to make sure they comply with local laws and properly obtain user consent to collect data.
Should you whip up your own ad tech stack?
As we mentioned earlier, it depends. Does your team have the right ingredients – the required knowledge, experience, and development skills?
While we encourage you to explore your options, we also know that sometimes publishers can be the most successful by focusing on the business activities they do best and allowing an expert like Total Media Solutions to do what it does best – provide publisher revenue management services.
If you don’t want to waste more time or miss out on monetization opportunities, reach out to us. We’ll get you cooking in no time!