Written by Simon Birkenhead, CEO of Axonix
Publishers are getting screwed. The exponential growth in mobile usage has created an explosion of ad volumes that has pushed down prices and revenues. This can’t continue. If they want to survive, publishers need to find a way to pull the power pendulum back from advertisers.
In the early days of the ad tech industry (around five to ten years ago), innovation was driven by the supply-side of the marketing value chain – i.e. the publishers. The first ad tech platforms were ad servers, from the likes of DoubleClick, which helped publishers to optimise their ad inventory. Their internal media sales teams then brought in demand and set the prices.
However, with the shift to programmatic and real-time buying (RTB) over the last five years, this power pendulum has firmly swung across to the demand-side.
First we had ad exchanges, which allowed advertisers to buy inventory through real-time auctions. Now they could buy only the ads they really wanted, on an impression-by-impression basis. This revealed that the true market price of some supposedly ‘premium’ ad inventory was actually much lower than publishers had been charging – whipping the market power away from publishers.
Then demand-side platforms (DSPs) were created, which enabled advertisers to run campaigns across multiple exchanges at the same time. Recently, we’ve even started to see ‘Super DSPs’ emerge, which allow agencies to optimise campaigns across multiple DSPs. With valuable consumer data being shared across all these technologies, advertisers can now find their audiences wherever they are on the internet, on any device. And that might not be on the traditional ‘premium’ publisher sites of yesteryear.
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