Curation is amazing – for SSPs.
It shifts power from buyers to sellers. Rather than DSPs and DMPs defining value through audience targeting – turning the open internet into a commodity – curation lets SSPs control media spend. Their closer, higher-fidelity view of publishers helps ensure ads align with quality content and relevant audiences.
So, curation, which has picked up a lot of steam over the past year and generated ongoing debate among publishers and ad tech companies, is bullish for sell-side ad tech intermediaries. It gives SSPs more weight in the supply chain. The question publishers continually ask is, “Is curation good for us?”
That’s the wrong question.
Curation isn’t the problem
Curation won’t move the needle for publishers, especially premium publishers. That’s not because curation is inherently flawed but rather because it leads to the reallocation of dollars within the programmatic ecosystem – and the programmatic ecosystem is flawed.
Publishers make significantly less money for each dollar they sell programmatically than for each dollar they sell directly. They cannot build a better business by improving programmatic revenue retention by a few percentage points – through curation or other means.
To shift the power dynamics of the advertising business in their favor, publishers need to better protect their intellectual property, prevent it from being commodified and either sell it directly or renegotiate with their programmatic distribution partners.
Solving this problem – publishers providing virtually unnegotiated access to their IP, thereby enriching others – means banding together. This is the rallying cry anyone on the sell side has heard at every publisher conference for the last 10 years.
Publishers have two options; both require collective action
Publishers have been getting hammered for more than a decade by two kinds of distribution partners: search and social platforms driving referral traffic and programmatic intermediaries driving advertising demand while collecting about half of each ad dollar.
The first dynamic is harder to reverse because it comes down to consumer behavior. Consumers have gotten used to going to search, social and now AI platforms to discover content. Publishers’ only chance now is to cut licensing deals in exchange for those platforms’ use of their content.
The shift to AI platforms such as OpenAI’s ChatGPT may provide the opportunity for publishers to band together and use their combined scale to extract payment from AI companies in exchange for the value of their content. This will only be sustainable if publishers maximize their leverage by negotiating together.
The second dynamic, the allocation of inventory to advertisers, is significantly more feasible to reconfigure. But it also requires collective action.
Few publishers have the scale to change the economics themselves by ditching the open market unilaterally. But publishers could get together, select a few intermediaries and cut deals with them collectively. Ad tech platforms need publishers’ content and audiences. If publishers negotiated en masse, they could drastically reduce the combined SSP and DMP cut.
Publishers need to see the big picture
Publishers have unique value: their content and their audiences. Twenty years ago, they essentially made a deal with the devil, allowing Big Tech platforms to control their audiences and ad tech to take the reins of monetization. This is the deal that needs to be reversed.
Curation is fine. It may even reward higher-quality publishers and surface content from mid- and long-tail publishers that is relevant to advertisers. But because it deals with the reallocation of programmatic dollars, it won’t drastically change the fate of publishers one way or the other.
On the contrary, banding together, perhaps through a trade organization, could shift the tectonic plates of the advertising and media industry. Publishers need to take up that mantle. Otherwise, it could well be another decade of the same old song at conferences.
“The Sell Sider” is a column written by the sell side of the digital media community.
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