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—— WHITEPAPER
Data Matters: The State of the Publisher Industry
permutive.com / digiday.com
Today’s most successful publishers understand their audience as individuals, rather than mass segments. Having a better view of how users interact with content across all touch points allows publishers to personalize the on-site experience, which in turn can grow loyalty, increase advertising revenue and optimize new revenue channels. It’s a people-based — not product-based — approach.
However, as publishers add new revenue channels they’re also adding more
technology to manage each one. Furthermore, regulators, browsers and
consumers are blocking the third-party cookies they’ve relied on to connect
the dots on their users. This increasingly siloed and disparate technology
stack creates a barrier to understanding audiences across all platforms —
and is a barrier to achieving a single customer view (SCV).
In partnership with Digiday, we surveyed over 200 publishers in the US
and UK to understand their focus for 2019, including how they are planning
to optimize advertising and diversify revenue streams, the challenges of
selling with data and the importance of a SCV. As data becomes a key
battle ground in the fight for the audience and advertising dollars, it’s
crucial to know where success lies and what’s blocking it.
Here’s what we found.
Introduction
Introduction 2
Headline Statistics 3
Advertising remains a priority 4
Increasing demand is the biggest advertising priority 5
Publishers are struggling to sell with data 6
The RFP challenge 7
Publishers reduce their reliance on third-party data 9
Diversifying revenue: The focus now versus the next 12 months
11
Achieving a single customer view and why it matters 12
The what, why and how of SCV 13
What’s blocking the single customer view? 14
Closing thoughts 15
Table of Contents©
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66%of respondents moved open marketplace inventory to a private marketplace in 2018
50%drop in publishers solely relying on third-party data for ad targeting over the next year
27% of publishers believe their business’s ability to sell with data is not effective
90% of publishers say having a single customer view is important to their business
61% of publishers are unable to respond to at least one RFP a month
45% have the technology in place to achieve a single customer view
Headline Statistics*
*Based on US and UK data across 200 publishers
3
Publishers are predominantly focused
on increasing advertising revenue in the
coming 12 months. However, there is
also a suggestion that they don’t want
to become too reliant on advertising as
their only revenue stream. In one year’s
time, the percentage of publishers where
advertising accounts for over 81 percent
of revenue will reduce. This suggests
that here is a desire to diversify revenue
streams — something that we’ll
explore later.
The need to diversify revenue beyond advertising is a growing focus for the publishing industry, but one that is still evolving. This is reflected in our research showing that publishers objectives and revenue focus for 2019 remain firmly in advertising for now, and in the near future.
Advertising remains a priority
0%
10%
20%
30%
40%
Advertising as a percentage of total revenue now and in 12 months● Now ● In 12 months
0–20% 21–40% 41–60% 61–80% 81–100%
12%
26%
27%
23%
12%
10%
21%
33%
25%
11%
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Inventory supply and ad yield are also a focus and rank highly as objectives for this year. However, when taking
a closer look there is a shift of inventory from the open marketplace to private, with 66 percent of respondents
moving at least some of their inventory to a private marketplace last year. The data also shows there’s still some
reluctance to move to the private marketplace for the remaining third (34 percent) of publishers.
40%
21%
18%
16%
5%
Secure more budget from advertisers and
agencies
Increase the scale of targetable inventory
Increase volume of premium units
Increase volume of inventory sold through
PMP and PG
Other
Increasing demand is the most important advertising objective for publishers in 2019, as 40 percent want to secure more budget from advertisers (27 percent) and agencies (13 percent). Splitting out advertisers and agencies also suggests that publishers are seeking a direct relationship with advertisers rather than just relying on budgets from agencies.
Increasing demand is the biggest advertising priority
Publisher advertising objectives in 2019
0% 10% 20% 30% 40%
Advertisers (27%) Agencies (13%)
5
The desire to increase demand for their advertising, does not appear to be matched by publishers belief in their ability to sell advertising with data. We found that 27% of publishers believe that their ability to sell with data is not effective.
Publishers are struggling to sell with data
27%
31%
42%
● Effective
● Somewhat effective
● Not effective
How publishers rate their business’s ability to sell with data
27%of publishers believe that their ability to sell with data is not effective
Most digital salespeople feel more at home selling partnership or contextually targeted campaigns. When it comes to selling behavioural or audience targeting, we normally see that there’s less confidence explaining how it’s different, and what the benefits are. Data can be intimidating and it’s easier to gain credibility talking about what you do know.
India Ferard, Head of Customer Success
Permutive
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A big part of selling advertising with data revolves around the RFP and 61% of publishers are unable to respond to at least one RFP a month. Forty percent of publishers feel unable to respond to between 1–2 a month, 15 percent feel unable to respond to 3–4 and six percent feel unable to respond to five or more RFPs. There is also an appetite to speed the process up and deliver faster responses — 40 percent of publishers take longer than one week to answer an RFP. Only 11 percent of publishers feel able to respond in a day, but 35 percent would like the ability to respond in that time frame.
The RFP challenge
0%
10%
20%
30%
40%
50%
● Time it takes now ● Desired response time
11%
35%
49%
38%
40%
27%
Within a day Up to one week Over one week
How long it takes publishers to answer RFPs
60%
11% of publishers feel able to respond in a day
35% would like the ability to respond in that time frame
7
When it comes to accelerating and improving RFP responses the biggest area highlighted was a lack of resources to execute. Meanwhile, a lack of granular audience insights and inventory scale to deliver were the other two biggest factors blocking effective RFP responses.
The top five barriers to answering RFPs
The RFP challenge (cont)
1Lack of resources
2 Lack of granular audience insights
5 Low third-party data match rates reduce scale
*Ranking based on weighted average
When working with publishers to build RFP response templates, we see that the most successful have a dedicated commercial data or data and insights team. They quickly define their audience strategy and effectively message an audience narrative internally. The repeatable processes for pulling insights that these teams build makes it easier for sales teams to focus on positioning the value of their first-party data offering.
Michael Ogunjobi, Senior
Customer Success Manager
Permutive3 Lack of inventory scale to deliver
4Lack of data knowledge within the commercial team
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With insights and scale being such a big barrier to sales success, there’s a thirst amongst publishers for first-party data to differentiate and improve both scale and insights capabilities.
Publishers reduce their reliance on third-party data
0% 0%
10%
20%
30%
40%
50%
● Predominantly third-party data ● Predominantly first-party data
48%
40%
52%
60%
Today
8%
4%
Today12 months time 12 months time
First-party versus third-party data use for ad targeting The number of respondents only using third-party data for ad targeting
70% 10%
60%
9
It’s no wonder with the impact of browsers blocking third-party cookies on publishers’ ability to understand the audience behind the screen.
The Data Management Platforms (DMPs) they rely on are built on third-party cookies, leaving publishers blind to chunks of
their audience. This not only limits the scale of the inventory they have available but also hugely impacts their insights. If you
can only see half of your audience, then you halve your ability to understand and target that audience.
Publishers control some of the most valuable first-party data in the online ad ecosystem, at a time when brands are crying out
for the trusted, brand-safe environments they provide. They need to think about how they can use their own first-party data
with technology that isn’t built on third-party cookies. This will provide unique value in RFPs and increase inventory scale as
they can see their whole audience.
● Other browsers● Safari● Firefox
Can’t activate these audiences using third-party cookies
55%
32%
13%
Percentage of publisher’s unique users by browser*
*Data taken from across Permutive’s publisher customer base globally©
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Publishers want to continue to drive revenue from advertising, but many also show a desire to explore other channels over the next 12 months. The results show there is no clear winner in revenue diversification channels, highlighting slight uncertainty on the best approach.
The top three revenue generating channels today are advertising
(79 percent), content marketing (48 percent) and events (43 percent), and
the top three revenue generating channels publishers are adding in the next
12 months are subscription models (31 percent), events (27 percent) and a
joint third consisting of affiliates and content marketing (26 percent, both).
Diversifying revenue: The focus now versus the next 12 months
What we take from this data is that there
is uncertainty about where to focus
efforts next year. There is no channel
that stands out as a focus, however,
subscriptions seem to be marginally
ahead. Our experience suggests that
having a single focus (e.g. subscriptions)
and proving success allows you to
move onto other channels much more
effectively. Trying out lots of different
channels simultaneously means that you
do lot’s of things but none effectively.
79%
Advertising
Events
Subscription models
Affiliates
eCommerce
Merchandise
Other
Content Marketing
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
● Currently Generating Revenue ● Adding in the next 12 months
Revenue focus by channel: now and in the next 12 months
25%
48%
43%
26%
27%
41%
38%
31%
26%
24%
25%
15%
34%
27%
3%
11
Knowing and understanding the behavior of your audience as individuals across platforms is crucial.
But with revenue diversification creating siloed departments, each with
their own technology and systems — and each building and managing
disparate data sets — creating this single customer view (SCV) feels like
an impossible task. But it’s one that a huge majority of publishers believe
is important, despite not having the means to achieve it just yet.
Our research shows that 90 percent of publishers say having a single
customer view is important to their business, but less than half
(45 percent) have the technology to achieve it.
Achieving a single customer view and why it matters
● Important● Somewhat important● Not important
● Yes● No● I don’t know
64%
26%
10%
45%
36%
9%
The importance of a single customer view to a business
Do publishers have the technology in place for a single customer view?
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● Yes, it solved all challenges● It solved some, but not all● No, it didn’t solve any challenges● I don’t know
23%
68%
Recognizing the importance of SCV is the first step, and for those that have progressed to implementing SCV technology, the systems, motivations and successes vary.
A third (30 percent) of publishers that have the technology in place use a customer data platform, 28 percent use a data
warehouse, 21 percent have built a solution in-house, 12 percent use a customer data infrastructure and 7 percent don’t know
what technology powers their single customer view. Unifying customer data is the main motivation behind using technology
to power a SCV, while increasing audience insights and personalizing user experiences were second and third respectively.
Almost a quarter (23 percent) say that their solution has solved all challenges, but 68 percent said it hadn’t solved all their
challenges and four percent said that none were solved.
The what, why and how of SCV
59%
4%5%
56%
52%
31%
29%
28%
20%
20%
Unifying customer data
Increasing audience insights
Personalizing user experience
Technology consolidation
Revenue diversification
Increasing dwell time
Reduce page latency
Create a more flexible tech stack
0% 10% 20% 30% 40% 50% 60% 70%
Publishers motivations for creating a single customer view
Did publishers SCV solution solve their challenges
13
These challenges can be significant for some publishers, particularly as revenue diversification has created more disparate
technology and siloed teams for publishers. Legacy businesses have systems and processes that will require the whole
workforce to shift their way of working, but to compete with the duopoly for advertising revenue, and to move to a place
where that reliance on advertising revenue lessens with the success of new revenue streams, achieving a single customer
view is the goal. To succeed, publishers must seek technology that works with their existing disparate technology tools to
create a unified view across teams and channels to deliver a single source of truth on a user.
1Disparate technology
4Lack of internal resources and skills
2 Siloed teams
5 Lack of executive sponsorship
3 Lack of funding
What’s blocking the single customer view?
*Ranking based on weighted average© 2
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Our research highlights a disconnect in the motivations and aspirations of publishers. Here are three major challenges and what publishers should focus on:
Understanding and investing in systems, structures and technology that lessens these disconnections, and lessens barriers to
understanding your audience, should lead to successful revenue diversification and growth for publishers in 2019 and beyond.
Closing thoughts
While a big push for publishers in 2019 is increasing demand by securing more advertising budget from brands and agencies, many feel unable to respond to RFPs. The challenge here lies in speed, insights and scale when responding to RFPs.
When asked what’s driving the success of data management platforms, fewer respondents are seeing ROI from scale and audience insights. The challenge here lies in an over-reliance on third-party data with low match rates and third-party cookies being blocked — reducing audience scale and the insights you have on them.
Ninety percent say it’s important to their business, but only half have the technology to achieve it. The challenge here lies in the increasingly disparate technology and teams all driving towards diversifying revenue.
We see that publishers have much higher success when they appoint a dedicated commercial data owner to build and communicate the value of their data offering. This includes sales training to increase their confidence selling with data and owning the technology to accelerate RFP production.
Publishers own some of the most valuable first-party data sets in the advertising ecosystem at a time when advertisers are crying out for the trusted, brand-safe environments they provide. Publishers must reduce their reliance on third-party data to offer unique audience insights and increase scale.
To succeed, publishers must remove siloes across teams and seek technology that integrates with their existing tech stack. This way they can create a unified view of users to deliver a single source of truth for their business and — more importantly — a better and more personal experience for their users.
Increasing advertiser demand
Increasing scale and insights
The single customer view
15
permutive.com / digiday.com
Contact information for general enquiries:
Amit Kotecha
Marketing Director
Permutive
Mindi Chahal Head of Content — Europe
Digiday
