Even a large global news conglomerate like Axel Springer can have trouble monetizing video on its own.
Although Axel Springer was selling through programmatic and direct, “we had a lot of under-monetized inventory,” said Mathias Sanchez, SVP of global strategic partnerships and advertising.
On Tuesday, Axel Springer announced a multiyear partnership with video technology company Connatix to create new contextual video ad inventory on certain sites in Axel Springer’s portfolio.
Under-monetized
But don’t call this partnership a “pivot to video.”
Axel Springer has had video on its sites for years, working with several partners to monetize that content, Sanchez said. Connatix will integrate its ad unit into an existing video slider on Axel Springer sites to run pre-roll and mid-roll video placements.
To start, the partnership will focus on desktop and mobile web inventory from Axel Springer’s WELT and BILD brands and related sub-brands. From there, other sites within the portfolio will have the opportunity to add the solution if their leadership wants to try it out, Sanchez said.
Previously, Axel Springer didn’t have an established strategy for optimizing its video ad revenue, Sanchez said. The Connatix partnership will help Axel Springer run experiments across desktop and mobile sites to determine which placements draw the most revenue.
According to Sanchez, the publisher’s decision to be more deliberate about its video tech stack wasn’t spurred by any particular revenue shortfalls. Rather, it was about testing new incremental revenue streams to shore up the ad business ahead of third-party cookie deprecation.
Still, Sanchez conceded that the traffic boost most digital news publishers experienced during the COVID-19 pandemic has waned, meaning publishers have fewer impressions to monetize, and Axel Springer is no exception. And, while spending through the first half of this year by European advertisers has been healthy, especially in the retail and travel verticals, the US has been a different story, Sanchez said.
Still, “things are recovering” in the US, he said, and should further normalize into Q4.
Short-term monetization concerns aside, building a more sustainable long-term business model for news is one of the biggest challenges facing the digital publishing industry. Even if it’s largely been able to weather the current macroeconomic storm, Axel Springer knows it needs to offer buyers a product that will remain viable in the post-cookie ecosystem. Contextual video is one such alternative.
Buy-side flexibility
Axel Springer’s partnership with Connatix helps with cookieless targeting, inventory curation and measurement capabilities and bolsters the publisher’s relationships with buyers in the US and Europe, Sanchez said.
Connatix has demand-side integrations with The Trade Desk and Google’s DV360, among other DSPs.
On the targeting front, Connatix offers a contextual solution that uses AI to parse video content for contextual signals rather than solely looking at URL-level data. It also takes video metadata – like contextual tags applied by the publisher – into account when categorizing content.
Although the solution primarily relies on the IAB Tech Lab’s Content Taxonomy for categorization, buyers can use whichever content taxonomy they prefer, said Bill Swanson, SVP of EMEA at Connatix.
Connatix can sell video ads on Axel Springer’s behalf via open auction, programmatic guaranteed or private marketplace deals, again depending on the buyer’s preference, Swanson said.
Advertisers often cite a lack of transparency as a reason why they’re hesitant to buy into publisher-driven contextual targeting solutions. But Axel Springer is hoping that the transparency Connatix’s platform provides buyers into what inventory they’re purchasing will be enough to overcome those concerns.
“It’s important for advertisers that it’s clear and transparent where they’re investing and where their ads are appearing,” Sanchez said.
Overcoming buyer reticence is a tall order, especially given persistent buy-side qualms about the brand safety of news content. But Axel Springer expects that contextual video targeting will be a viable strategy for the foreseeable future – particularly the post-cookie future, Sanchez said.
“We created a global strategic partnerships unit a couple of years ago to maximize long-term revenue and profitability,” he said. “We found a partner that is aligned with us in terms of values and that is willing to support quality journalism.”
