MediaPost: Unified Auction – Can Publishers Be In Control Without It?
by Michael Nevins , Op-Ed Contributor, September 14, 2018
Publishers are in an elusive chase for control, transparency and flexibility as they fight to reposition themselves against the encroachment of the walled-garden platforms. This pursuit is not made easier when considering the “Franken-tech” stacks with which many publishers are currently saddled.
Who’s in control now?
The past several years have been challenging for publishers. Under constant pressure from the often heavy-handed machinations of Facebook and Google, publishers have learned to be nimble, courageous and creative in pushing back against the dominance of the duopoly.
These two companies capture the lion’s share of ad spend and can be challenging partners for many publishers. A single change in algorithm, policies or a self-serving product change can instantly hurt a publisher’s revenues and create chaos within its legal and ad-ops teams.
Looking at Facebook’s activities over the last year or Google’s murky dance around GDPR reveals the risk publishers take by being too reliant on these closed platforms.
While there are indications that Google and Facebook’s share of ad spend growth is declining, it doesn’t seem to benefit the average publisher. More likely, that growth will go to the emerging “super publishers,” like AT&T (after its AppNexus acquisition), Amazon and Oath. Those invested heavily in technology. Make no mistake: The control lies with the duopoly and the super publishers.
Taking back control
Despite the headwinds caused by these new arrivals, 2018 can be pivotal for publishers that take the next major step in their quest to regain control. But to take advantage, they must dedicate themselves to embracing the opportunity of holistic ad yield optimization.
For the first time, publishers are now poised to push forward by presenting unified auctions — 100% transparent and pure competitions cohering direct sales and deals, RTB and header bidding — to ensure the highest yield for each impression. That’s also good for advertisers; they will secure the best inventory and ensure the highest possible share of their media dollars reach publishers rather than enriching the ad-tech industrial complex.
What’s wrong with the Franken-tech stack?
To answer this question, let’s quickly review how publisher Franken-tech stacks came to life.
Three years ago, holistic yield optimization was only a glint in publishers’ eyes. There was still a stubborn bifurcation between direct sold and programmatic inventory. Direct sold was the focus and programmatic largely functioned on remnant inventory. While buyers shifted more of their spend to programmatic, this bifurcation made control, transparency and flexibility a pipe dream.
The ad server waterfall was a good idea, but not optimal for publishers. Publishers running Google DFP managed their SSPs in a waterfall based on their respective eCPM, but only after direct sold and AdX got the first opportunity. Eventually, algorithms began driving forecasting engines to determine for each impression the best monetization channel.
Certainly a leap forward, but publishers were still not ultimately maximizing their yield potential because of the lack of truly unified auctions.
In the past two years, industry trends started heading towards a fully holistic approach. Publisher adoption of header bidding en masse to take auctions beyond the limited waterfall model played a strong role in the evolution of auction dynamics. With header bidding, publishers were able to create a competition of sorts among all their RTB monetization channels and direct sales for the first time.
Ultimately, however, header bidding was essentially a hack of DFP and the set-up remained totally dependent on DFP ad insertions set up and price allocation logic. It was operationally complex, costly, still opaque, and the reporting was not centralized. This is an ad-tech monster that’s hard to control. Cue the angry torch-bearing mob.
How the publisher stack needs to evolve
In 2018, the programmatic ecosystem is starting to push out new, leading-edge revenue optimization solutions built around the notion of fully holistic publisher sales, offering publishers unified auctions to ensure the highest yield for each impression.
These auctions can be 100% transparent with pure competition between direct sales, header bidding and server side bids from DSP and SSP (RTB), which offers publishers the flexibility to work with any SSP and master all their monetization channels.
These new tools will be immediately actionable. Easy-to-use dashboards and centralized reporting will eliminate the cumbersome need to create multiple line items.
Taking advantage of these tools, publishers have the ability to take back control and push back against the walled gardens and super publishers by creating and tilling private gardens. They will reap premium harvests marked by maximum yield, full control, transparency and deeper insights.
This article was originally published on MediaPost