In the traditional advertising model advertisers and their agencies buy advertising space from media owners and networks. They do this in order to reach an audience they think will be interested in buying their products and services. Simple. Increasingly, however, these relationships are becoming increasingly murky as advertisers morph into media owners and media owners become buyers. One way the latter is taking shape is through the formation of so-called Publisher Trading Desks.
As the advertising and marketing market shifts from trading on media properties as a proxy for audience and toward a more audience-centric trading paradigm, publishers are finding new ways to leverage first party data. By doing so publishers can capitalise on their own audiences, to give them the competitive edge. The premise is simple: publishers can leverage the rich data from their own pre-existing audiences to advertise more effectively, and not just on their own sites, but on third-party sites too.
As such, they can charge a premium for the use of their proprietary data, something to which most advertising companies simply don’t have access. So clients come directly to the publisher and pay the premium to have their product or service advertised across the publisher’s trusted affiliate network.
So how does it work?
A publisher sets up a trading desk using what was traditionaly buy-side technology like MediaMath, DataXu, AppNexus or one of the other Demand Side Platforms (DSPs). This tech allows them to better manage and monetise their audience data. Previously, this would have required advertising middlemen, who would have taken a chunk of the revenue, but the publisher having their own trading desk makes this unnecessary. The actual purchasing of inventory is still done through real-time bidding, but the publisher leverages their proprietary data to target their ads.
This works particularly well for vertical or trade publications. For example, a publisher such as The Guardian, which has its own trading desk, will have rich data on its own readership, segmented into different interest groups. They will be able to look at the data for their travel section or their business section, and can analyse user behaviour to determine which campaigns their readership has been attracted to, which devices they tend to use and other demographic data.
This data then informs the publisher’s advertising on third-party sites—determining the nature of the ads, who to target, and on which of these third-party sites it would be most appropriate to advertise. It can also help to determine which devices to optimise for, such as smartphones and tablets.
But it doesn’t end there. When the publisher buys inventory on these third-party sites, these advertisements then collect their own data through cookies, which in aggregate creates an even richer pool of data.
A better proposition
This audience extension creates a much better advertising proposition overall, by not limiting publishers to the ad space of their own websites, and by allowing them to build on their already rich datasets. It also allows publishers to build mobile advertising even if they have no mobile inventory of their own, or video advertising if they have no video inventory.
For advertisers, there’s an element of brand safety guaranteed, as publishers can bank on their own reputations and those of trusted affiliates. Publishers themselves have the opportunity to work with their internal marketing teams to promote to their own audience beyond their website and across their network, increasing the reach of campaigns and promotional events.
However, a publisher trading desk is not without its challenges. The publisher will first have to prove their value to advertisers and other buyers. Publishers will be required to take on all the usual responsibilities of advertisers, which means that they will need to be savvy with their data, build in-house trading expertise where there is none, and source and train on new platforms where they have limited experience.
In other words, while there are many apparent advantages to publishers setting up their own trading desks in order to regain control of their own advertising and boost their own revenue, publishers will still require a thorough, fully-baked data strategy for it to work effectively.