THE STATE OFDIGITAL ADVERTISINGFOR PUBLISHERS

2016

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10 Digital Advertising Trends for Publishers

Conclusion

About the Data

Table of Contents

VIDEO IS KING• When asked to name the biggest trend in digital,

publishers interviewed overwhelmingly said video

• Gap between advertiser demand and publisher supply has created a seller's market

• Publishers who develop for 'video everywhere' approach now will be better positioned to win

Video = ValueWhen asked to rank ad formats on perceived ROI, publishers consistently gave video the highest marks.

Survey Question:In your experience, what digital ad formats have a high ROI or drive the most revenue? Please rank on a scale of 1 - 5, with 1 representing High ROI / Revenue and 5 representing Low ROI / Revenue.

Facebook Dominates50% of those surveyed have run video campaigns on Facebook, compared to only 31% on YouTube. As social networking has taken over the web, publishers have responded by distributing their content with both paid and earned posts on the social network.

Video Grows Beyond O&OsIn the past year, 61% of publishershave sold video ads as a part of theiraudience extension packages.

Key Findings

PROGRAMMATIC HAS EVOLVEDFROM PUBLISHER FOE TOPUBLISHER FRIEND

• Publishers fueling programmatic's 40% year-over-year growth

• Using to increase yield of both their unsold (through exchanges) and directly-sold (through audience extension) inventory

• Publishers who create their own private marketplaces will retain value of CPMs

Programmatic is an opportunity, not a threat.For the majority of publishers we interviewed, programmatically-powered audience extension is their fastest growing revenue source.

of publishers surveyed currently leverage programmatic to power audience extension.

Key Findings

of publishers surveyed do not currently leverage programmatic to power audience extension, but plan to in 2017.

MOBILE IS STILL A CHALLENGE,BUT FOR NEW REASONS

While the mobile user experience has improved, most publishers remain at the starting line of monetizing mobile.

• Consumers spend 25% of their time on smartphones, yet the channel grabs just 12% of ad budgets

• Mobile traffic comes from clicks on article links within social feeds that leaves just one article to monetize per user, per visit

• Cookie-based targeting doesn’t work on mobile

• Publishers must adopt mobile-first ad formats

Devices may not be the concern, but mobile consumption patterns are.While mobile devices may not be the pain point, 48% of publishers are ‘very’ or ‘extremely’ concerned with the increase in mobile consumption itself*. Less inventory and less direct traffic can mean less revenue.

Key Findings

PUBLISHERS RELY ON FACEBOOKMORE THAN EVER, BUT IT’S A DOUBLE-EDGED SWORD

• Facebook has surpassed Google as leading driver of publisher referral traffic

• Site traffic easily disrupted by algorithm changes

• The new user path to content is clicks on article links from Facebook's mobile app to small screens with few ads

• While the improved user experience of Instant Articles sounds compelling, publishers wary of becoming dependent on third-party platforms that define how their content is monetized

• People-based targeting, through sites such as Facebook, may be able to solve this

Instant Articles may help, butpublishers are skeptical.While the improved user experience of Instant Articles sounds compelling, publishers are wary of becoming dependent on third-party platforms that define how their content is monetized.

of publishers we surveyed useor plan to use Instant Articles.

Key Findings

13.6%

CABLE DOUBLES DOWN ON VIDEO,WHILE LOCAL BROADCASTERSCAST A WIDER NET

• As cable companies further digitize their programming, many focusing digital sales efforts almost entirely on video

• Local broadcasters, on the other hand, are positioning themselves in a manner similar to that of an advertising agency by becoming a one-stop shop for all types of media—including TV, display, audience targeting, social, search, and email products

LOCAL PUBLISHERS VALUEOPERATIONAL SIMPLICITY OVERCUSTOM AD PRODUCTS

• Local publishers are actively paring down their vendor lists to reduce ad tech taxes and simplify campaign workflow

• Many are willing to limit creative freedom and even eliminate high-impact ad formats altogether if it will help them run more seamless campaigns

Campaign complexity is a pain point44% of publishers indicate being “very” or “extremely” concerned with the sheer complexity of digital campaign execution.

Multiple vendors are the normNearly 54% of publishers surveyedwork with at least four ad tech vendors,and 5% work with more than 16.

KEY FINDINGS

NATIONAL PUBLISHERS VALUECUSTOM AD PRODUCTS OVEROPERATIONAL SIMPLICITY

• National publishers are better equipped to handle the operational complexities that challenge local publishers

• They bemoan having too many vendors, but are willing to tolerate complicated workflows if it allows them to accommodate every RFP

Specs still matterEven though national publishers like to feature “custom” ad opportunities, most are beginning to formalize these unique ad products with specs and templates to make them easier to execute.

Creative freedom trumps simplicityNational publishers are unwilling to limit creative freedom and will work with many vendors to execute on a variety of high-impact ad formats.

KEY FINDINGS

MORE VENDORS MEAN LESSMEANINGFUL INSIGHTS

• Performing an apples to apples comparison of reports from multiple vendors has become a fundamental problem for publishers

• Differences in ad formats, analytic tools, metric definitions and device capabilities creates confusion

Most important metrics when measuring a campaign

Survey Question:What metrics are most important when measuring a digital branding / direct response campaign? Please rank on a scale of 1-6, with 1 representing most important and 6 representing least important.

CORPORATE AND FIELDSALES TEAMS VIEWATTRIBUTION DIFFERENTLY

• In the digital era, where data is abundant, the pressure for publishers to prove their value in the sales chain is greater than ever

• Corporate executives are wary of relying on a sales conversion KPI, while sellers view their inability to report on sales attribution as a weakness

• As cross-channel audience identification improves, so will attribution

Attribution is amajor concernof publishers.

of publishers that were “very” to “extremely”

concerned.

Key Findings

of publishers that were“not at all” to “slightly”

concerned.

AD BLOCKING IS A THREAT,BUT PUBLISHERS ARE UNSUREOF WHAT TO DO

Ad blocking is a critical threat to publishers and a problem that they know will have to be dealt with, but for now, it's not impacting revenue enough to make it a top concern.

On long list of concerns, ad blocking isn’t at the topPublishers are feeling more urgency to address new(er) advances such as viewability, attribution and measurement, and ad fraud and bots, than they are ad blocking.

Ad blocking is a threat.46% of publishers said ad blocking is either “extremely” or “very” concerning.

KEY FINDINGS

The world of digital continuesto spin at a remarkable pace.The good news is that the business of digital advertising is maturing and publishers arebeginning to operationalize in a much more thoughtful way than they had in past years. Thismeans simplifying sales pitches, reducing vendor duplication, making programmatic workfor them, and creating elegant video and mobile ad experiences that meet market demand.

At the same time, publishers are under attack like never before as Facebook replacesthem as the daily homepage for information, and mobile consumption disrupts ad formatsand inventory volume. Those who will win in 2016 and beyond will be those who producepremium content to demonstrate the quality of their audience, brand and inventory.It will be those who turn threats into opportunities by leveraging social and mobile togrow audience. It will be those who create operational clarity by consolidating vendorrelationships to reduce duplication and streamline workflow. Importantly, it will be thosewho both develop ad product catalogs that scale with market demand and invest ineducating their teams to increase their human and product value to advertisers at everypoint of a campaign, from pre-sales concepts to post-campaign performance translation.

Conclusion

About the Data

What keeps publishers up at night?

The issues facing publishers today are vast and interrelated. When asked how concerned are you with the following, 31% - 69% said they were “extremely” or “very” concerned with every one of the twelve issues.

About Mixpo

Mixpo combines technology with human expertise to simplify how publishers sell, produce, and manage superior digital ad campaigns. Our technology makes it easy to create quality ads that engage audiences and deliver more value to advertisers. Our people provide the tools and expertise to streamline campaign management and boost digital sales. Please tap, click, or call us if you’d like to learn more about how we can help.

To learn more visit www.mixpo.com or request a demo: www.mixpo.com/contact/.

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