Over the past decade, programmatic advertising has revolutionized the industry through automation and digitization of ad sales. Programmatic ad technologies have improved targeting, sped up transactions, and eliminated manually intensive tasks like RFPs, price negotiations, and insertion orders. But despite all the ways that programmatic monetization partners have simplified these operations for independent publishers, they have also created a lot of challenges along the way.
To aid independent publishers in choosing a partner wisely, here are some common challenges encountered while working with programmatic solution providers.
1. Loss of Transparency: Intermediaries and Hidden Costs
Without transparency, the programmatic supply chain often develops into a complex setup with many intermediaries, resulting in additional fees and markups that take money off the table from publishers and advertisers. Generally speaking, the higher the number of intermediaries, the lower the earnings from a media sale.
This problem has been flagged by AdAge, which stated that sometimes 98% of an advertiser’s budget goes to vendors. There is no consensus on how much money goes towards these fees. Each platform charges different prices. Without knowing how much each party gets paid, publishers may not know the total value of their ad inventory.
To make matters worse, many programmatic partners don’t provide details about what they charge direct advertisers and how much they pay publishers per impression or click. They also do not share details about how much they earn as part of their margin compared to what they share with publishers (often referred to as ‘revenue share’).
This problem has grown in recent years as programmatic intermediaries have increased dramatically. Today, publishers are employing more and more monetization partners to monetize their ad inventories. The result is a severe lack of transparency and a wide gap between expected and realized revenue.
2. Impact of Ads on the User Experience and SEO
The quality of content on a website is an essential factor in how search engines rank it. But so is the relevance of the ads that appear alongside it. Ads that aren’t relevant to someone reading are distracting and can impact how well content ranks in search results.
It can be challenging for independent publishers to know if a programmatic monetization partner is balancing user experience and ad revenue optimally. After all, they are the experts, and publishers have limited time to review how every ad placement is managed. But what if they are not optimizing ads as they should or if they are not complying with AdSense or Ad Exchange policies for serving ads?
As programmatic advertising enables bidding for an increasing number of ad spaces in real-time with automated software, the inability of human eyes to review or approve each ad before it appears can create opportunities for abuse. If ads have not been optimized well, this will impact revenue. For example, suppose a partner utilizes intrusive ad formats such as pop-ups, full-screen interstitials, or auto-play videos without any control over the audio; this would provide a poor user experience and result in a drop in traffic and engagement.
Sometimes it is not only the formats themselves but the ads that appear within them. If a partner cannot provide access to a network of high-quality demand partners, they may not be able to provide good-quality ads consistently.
3. Getting Essential Insights, Personalized Support, and Guidance
Digital publishers focused on content creation and earning revenue from programmatic advertising need to manage their inventory, optimize revenue streams, and ensure their partners provide ad optimization tactics. Their partners must provide insights into their monetization performance to make effective decisions.
It’s easy for personalization and benchmark analysis to fall by the wayside when there are so many other responsibilities to take care of daily. The challenge is compounded by the fact that many publishers have partners who do not provide growth insights, guidance, and support. Furthermore, the discrepancies between what publishers think they should be able to do with the data they receive from their partners and what they can do create an additional challenge for them.
Many publishers struggle to generate enough revenue with programmatic monetization partners who don’t offer access to features such as a transparent reporting structure and an analytics dashboard that have become essential to managing digital ad revenue.
4. Inflexible Monetization Contracts
Monetization contracts and policies can help set expectations and boundaries with a monetization partner, but they must be clearly defined and enforceable. If not, the publisher team will feel frustrated by the process and may even give up on the partner entirely.
Rigid and long notice periods can also make it hard to switch partners when the time is right. Some monetization partners ask publishers to sign an exclusive contract with them. Publishers then lose the flexibility of choosing different solutions offered by other vendors.
5. Access to Modern Advertising Technologies
While there are many reasons why publishers are struggling with monetizing their content, one of the biggest obstacles is a lack of access to modern advertising technologies. Here’s what we mean: publishers can’t consistently implement the latest and better features because they’re too busy trying to keep up with the demands of today’s web and focus on their business.
For example, they often don’t have the resources to keep up with advanced technologies like video header bidding and AMP RTC (Real-Time Configuration). And if they do have those resources, they often decide not to implement them because they lack the infrastructure and resources needed to support them for a long-time.
Here are a few more challenges independent publishers face when they don’t have access to modern advertising technologies:
- No data on their audience: Publishers are often not able to track their readers’ behavior or interests. This makes it difficult for them to target their ads and make informed decisions about what types of ads to display.
- Limited choices for advertisers: Publishers can’t offer as many options as others, so advertisers may be unable to find their inventory.
- Uncertainty about ad formats: Since they don’t have access to the same tools as large publishers, they may not be able to tell if certain ads will work well for your site or not.
The current ad market is dynamic and constantly evolving. To make the most of programmatic monetization efforts, publishers must have a partner that provides cutting-edge advertising technologies. The best partners will be able to help publishers scale and optimize their ad revenue, which is critical for business goals and help them take advantage of new opportunities as they arise.
Facing the challenges mentioned above with a monetization partner creates a lack of confidence and trust in their services. This could be further exacerbated if a partnership doesn’t generate the revenue that was expected or projected.
As the digital publishing industry continues to mature, many new challenges will arise, and supportive monetization can make all the difference in sustaining such a business. Our next post in this series explores why publishers face low CPMs despite audiences with high intent and engagement.
If you’d like to learn more about how Automatad can help you address your monetization challenges, please connect with us here.