Broke But Not Busted: Publishers’ Epic Battle For Media Monetization

neillustigThe Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Neil Lustig, CEO at Sailthru.

The struggle that publishers are facing when it comes to monetization is so pervasive that many aren’t even bothering to hide the evidence. But it’s not earnings reports, revenues or the long-standing string of acquisitions that showcase the challenges – it’s publishers’ websites.

The red flags are both on the surface and hiding behind a thin curtain. They all allow readers, competitors and business prospects to read the writing on the wall: Today’s approach to revenue generation is too short-term to be anything besides short-lived.

The problem is the overindexed reliance on ad tech, rather than a strategy with first-party data and owned channels as the foundation. In the foreground it’s clear when a website is overrun with ads – display, outstream video and paid content syndication modules crowd the screen. And in the background, tools like Ghostery give visibility into the number of ad tags a publisher is running.

Trouble Ahead, Lady In Red

Why is this the sign of troubling times ahead for any given publisher? It means they do not know how to benefit from data and signals produced by their audiences with every click, view and swipe. Rather than leveraging data to advance their businesses via product development or customer exploration, for example, they instead willfully hand over that data to advertisers and ad tech vendors.

But the trade here is not a fair one. It’s like stopping someone in the street and asking for the time – and rather than looking at their watch, they take yours off your wrist, read you the time and keep your device.

The ad tech industry, which is constantly chasing growth and even higher company valuations, will stop at nothing as it pursues advertiser dollars, even at the expense of publishers. In a rush to monetize digital properties with ad exchanges, publishers give up their rights to valuable data, and with it they are tossing away their foundation for a revenue-rich future.

Readers today now hold all of the power. They choose when they want to click, what they want to read and what ads they want to see or not see. According to a 2016 IAB report, 26% of desktop users and 15% of mobile consumers use blockers to remove ads from publishers’ websites.

In a rational world you’d see publishers doubling down on user experience and determining how to solidify relationships with top readers. Instead we’re seeing everyone hit the easy button and drop more and more ad units and tags on their pages, slowing down the experience. And this is where both ad tech and publishers will both lose.

Measuring What You Manage

But not all hope is lost. Enter first-party data as the new foundation for the future of media monetization. By developing a data strategy that puts first-party data at the core, publishers will have the ability to truly understand their audiences in a manner well beyond what’s available in demographic-centric DMPs.

Through analysis of this data, audience development, marketing and product teams can increase speed to innovation. Only then will publishers be able to offer a better experience to their readers.

This is not conjecture or hyperbole. It’s an approach that’s already being proven. New York Media, for example, is taking a wholly different approach to data and experience management by moving from a focus on social distribution to reinvest in its owned channels.

Meanwhile, Business Insider leveraged implicit interest data to identify reader preferences and subsequently launched a now high-performing technology-focused email newsletter. Within the email newsletter, all content is personalized to the individual reader’s preferences within the tech topic.

DC Thomson, a European publishing enterprise, concluded that its email subscribers are hundreds of times more valuable than social media followers, so it is using its data to focus on cross-channel personalization.

The New York Times is bringing new cooking and watching products to market based on what it knows about how its readers engage with its online content.

In the last three years we’ve seen every route taken in an attempt to monetize what’s new: mobile-first, product-first, digital-first, video-first. But all along, readers and subscribers have been freely giving publishers what’s needed to monetize based on both interest and intent through their opens, clicks, downloads and taps.

This is the key to improving engagement, lifetime value and setting the foundation for monetization. It’s time to become audience-first and simply monetize what’s known.

Follow Sailthru (@sailthru) and AdExchanger (@adexchanger) on Twitter.

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