Programmatic advertising used to be an afterthought for The Associated Press.
AP, the largest and oldest newswire service in the US, makes the majority of its revenue through a subscription fee that news organizations pay for to access vetted content.
But there’s no reason why an entity founded in 1846 can’t also optimize its supply paths to improve advertising revenue.
“We’ve primarily been a B2B organization since our inception 175 years ago and so ad stacks and SPO (supply-path optimization) weren’t things we ever really discussed,” said Julie Tucker, who joined the AP in late 2018 as VP of global marketing.
“But when I arrived, I hired a new digital manager and very quickly this individual came to me and said that there were a lot of opportunities we weren’t maximizing on APnews.com,” Tucker said.
Although licensing is the lion’s share of the AP’s revenue, its dotcom also generates a good amount of traffic. “We realized we were leaving money on the table,” she said.
In late 2019, Tucker reached out to Kubient, an ad marketplace that went public in August, to audit the AP website and get advice on how to streamline the ad stack, which was full of redundant supply paths.
The AP was able to reduce the number of SSPs it works with by 50%, leading to an 80% increase in header bidding revenue and a 500% uptick in monthly video revenue.
AdExchanger spoke with Tucker and Paul Roberts, CEO and founder of Kubient, about the process of SPO.
AdExchanger: Why did the AP decide to streamline its ad stack?
JULIE TUCKER: People were buying us low and selling us high, and I didn’t even know it was happening. It blew me away, because it seemed like there was a very circuitous path from the ad space to the revenue, and we were losing a lot in the middle.
When it was explained to me I said, “Holy cow, how do we fix this, strip it back to zero and build it up again so that we have direct relationships with vendors and trading desks?”
At first, because we’re mostly B2B, there was a reluctance to lean into this. That’s why we got Kubient involved, so that we could see what we were missing and fix things we maybe didn’t even realize were broken.
They created a chart for me that showed how many pieces of code were sitting in the background slowing down the site functions and the number of trades we were going through to fill our programmatic – and it was extraordinary to see.
Paul, what exactly did you find in AP’s ad stack when you started poking around?
PAUL ROBERTS: We found a swamp of inefficiency, which is very typical. Publishers are constantly being bombarded by people that want access to their inventory, and it’s hard for them to say no to what seems like an opportunity.
For example, the AP had an SSP connected to APnews.com that was reselling to a second SSP that was reselling to a third – and then back to the first SSP before going to the demand side. This caused latency, which was bad for the user experience, and data leakage related to SSPs dropping code. We also found code for multiple DSPs.
When we pointed it out, everyone would look around the room and say, “How did this get here?” Our goal was to get the AP as close to the brand budgets as possible and remove the layers of inefficiency.
How did you fix it?
ROBERTS: First, we looked at who was actually bidding, what they were buying and the floor prices. Having identified where the budget was coming from, we saw the incredibly long journey it was taking on its way to the AP.
We removed a few of the partners sitting in between the AP’s property and the demand itself, which was relatively easy. Then we started going through all of the ads.txt listings to see who the buyers really were. Once we removed 30% to 40% of the AP’s ads.txt listings, their revenue went up rather than down.
We also looked at which header bidding technologies they had plugged in. When we started, a little more than 85% of their partners were bidding into their traffic in multiple. Now they’re down to about 40 direct partners. But it’s not necessarily just about the number and more so about how close you are to the actual budget.
How does the AP vet its tech partners these days?
TUCKER: The COVID situation put a big speed bump in front of us, but at least now we know that when opportunities do come we’ll be in a position to provide answers rooted in data and an understanding of our structure. It won’t just be, “yes,” “no,” or making it up as we go along. We can’t do that anymore. We’re past that stage.
As much as we were surprised about the situation we were in, I’m told it’s a pretty common position for legacy publishers.
What’s AP’s strategy these days when it comes to programmatic monetization?
TUCKER: Now that we’ve had a reset, done the house cleaning and thrown out the cruft, we’re working on how to grow programmatic to be a bigger stream of our revenue as we move into the future. We’re looking at new hires and building relationships that we didn’t have in the past.
What’s particularly interesting is the brands themselves, and how excited they are that we’re open for business. As a brand lead, that’s very inspiring to me. There are brands out there that really want to be on our platforms and knowing that has helped us be more discriminating and to ask for what we deserve.
This interview has been edited and condensed.