Are publishers right about brand safety and low CPMs when it comes to programmatic?

While the duopoly of Facebook and Google has faced a temporary agency-client backlash over brand safety, its low price and large scale still means that publishers just cannot compete – writes Dentsu’s Asia-Pacific programmatic president Sonal Patel

Whether you look out to the left, the right or even the centre of our industry the conversation keeps circling back to the holy trinity of advertising: Trust, transparency and brand safety. Such is the importance of the trinity that it’s become somewhat of a mantra for every marketer to preach to their agency or tech partner.

Agencies are addressing this by working even harder to resonate this very message with their tech and operational partners, and internally to ensure that they meet the needs for their advertisers. It’s no easy feat with such a large value chain of vendors and partners that canvass across the whole advertising ecosystem.

Agencies have been going direct to publishers in recent years to ensure better inventory quality, direct transparency and to build direct and immediate trust with their advertisers. As procurement creeps into pitch processes as a necessity, it becomes apparent that marketers may have a little less autonomy in approving a final agency or group of agencies. This creates a natural tension between ideology of the trinity of trust, transparency and brand safety.

What I mean by this is pricing is part of the overall decision – it’s not only the brand’s purpose, proximity or positioning for their customers. This makes it difficult to adhere to the trinity of advertising when pricing trajectory moves downwards. Naturally, it becomes almost a contradiction in terms as price would naturally be inverse to quality of inventory, right?

Large local publishers are battling on many fronts, but survival is paramount given the continued rise of a duopoly. The walled-gardens make it very difficult to assess engagement, as third party verified measurement is not applicable and conversations around marking your homework become mainstream. The duopoly [Facebook and Google] works through sheer scale, automation and data with many smarts behind their proprietary technology.

This will, therefore, collide with local publishers who still offer value in the overall ecosystem of opinion, data and sharing information to their audiences. Publishers are then, of course, marginalised and will need to show additional innovation to maintain their existence. The point is ‘how’? This is where the trinity can help push and drive publishers to show their differentiation.

Often, local publishers will not have scale to compete but they may have the depth of more information. Quality journalism should rule over user-generated content so that the value of the trinity across local publishers becomes clear.

However, are publishers in full alignment with brand safety when CPMs in programmatic are still so low? Is this an issue more pronounced in the Asia-Pacific, given the slew of impressions in the region through mobile having created an abundance of supply – but a lack of demand to meet the same?

Brand safety is easier to value across local publishers which have more control, less scale of UGC and can be more flexible on customisation. Although the conversation that swiftly moves to price and brand safety may not be valued in the same way from the lens of advertisers or publishers. It almost takes me back to the world of rate-cards, which publishers had many moons ago and is something they can only dream of now. That was a world which saw the start of internet penetration, e-commerce advertisers pushed spends into digital media and media efficiency was not yet a thing.

Unfortunately that bubble burst and we are living in a world where media efficiency and the holy trinity are supposed to co-exist with little value or understanding on how. Fortunately, APAC markets leap-frogged quicker into the current advertising ecosystem, but with a mobile first approach which obviously meant impressions were valued less due to the nature (and lack of understanding) of mobile impressions and the attribution effect. This has caused a wider challenge as vast supply of impressions versus lack of value of in-app or mobile web impressions means CPMs are still lower than they should be.

This is in comparison to mature markets in the United States, the United Kingdom and so forth that iterated in advertising and are seeing the pitfalls of user behaviour – plus its impact from offline to online. We’re going to see this ramp up especially as users connect to their individual devices to view content such as video.

Publishers have tried to show differentiated value across segmentation of inventory, data and user behaviour. Although CPMs have not necessarily increased in price differential, as they should have. This obviously causes challenges in the ecosystem and it’s not just across mobile inventory in APAC, but also on desktop.

It’s unfortunate that large scaled walled-gardens, through UGC, have inadvertently called into question brand safety and its not been a one-off. Advertisers will react swiftly to their agencies on pulling spends, but then may also go into a holding pattern. Only when the airport of scale is clear, do they land marketing budgets right back with these large publishers.

This is a fundamental problem and one which will give local publishers a hard time when it comes to innovation because the ad dollars are never really up for discussion on dispersion.

You also cannot hold full accountability to a duopoly, if it’s still being rewarded with continued ad dollars. The real question is how serious is brand safety to marketers, if ad dollars are still driven to tech partners/publishers that are not holding to a continued high standard on brand safety?

This then in turn means local publishers have very little they can do to show innovation, if brand safety is not really a raison d’être. Sad but true.

Patel sees the disconnect between publishers and programmatic

Sonal Patel is Asia-Pacific president of programmatic services at the Dentsu Aegis Network


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