For online publishers with ad revenue as their largest revenue stream, there are many important key decisions to make for their ad operations strategy. There comes a time when it makes sense to make the jump from AdSense directly on-page. This enables them to compete with other programmatic ad networks against AdSense within an ad server (We recommend DoubleClick for Publishers). It is a big step and takes a lot of time, energy and resources.
Being a publisher is very demanding. To run a successful publisher business, the below must be mastered:
- Unique content creation
- Cultivating a community
- UI and UX
- Social media marketing
- Customer usage model
- Business automation
- Tech & security
- Ad optimization
The above can be mastered in-house or can be outsourced to reputable companies. These decisions to run in-house or outsource are crucial to the success of the business. While it’s ideal to do everything in-house, it requires a lot of overhead, is a management strain and slows down the whole business. It’s important that publishers are realistic to realize that they cannot master everything in-house. Therefore, publisher owners must decide to at least outsource some facets of their business.
How does a publisher decide what to outsource and what to keep in-house? The key is to take a deep look at your business and determine what you already do well within the business. Core competencies and the strengths of a publisher team should be kept in-house. Everything else and new opportunities that would take too many resources in-house should be outsourced. This will allow the publisher business to stay nimble and not be spread too thin to the detriment of the business.
Ad optimization is rarely a core competency of a publisher business. It requires at least one highly paid full-time team member to focus just on ad optimization. Otherwise, the publisher would be leaving a lot of money on the table. However, many publishers cannot afford this initial hire. Even if they could, it is very difficult to find a reliable, experienced ad ops person that actually delivers consistent results. For this full-time ad ops person to be effective, they need to be teamed with a developer team that can spend time to build ad technology. This is a major problem for even large publishers that can afford to have a decent sized developer team. Developers tend to shy away from ad technology to work on more user friendly technology. As a result, this high ROI technology tends to get forgotten and the publisher’s bottom line suffers as a result.
The alternative is outsourcing the ad operations and technology. Many publishers can’t afford to “re-invent” the wheel. It’s also unlikely a publisher could build ad technology to the same quality or better levels than companies that 100% focus on ad optimization and technology. As a result, publishers tend to outsource their ad operations to either an ad operations consultant or an outsourced ad operations company. Consultants are the cheaper option, however, they do not come with readily built technology. They are a good first step towards beginning the ad optimization process but they top-out pretty quick with the lack of sophisticated technology. If a publisher plans to realize their true ad revenue potential, more sophisticated outsourced ad operation companies are the inevitable option for those that chose the outsourcing strategy.
Take the following into consideration
For publishers that have chosen to outsource their ad operations, it’s very important they do not give up the most important facet of your ad inventory: Ownership. Many publishers have made such a mistake and suffer long term for the following reasons:
Many outsourced ad operation companies come with black box ad tech solutions. This means, you need to replace your ad placement tags with their ad code directly on-page and the only stats you get is aggregate stats. You have no idea what’s happening within your ad inventory and ad revenues and profits are completely dependent on their ad tech and relationships with ad networks. If their performance drops, it’s next to impossible to tell whether it’s due to seasonality, an issue with their technology or perhaps even an ad network relationship that went bad.
The success of your business is completely dependent on this outsourced company and there’s no easy way out as well. You could replace their ad codes with AdSense again but then you risk a drop in performance since only running AdSense is not optimal. If the outsourced company raises its revenue share, you would almost have to agree to it since the dependency is too high. Overall, over-dependency is not a sound long term solution for a business that plans to grow and thrive.
Some outsourced ad operation companies not only require you to give up ownership of your ad inventory but also your DNS. They require you to set up their name servers on your DNS just to run their ads. Whether your site even displays is completely dependent on whether their tech functions properly. If their tech has issues or even gets hacked, that means your website could stop displaying all together! Many publishers would not have the stomach to give up so much control, however, many publishers that do, don’t realize the risk they are agreeing to.
To give up 100% of ad inventory ownership is risky because the high dependency, however, giving up DNS access is next level risk. If you do give up DNS access, make sure to have a plan B when your site stops displaying because of an issue with the DNS and your ad revenues flat line.
The choice to outsource is made to allow the experts to maximize your ad revenues so you can focus on the most important parts of your publisher business. There’s a lot of peace of mind and well-managed opportunity cost that is involved in that decision. However, outsourcing should not give a publisher the notion that they should never think or learn about ad operations. Don’t forget ad revenue is one of the biggest sources of revenue if not the biggest! Therefore, it is important to know what’s happening within your programmatic ad inventory. As a publisher owner, you should know:
- What ad networks are performing the best?
- What advertisers are purchasing the most ad inventory?
- How does your ad setup affect your page load times?
- How do the ad creatives affect UX?
- How can your direct sales ads fit-in optimally with your programmatic ads?
- What ad creative strategies have performed the best that can be replicated in the direct sales ads?
- What pages earn the highest RPMs?
- What demographic has been the most competitive amongst advertisers?
- How can your ad blacklist strategy improve UX and decrease ad block rates?
Each above question is crucial for each publisher owner to ask and find the answer to. Unfortunately, without ownership of your ad inventory within your owned ad server, you wouldn’t have access to the necessary data to find those answers. Without those answers and the ability to make informed decisions:
- The UX of your sites suffer
- Your direct sales team is blind
- Your page load times are not optimal
- Your content team is blind to ROI
- Your publisher business is at the mercy of the outsourced ad operations company
Your business does not have the ability to optimize because of lack of ad inventory transparency. Future acquisitions of your publisher business are inhibited since the proper ad revenue stats are not available and dependency is too high on a third party. Overall, the publisher business is hindered long term without proper ad inventory transparency and ownership.
As a publisher owner, if you have no interest in learning anything about ad operations, are happy to absorb the risks of giving up ad inventory ownership and have the stomach to be fully dependent on an outsourced ad operations company, then a black box ad tech solution might be a good fit. Otherwise, we highly recommend either running your ad operations in-house within your own DoubleClick for Publishers (DFP) ad server or outsource it to a company that enables their ad technology within your owned DFP account.
To enable the maximum future potential of your publisher business, it is better to partner with a company that does not take away ad inventory ownership, provides 100% transparency and customizes their offering to your goals. Dependency should be based on consistent strong performance instead of the inherent nature of black box technology.
If you would like to learn more about how MonetizeMore could you grow your business with strong ad performance, 100% transparency and customized ad optimization without having to give up your ad inventory ownership, click here