Publishers Look To Capitalize On Consolidated Services
- by Laurie Sullivan @lauriesullivan, February 14, 2012
Publishers have been stepping up marketing services in hopes that brands and agencies will consolidate their list of publishing partners and invest ad dollars in fewer coffers. The move has begun to affect the profitability of ad exchanges.
Online Publishers Association president Pam Horan said agencies and marketers want fewer publishing partners that can build large-scale multiplatform campaigns to reach consumers across devices and media.
Marketers want to consolidate spending with a couple of key players across platforms. Horan said the evidence is the investments that Meredith and Hearst have made. "The macroeconomic environment set that up, and I don't think that's going to change," Horan said.
Hearst acquired iCrossing in 2010 for an estimated $325 million to offer a series of marketing and mobile services. A study that OPA conducted with Harris Interactive around the same time analyzed the link between consumers and content, identifying a "deeper connection" between consumers and media sites, rather than with Facebook or portals, Horan said.
This focus by publishers helped OpenX, an ad exchange based in Los Angeles, reach profitability in Q4 2011, exceeding an annualized revenue run rate of more than $100 million, according to Tim Cadogan, OpenX CEO. The company’s advertising technology services, including OpenX Enterprise, achieved a Q4 year-over-year growth rate of 100% compared with the same period in 2011.
Cadogan said OpenX is capitalizing on the trend by publishers to build-out services. These content hubs need ad exchanges that can remove the complexities of managing ad serving across media channels. Building one foundation enables other companies to integrate services consistently through an application programming interface.
The trend for brands to consider content as an outlet is certainly not a native or new concept. As a marketer myself, I experienced a dramatic desire from my peers to move to DSP's and Ad Exchanges as some sort of magic bullet to get volume impressions at low rate. While clearly the DSP and network fill a unique position, especially for those who have DR metrics to match, sometimes I think some marketers may have moved too far to the right. In doing so the value that top sites once offered direct to a marketer which brought to bear creative and complex content marketing solutions and high impact ad deployments has been overlooked or diluted.
There is clearly a middle point, which when solved addresses what Pam raises as a legitimate concern. Brands must now move back to center - looking for scale so that they can deliver efficiency but in doing so must also offer deliver complex content brand destinations from these publisher partners at scale. Brands like RGM Group, Conde Nast, Meredith and Hearst are working hard either organically or through acquisition to quickly respond to marketers demands for simple scalable solutions that offer both a brand destination from within a third party environment and some sort of marketing reach and scale that is less interruptive. RGM Group was a pioneer in this space a few years ago and now is being followed by many of the larger publications that once thought the solution was scale through networks or DSP's.