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How Publishers Use Advertising Technology to Increase Revenue

Sep 22, 2016 / by StackAdapt

publishers use advertising technology to increase revenue

In the age of social media, publishers and media companies still dominate consumers’ attention. On average, consumers spend eight hours a day consuming media, of which only about an hour is spent on social. To understand the rate at which consumers are shifting their attention online, we can simply look at the graph below to see where attention has increased (and declined) in the last ten years:

 daily media consumption image

 

As internet usage dominates the market, brands hungry for consumer attention have naturally increased their digital ad spend.  While there are many ways to monetize attention (video, banner advertising, etc.) one of the fastest growing formats is sponsored content – an initiative between a publisher and a brand to produce high-quality, value adding content organically integrated into the user experience. Simply put, it is a piece of content presented by a publisher on behalf of a brand. This initiative is driving massive revenue for the latter (around $3B per year US wide). For publishers like The Atlantic, it accounts for over 60% of their entire revenue.

 

The Common Values that Led to Sponsored Content

 

Unlike old fashioned advertorials, common in the days of newspapers and the early days of the web, brands have grown to understand that tricking consumers isn’t sustainable. So, the majority have committed to creating content that offers actual value to readers: Be that entertainment, education, information, or inspiration, those pursuing the sponsored content route are looking to create impactful, meaningful experiences for consumers. Finally, an objective that publishers can get behind. The content itself can be created entirely by the brand’s content team or the publisher, but is most commonly a collaboration between the two.

 

 

 

The Content  Distribution Challenge

 

Brands’ marketing and advertising initiatives are by definition focused on cost-effectively reaching as many relevant audiences as possible. Before programmatic technologies emerged, distribution of sponsored content could only be done through manual content syndication. But as advertising platforms became the staple channel for digital advertising, brands began looking for content distribution technologies with a similar level of sophistication in targeting and optimization.

 

With the fragmentation of audiences across the web, it is becoming increasingly challenging to find audiences at scale.

 

Meet programmatic native advertising – a technology-powered channel for reaching hyper-relevant audiences with content. Still in the innovation phase of the product market cycle, programmatic native advertising technologies are just beginning to make headway, which opens many doors for publishers to secure a leadership position in the native advertising space. It is now possible for publishers to amplify content distribution (keeping brands happy) and simultaneously sustain themselves in a challenging market.  

 

 

The Leap into Programmatic & Audience Extension

 

Publishers have started bundling their sponsored content with audience extension delivered through programmatic native advertising technology.

 

Audience extension converts a publisher’s traffic into an advertiser’s audience, and is a great way for publishers to capitalize on their web traffic without necessarily using up additional inventory.

 

Through the Real Time Bidding (RTB) process, programmatic ad platforms are able to target consumers behaviorally, contextually and geographically the moment they enter a web page or app. White space is instantaneously converted into native advertising promoting sponsored content.

 

In the midst of all this technology, Publishers bring integral knowledge to the table: Firstly, an audience. Secondly, an understanding of that audience. Applying this understanding in the context of programmatic yields the following benefits:

 

For publishers:

  • Increased average contract value
  • Drive additional readers to their own properties

 

For brands:

  • Increased exposure to relevant audiences across the web
  • Reduction of the cost per reader
  • Outsourcing expertise and a deeper understanding of publisher audiences

 

 

The Future of Sponsored Content

 

Even as brands increase their output of owned content, sponsored content initiatives are more than likely to increase. Publishers that embrace audience extension through programmatic native advertising technologies offer brands hyper-relevant content distribution across the web, securing themselves increased ad revenue in the process.

Topics: Insider, Blog Posts, Featured, Resources, FAQ

Written by StackAdapt

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