Publishers know their competition, and, increasingly, they aren’t competing with other pubs; they’re competing with Big Tech.
Belgian publishing house DPG Media made news last week for its decision to stop selling in-app ads on the programmatic open market, just one of many moves it’s made on its journey to disentangle itself from the influence of Google’s ad platform and compete for direct ad budgets.
DPG began laying the groundwork to phase out open auctions five years ago, around the time Google Ad Manager introduced its Unified Pricing Rules, Stefan Havik, DPG’s chief digital officer, told AdExchanger.
That was “the last drop” in a deluge of platform changes that gave publishers “less control [and] less transparency,” he said.
Scaling up
Around the same time, DPG noticed more issues with ad quality, including an influx of celebrity imposter ads hitting its properties, Havik said. Plus, GDPR had been in effect for about a year, and DPG had data privacy concerns related to broadcasting audience signals in the programmatic open market.
Those concerns led DPG down a path of media acquisitions and in-house tech development to better compete with social platforms.
“One of the first conclusions we had was, ‘We’re not big enough to make it appealing enough for the market to adopt,’” he said.
And so DPG bought publishing companies across Belgium, Denmark and the Netherlands to increase its reach, including Medialaan and Independer (2019), Sanoma Media Netherlands (2020) and RTL Belgium, Kidsweek, Samsam and Wikipower (2022). DPG’s planned acquisition of RTL Nederland, announced in 2023, is still pending regulatory approval.
Having ticked the box on scale, DPG also invested in its own in-house ad tech. Last year, it launched its Ad Management platform – an alternative to Google Ad Manager that works similarly to Facebook Business Manager – and, in July, a data collaboration platform with clean room capabilities. It also has a self-serve buying platform and an in-house creative agency.
By 2021, DPG had migrated its last domains off Google’s ad server and now uses FreeWheel for short- and long-form video and Microsoft Advertising’s Monetize ad server for everything else. It also uses Microsoft Advertising’s SSP and works with Index Exchange.
Today, DPG uses Google’s ad platform only to sell backfill inventory on its web domains, which represents less than 5% of its digital revenue, Havik said. More than half of DPG’s sales are direct.
Doubling down on direct response
To drive adoption of its new tech stack, however, DPG also needed to launch new, in-demand ad formats that could only be purchased from it directly, Havik said. It saw an opportunity in performance-focused ad products.
“Publishers have been notoriously bad at direct response,” Havik said. “We felt we needed to be more competitive with Meta and Google from a performance perspective.”
In the past, DPG mostly sold standard IAB banner ads, which make sense for branding campaigns, but they aren’t great at driving performance, Havik said. Meanwhile, DPG noticed social media platforms driving performance with rich-media formats that fell outside the IAB’s guidelines and were designed to appear native to their platforms.
That led DPG to introduce its “seamless” ads format, which are shoppable ads, carousels and video placements that feel like they fit within the flow of DPG’s various in-app experiences. “The fairest comparison is what Instagram does, or Strava – ads natively built specifically for that platform,” Havik said.
Because these native formats load from its content management system, DPG decided not to sell them via third-party ad tech for two main reasons: faster loading and improved performance.
“But it also helps make our Ad Management platform more attractive and boosts direct sales,” Havik said.
Performance improvements come from the direct integration with DPG’s ad server, which provides advertisers with more signals to optimize against, he said, adding that seamless ads have an average clickthrough rate of between .5% to 1%, which is 5x to 10x better than an average banner ad.
And since DPG doesn’t collect any extra ad tech fees for using its Ad Manager or its data platform, advertisers end up with a better return on their ad spend than if they’d purchased ads through other platforms, Havik said.
Adopting the playbook
DPG is now able to attract the long tail of smaller direct response advertisers, Havik said.
Agency partners such as Matterkind have also begun shifting social budgets toward DPG. Matterkind, in particular, represents a lot of Dutch government contracts, he said, and DPG’s investments in its own ad tech stack allow the company to benefit from the Dutch government’s efforts to spend more directly with local publishers.
Still, it’s challenging to compete with the big platforms, which can rely on trolls and other deliberately polarizing posters to drive engagement, whereas publishers risk damaging their reputation for brand safety if they publish divisive content, Havik said.
Plus, the platforms have made major investments in AI-driven optimization features, such as Google’s PMax and Meta Advantage+ Shopping Campaigns. DPG is exploring its own optimization offerings and is testing a conversion API internally that it plans to release next year.
DPG recognizes that its size and technical prowess place it in a privileged position as a publisher, Havik said. But he believes smaller publishers could follow a similar playbook by banding together to sell their inventory exclusively through a collective.
“You see all these [publisher] alliances and collaborations, and they seem to not really go anywhere, because nobody’s really committed,” Havik said. But publishers could “use our playbook and make sure they’re the default buying route for that market.”
