Research released by AOL has revealed that access to first-party data is more important than ever for UK publishers, but this crucial currency is being hampered by a lack of effective analytical tools.
AOL conducted one of the largest studies of its kind in the UK and US, surveying current publisher trends according to 600 key decision makers, including over 300 from the UK’s biggest media owners and ad networks.
Over 70 per cent of UK publishers questioned confirmed that access to first-party data across multiple platforms was very important, with nearly all (91 per cent) now using a Data Management Platform (DMP) to monitor and optimise campaigns. And while the ability to evaluate and analyse data is now mandatory for publishers, the majority (56 per cent) stated they were dissatisfied with their current data analytics tools, citing monetisation for cross-device and audience segments, revenue and deal evaluation, and consolidation of sales data as key areas for improvement.
Growth in inter-dependency for revenue and audiences
AOL’s report highlights the dominant role of third party platforms in content consumption, with 86 per cent of UK publishers now receiving more than a quarter of their traffic from partners such as Google AMP, Apple News and Facebook. Most of the publishers surveyed said distribution media strategies and syndication is important to their future – scoring it an average of 7.4 out of 10 for importance – but the rise of content distribution exacerbates the challenges of data consolidation and analysis.
Rise of video
● Video ads will be the biggest revenue driver for UK publishers over the next 12 months. 20 per cent of those questioned ranked this as their top source of revenue, followed by display ads (16 per cent) and native advertising (12 per cent)
● Improved user experience is expected to drive digital video growth. 54 per cent agreed that better quality creative will be key to this growth, followed by better load times (53 per cent) and better targeting and personalisation (51 per cent)
Mobile growth and challenges
● Mobile continues to grow with 85 per cent of publishers seeing up to 50 per cent more growth in mobile revenue over the past 12 months. As a result publishers are investing more in mobile with three-quarters of those questioned saying they will be investing more in mobile over the next year
● But challenges persist, with ad blockers (55 per cent) and the quality of the consumer experience (45 per cent) seen as primary issues for publishers looking to optimise mobile opportunities
● The “Tech Tax” remains a real challenge, with over half of publishers using five or more vendors to develop, manage and implement advertising services. This technology tax can swallow up to 31 per cent of any digital programmatic media ad spend, which directly affects the amount of revenue publishers see from their own inventory, according to a TBR survey in North America and Western Europe.‧
● Programmatic accounts for the majority of current inventory sales (53 per cent vs. 47 per cent coming from direct sales) with many publishers using PMPs as a result. But PMPs are proving to be challenging for a number of reasons, with the largest publishers (revenue <￡50m) highlighting issues of conflicts with direct sold and open exchange sold inventory (59 per cent) and tech deficiencies (50 per cent), whilst for smaller publishers (revenue >￡5m) the cost of management execution (46 per cent), and lack of demand (32 per cent) were the biggest challenges
● As publishers seek to monetise more of their inventory, yield optimization remains an overriding concern, with almost three quarters (74 per cent) of respondents rating the challenge as 7 or higher on a 10 point scale
Some interesting differences between US and UK publishers also emerged as part of the research:
On the biggest mobile opportunities for publishers
● In the UK faster ad loads were seen as the biggest opportunity (48 per cent), but only equal third in the US (42 per cent)
● Conversely, 42 per cent of US publishers said mobile-first video was the biggest opportunity (vs just 32 per cent in the UK and 8th in the list)
In terms of the number and types of vendors used to develop, manage and implement advertising services
● US publishers are more likely to be using more vendors – 31 per cent are using more than 10 compared to 18 per cent in the UK
● As such US publishers are using more vendors in all types of account management – the biggest difference being for performance reporting vendors (42 per cent in US, 25 per cent in UK)
On the usage of heading bidding containers
● UK publishers seem more keen – 89 per cent are either using and plan to continue or plan to use in the next year, whilst 22 per cent of US are using and not sure they will continue or have no plans to (compared with 10 per cent in UK)
Analytics tools of value
● Most important for the US was ‘audience segments monetisation analysis’ (50 per cent, UK – 37 per cent), whilst in the UK ‘cross-device monetisation analysis’ was seen as of prime importance (48 per cent, US – 44 per cent)
“With the rapid evolution of content consumption and digital ad technology, publishers are confronted with many challenges when it comes to navigating the complexities of the current media landscape,” commented Henk Van Niekerk, Head of Publisher Platforms, AOL International. “From our unique standpoint as both a publisher and a publisher tech platform provider, AOL’s research has unveiled one of the broadest pictures yet of the issues and opportunities publishers face with monetising audiences, optimising ads and distributing their inventory. In this brave new world of media commoditisation, it’s more important than ever to equip publishers with the solutions they need to capture the maximum value of their audiences and content. That’s why AOL has invested heavily in our ONE by AOL technology platform, including our recent acquisition and integration of AlephD, the automated price floor optimisation software that helps publishers maximise their returns while maintaining a competitive landscape for advertisers.”