Dmexco 2018: The digital publishing debate
Publishers face threats on an almost unprecedented level, but emerging tech, collaborative projects and new systems of working suggest the future is bright, writes David Pidgeon
The backdrop to Mediatel’s debate on the future of digital publishing looked rather bleak: over the last 12 months there have been attacks on newsbrands and journalists, continued business threats from the likes of Facebook and Google, a crisis of confidence in digital advertising more broadly from the client side, and misunderstandings about the value of different online environments.
Chuck in some existential threats in the media agency world, data legislation and a programmatic supply chain full of leaks, and you’d be forgiven for being a pessimist.
Yet, that’s not how publishers feel about the long term. Yes, they face serious challenges – but for the first time in a long time, there is a level of confidence that finds its roots in technology, collaboration and market maturity.
“We're now at a really interesting inflexion point,” says Chris Taylor, chief information officer, Telegraph Media Group.
“The digital advertising space, as we've known it for a number of years, is at the cusp of really quite considerable disruption.”
Taylor says despite taking some time to fully realise its power, publishers are now embracing the idea of an “identified relationship” with consumers.
Whether that's pure-play subscription with titles such as The Times, or a registration lead strategy used as a bridge to e-commerce and subscription bundles, such as The Telegraph’s own model, it is all about user data.
“Add to that the trends around brand safety and the legislation coming out of Europe around the ability to use data - you put all of that together and what you end up with is the beginning of the end of the anonymous scale advertising business - and the rise of the need for that very identified, smaller, more carefully crafted, higher quality audience sell. For publishers, there's a lot of momentum in that direction.”
However, for this to really work, there needs to be a change in the media agency world, says Taylor.
“There needs to be a shift in the approach to the perception of value in those kinds of audiences and the approach to buying them. Because you can only sell something to somebody who is aware and a willing buyer. So there's quite a lot that has to change on both sides of the equation. I think we're right at the beginning of that now and I'm pretty optimistic about the outlook.”
However, Damon Reeve, the newly appointed CEO of The Ozone Project - which pools the digital ad sales of four major news brands - thinks that in the short term, publishers still face major hurdles in using data to achieve those aims.
“The challenge right now is the right to use and the ability to create value from data,” he says. “GDPR - and the e-privacy regulation that's going to be coming in after it - has had a significant impact on the digital ad market. There are lots of bumps to try and iron out and I think in the long term they will. But in the short term, it's going to create a lot of volatility.”
For starters, says Reeve, current regulation plays to two of the biggest threats to publishers today: Google and Facebook.
“It will play to those that have logged-in and known user relationships. And in the short term I think it's going to be a challenge before it gets better.”
Reeve says the ‘walled gardens’ of platforms like Facebook – where data can essentially be sequenced and passed all the way through – is what makes them so powerful. However, in the ‘open world’ where publishers operate, there is a degree of friction and fragmentation.
“That doesn't mean to say it won't sort itself out, and there's a lot of strategy and initiatives around reconciling a lot of those problems, but the friction is a big problem.”
One of the longer term solutions, therefore, is Reeve's Ozone Project, which has been developed in response to industry-wide concerns across the digital ad market around brand safety, data governance, lack of transparency in the supply chain and ad fraud. Set to launch later this year, it has already signed up News UK, Reach, The Telegraph Media Group and The Guardian News & Media.
By pooling the ad sales of multiple publishers, media buyers can experience a streamlined service that matches what Facebook can offer – including the social media platform’s scale in the UK.
“The difference is, we can provide the transparency and trusted environments,” Reeve says.
The Ozone Project is currently in a closed beta with campaign trials beginning in October. If all goes to plan, the platform will be up and running by the end of the year with a longer-term goal to attract magazine publishers.
An additional challenge along the path to reducing friction, says Ben Walmsley, digital commercial director, News UK, is to also find a longer-term solution to measurement in the open web.
“The inability to measure across all of those different [online] environments is a challenge,” he says. "There needs to be a time where it works across multiple platforms so advertisers feel confident."
However, Walmsley says he believes there is now enough maturity in the market to address these issues.
“We will see it over the next two to three years. It's not going to be as easy...but it feels like now we're at a point where these things are starting to come to fruition."
New technologies and a maturing of the digital publishing space are helping to open up fresh opportunities. What prospects did the panel think were most exciting?
"For us, the interesting thing about tech is it's no longer just about advertising," says Taylor.
For the Telegraph, the idea of using third-party tech to deliver the highest bidder's ad into an available page slot is not always going to be the best commercial use of the publisher’s canvas.
"As publishing has evolved we became much more interested in digital subscriptions and e-commerce, particularly in the travel and financial markets," says Taylor. "So it's no longer about which ad to place - it's about which experience to put in front of the reader."
In some instances that might mean selling a placement for a product, or it might be better to place a piece of content that will act as a ramp towards a lucrative e-commerce offering – something of much higher, longer-term value to the publisher.
“We need to be able to understand that broader context because if you're a really hot prospect for a subscription, we might only serve you messages around subscriptions,” says Taylor. “We might not even use advertising units to do it, and I think that has made everything much more complicated from a tech perspective."
Elsewhere, publishers are mulling the idea of micro-payments for content.
"I'm really interested in this as the way forward,” says Simon Halstead, head of open demand EMEA, Oath Ad Platforms, publisher of the Huffington Post and TechCrunch.
“Not just subscription, but article-specific payment, and I think that's a really interesting opportunity for the future."
The problem is scaling the available tech to make micro-payments work, says Halstead. However, with popular systems such as Amazon Pay, Google Wallet and PayPal operating globally, there are signs that the practicality of micro-payments will become easier.
“I have a personal and long held belief that there is a significant opportunity here, but it needs aggregation. I don’t think there needs to be a universal wallet, but a number of opted wallets – and there are new tech companies in this space trying to provide their services."
However, Taylor argues that it’s a tricky subject that splits opinion. “There are some practicalities around the friction associated with it. The big challenge is if you believe in the idea of subscriptions as a powerful form of recurring revenue - where the strength of the bundle has something to attract people, retain them, and also increase the value to the consumer - there is possibly a role for micro-payments as a way of trial and experience.”
Yet, Taylor says by only selling a single article users do not get to experience the broader offering, so for now he is inclined to promote very short-term access at low entry points rather than “disaggregating” the subscription bundle.
Meanwhile, others, including News UK’s Walmsley and Ezoic’s chief customer officer, John Cole, suggest data itself should be viewed as a form of currency.
“How much you're willing to share is another option for future which hasn't been figured out yet,” says Walmsley.
“It's very difficult to pay for a single article without the mass adoption of digital wallet system, but everybody's got some form of data that they can share.”
Walmsley says The Times has discussed this option, but has yet to take it forward.
“But maybe if you tell us something about yourself you get an article, but tell us a bit more and you can get one or two more articles.”
The value here could lead to better tracking and advertising opportunities, he says, but it’s not a near term solution for boosting revenue streams.
Lurking behind all these ideas, there is a broader implication to be mindful of, says Cole: “One of the reasons that publishers are developing these new revenue streams is because they’re not getting their rightful money from the advertising chain because so much of it is being siphoned off along the way. They haven't been getting the amount of revenue from advertising that is their rightful due to pay for that quality content. And that, in a nutshell, has been the issue for several years now.
“However, the internet is free and I don't particularly want to see us split it into two tiers of people - those who can afford to pay for it and those who can't or won't pay for it, and having two quality layers."
Cole says, in light of the rise of fake news, the public is becoming much more discerning about their sources of information, so it’s important that quality and trust-worthy journalism isn’t closed off entirely – and that means siphoning ad revenue back towards it.
In the meantime, Cole points to technologies such as machine learning to help publishers improve the user experience and make better use of page advertising to boost those ad revenues.
"Machine learning technology is going to be able to help establish value for publishers... they should be able to use it almost to defend themselves."
While advertisers are finding ever more powerful ways to adapt in the digital era, publishers are still holding fast to rules from older forms of publishing, Cole says. This means fixing everything from the content and layouts, to the ad combinations and user experience.
"Machine learning personalisation offers publishers the chance to gather all their ‘average’ user data and turn it into something truly unique - for each visitor."
>>>Cleaning up the programmatic supply chain
Several years ago, after Mediatel revealed the Guardian was losing up to 70 pence in every pound to adtech middlemen – meaning only 30% of an advertiser’s money reached the working media – there was uproar. Does the panel feel things have improved?
“Marginally,” says News UK’s Walmsley. “2017 was probably the peak of how bad it had got. But then it felt like the industry started to work together and we thought, 'we just can't allow this to continue'. To that end, initiatives like ads.txt, then the rise of supply side optimisations trying to cut out some of the noise in the middle and find the best and most effective route to the impression, helped.”
However, Nick Manning, senior vice president, MediaLink UK, says that as 2019 approaches still not enough money reaches publishers.
“The advertiser isn't getting the bang for the buck that they need, and the publishers aren't getting the money they need to fund quality content. That problem still exists. It hasn't gone away.”
Manning, the co-founder of Manning Gottlieb OMD and a previous chief strategy officer at Ebiquity, says that advertisers are now telling their agencies that they want to know where the leakage is in the programmatic piping between them and the publisher and putting a cap on what they are buying. “Then, at the very least, they can be clear on the ceiling of what it’s going to cost – otherwise it’s just open season.”
Manning says he feels sorry for the publisher community, as they don’t get the returns they should from advertiser spend because of what happens in the middle. “Most of it is still un-transparent to the advertiser and the publisher,” he says.
Yet for Oath’s Halstead, despite admitting there are problems, there is a little more sympathy with the vendors.
“The trouble with all of these things is people often talk about adtech as a tax,” he says. “But they are an optional service. You don't have to buy programmatically, and whenever you add a vendor into a process, you'll incur a cost because they are all services."
Halstead says that, by default, is a challenge for a publisher because money is coming out before it reaches them.
“But I do think [vendors] need to ask the question: ‘what is the value added from this service?’ Rather than just, ‘I can deploy this so I will’. And I think that's a big challenge.”
Walmsley agrees with this sentiment. “We shouldn't say that adtech is the root of all evil, but daisy chaining impressions and reselling without knowing where things are going is not a service. It’s exploitative.”
The supply chain problem is also another area in which The Ozone Project has been drafted in to help, principally to address an imbalance in decision making.
“When we began thinking about Ozone we said the primary stakeholders were the consumer, the publisher and the brand, but they were not the primary decision makers in the market," says Reeve.
"Instead, there were companies in the middle that were making primary decisions around the direction the industry was going, and the core stakeholders weren't actually a part of that discussion.”
Reeve, and his publisher stakeholders, hope Ozone will begin to change that narrative.
“I think we’re already seeing that change,” he says. “There’s much more collaboration right across the industry.”
Meanwhile, Taylor says there is a positive side to this issue because from a publisher's perspective, these shared concerns can ultimately lead to a rise in the importance of context in advertising, which is a publisher-owned element of the process.
“You may well see that come back more significantly,” he says. “I think we are in choppy waters, but I'm pretty optimistic that, for the publishers, we're probably through the worst of it.”
>>>The open market’s ‘devastating impact’
Programmatic might not be the root of all evil, but there is a place were it is certainly a dirty word: the long-tail of the open market.
The internet is, essentially, an infinite canvas with no barrier to entry for anyone who wishes to begin publishing. This is great in many ways, except it means established publishers - looking to maintain ad revenues in the wake of reduced print operations – are scrapping it out with a vast online wild west.
“The lack of barriers to entry for people to create websites and content has expanded the long-tail significantly,” says Halstead.
“There’s been a change in consumption and some of the challenges now even mean getting attention for traditional news publishers.”
Yet, worse than attention is what the long-tail has done to the market economics.
The Telegraph’s Taylor says what now exists is an infinite supply in digital, and normal market economics means the price “is just falling like mad”.
“The open marketplace is exactly where the issue is and I think in some respect it's giving programmatic in general a bad name.”
Taylor adds that the programmatic open exchange ecosystem has strangled some businesses, particularly regional UK publishers. “Some have been annihilated, largely, as a consequence of this,” he says.
Manning also says the open networks are the source of so much of the difficulties in the industry. “It’s where the lowest levels of viewability is to be found, it's where the greatest fraud is to be found, it's where domain spoofing is to be found.
“It’s created a serious imbalance in terms of where the money ends up...and is one of the reasons so much online advertising is probably ineffective.”
Meanwhile, Walmsley says the open market is having a “devastating impact” on publishers, particularly from a brand safety perspective.
“If [an advertiser is] going to buy in an open market, where typically there are half a million sites that might appear on a media plan, you need to make sure that you're using pretty robust brand safety tools. But they’re not robust, they're quite blunt and we see huge numbers of impressions being wiped out by these tools, with terms like ‘is’ being blocked because it might reference IS.”
The panel agreed that there is a nervousness in the advertising community over brand safety – which is understandable – but again, the context of the premium publisher environment needs to be better understood.
On the agency side, Laricea Roman-Halliday, head of digital media, The Specialist Works, says the challenge now is to educate clients who are pushing for cost-effect volume, but simultaneously want their ads to be viewable and in a brand safe environment.
“It's a huge challenge for us when they're pushing for the volume, but we have to have performance and brand safety too,” she says. “[Advertisers] often push back and say it’s just too expensive. But for me the Holy Grail is to tick all three boxes.”
Yet Manning argues perhaps that’s a misstep. “I know it's difficult for agencies because clients are pushing them to do that, but if you're advertising on a vast long-tail of sites, you might be getting a volume of impressions, but that's not telling you very much because you don't know what the quality of those impressions is like.”
Better, perhaps, to ditch the long-tail altogether?
“If you were a performance-based advertiser, there's an argument for someone saying, ‘You know, if I just put a lot of impressions out there, as long as it converts at a reasonable level, I get my CPAs,’ then they're not so worried about context. But where brand really matters, they should absolutely be having this conversation about context and the quality of the environment, and the trustworthiness of the source for lead information, which is why premium publishers should be doing better than sometimes they are.”
The good news, says Manning, is that he now believes advertisers are starting to make those distinctions.
David Pidgeon is the editor of Mediatel News
Nick Manning, Senior Vice President, MediaLink UK // Laricea Roman-Halliday, Head of Digital Media, The Specialist Works // John Cole, Chief Customer Officer, Ezoic //Ben Walmsley, Digital Commercial Director, News UK // Simon Halstead, Head of Open Demand EMEA, Oath Ad Platforms // Chris Taylor, Chief Information Officer, Telegraph Media Group // Damon Reeve, The Ozone Project // David Pidgeon, Mediatel News (chair)
Mediatel's dmexco debate was held in partnership with Ezoic. All reporting is independent.