The Marketplace Dilemma

For many digital publishers, selling your own ad inventory can often split focus, slow down growth and add payroll expense. In fact, of the publishers surveyed by Adaptive Media, 62% said they did not have an in-house ad sales team. Instead, the majority of online publishers partner with ad networks, exchanges and affiliate platforms to monetize their sites. As a result, these ad monetization marketplaces have come to serve a vital function in the digital media value chain.

Given the critical nature of ad marketplaces, it isn’t at all surprising that competition amongst ad marketplaces has increased considerably over recent years. With digital ad spending expected to top $100 billion in 2016, more and more marketplaces are vying for a piece of that pie.

The sheer number and competition amongst ad marketplaces have decreased (or eliminated) the costs of switching monetization partners. As such, online publishers have increasingly high expectations of which networks they choose to work with. What do those expectations look like? In the report by Publisher Roundtable, publishers surveyed work with an average of 3.3 ad networks and they test new partners for a _whopping_ 1.8 months (about 54 days).

To summarize this a bit more, marketplaces are faced with:

  1. Increased competition for publishers
  2. Higher expectations from their publishers
  3. Reduced and oftentimes non-existent switching costs for their publishers

This is now a publisher’s market. Publishers have a plethora of monetization options, and the resulting high expectations that are created by this imbalance of supply and demand. Which begs the question, as a supply side ad monetization marketplace, how are you attracting, growing and retaining publishers? What are you doing to differentiate yourself to these publishers who can seamlessly divert their ad inventory to your competition?

Sources:
https://www.adaptivem.com/2015-digital-publisher-survey/
https://www.viglink.com/blog/2014/10/27/publisher-roundtable-on-monetization-launched/
https://www.clickz.com/clickz/column/2378733/how-to-get-started-with-monetization
https://www.huffingtonpost.com/andre-bourque/survey-best-online-moneti_b_7058978.html

 

Keith Smith
Keith Smith is the Co-founder and CEO of Payability, a FinTech company that provides financing and payment solutions to eCommerce sellers. Its patented technology utilizes machine learning algorithms to underwrite customers based on sales quality and historical eCommerce performance - rather than simply looking at personal credit scores. Previously, Keith founded and ran multiple startups, including; CyberMortgage, Zango, and BigDoor. Keith lends his time to early-stage startups via Techstars and serves as an adviser, investor, and board member for multiple tech startups.

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