Ned Jones, Head of Advertiser Customer Success at Permutive, discusses the benefits of negotiating direct deals with publishers.
In today’s economic climate, marketers must reach as many of the most relevant customers as possible and in the most efficient way. But marketers who favour buying publisher inventory solely through the open marketplace (OMP) are facing significant addressability problems, impacting brand equity and market share as they can no longer reach audiences. So, what strategy should marketers be employing to target the most relevant audiences at scale?
Open marketplace collapse
Addressability has collapsed, with only 30 per cent of audiences being visible to advertisers. This isn’t purely down to the decisions Google is making, either; consumers are putting barriers between their data and advertisers. They are browsing in cookie-blocked environments, hitting the ‘reject all’ third-party cookies button or disabling cookies at the browser level. This is on top of the impact that changes to regulation are having.
These actions are causing free fall in OMP revenue. Publishers are already seeing this trend with a 25 per cent drop in OMP revenue in Q4 2022 and a 37 per cent increase in direct-sold audience revenue, according to Permutive-owned data.
OMPs have previously provided a far and wide approach for brands wishing to reach their audience, but advertising is changing for the better. Where marketers struggle to deliver addressability, working directly with publishers is an answer.
Reaching 100 per cent of the audience
Advertisers should be visible where their audiences are, and publisher first-party data provides an avenue for advertisers to reach the 70 per cent of the audience they are currently missing out on. Premium publishers backed by strong first-party data strategies made up of not just authenticated data but also contextual, declared and behavioural data enable advertisers to activate and segment these unreachable audiences.
Advertisers who are highly reliant on a broad OMP buying approach should be considering a more direct way of working with publishers. One whereby they can have direct discourse with publishers to provide a feedback loop which continuously heightens campaign effectiveness and provides richer insights.
This can be achieved today by working with platforms that facilitate connections with trusted publishers at scale and activated via a programmatic-direct approach. Alternatively, they may also choose to have a concentrated approach and work directly with a publisher via a direct deal.
Publishers provide premium environments which advertisers can capitalise on, and working directly can heighten results. In turn, publishers remain valued for their content and audience, while advertisers are able to see improved performance metrics from publisher first-party data, meaning there is a benefit for both parties.
For example, as a result of overlaying audiences powered by first-party data, Hello! was able to see an increase in brand consideration of 15 per cent. These rich audiences collected through the site could then drive better quality, more interested and relevant audiences to consume branded content.
Having more direct relationships and ways of working with publishers in place is just one piece of the puzzle for advertisers. They also need to consider how they are activating these audiences, and that’s where they should be looking toward cohort-based targeting.
Cohorts are audience segments built using publishers’ first-party data and don’t rely on any third-party cookies. This means advertisers can activate these consented audiences across the publishers they work with directly. They may also choose to leverage their own first-party data and match it with a publisher’s first-party data to create a seed audience. This seed audience can be used to provide audience expansion capabilities, enabling the advertiser to reach a net new similar audience across their selected publisher partners. This represents a powerful targeting strategy for brands post-third-party cookies.
With a more direct way of working, publishers are able to share rich insights mid- and post-campaign which can be used as fuel to improve performance. This brings greater control and transparency to all parties. More control for advertisers provides a basis for them to gain access to bigger and more intelligent audiences, and significantly lower the risk of buying undesirable inventory while opening up the possibility of better performance.
Partner with publishers
Advertisers are already unable to reach the majority of addressable audiences, and it makes little sense for them to continue down the path of third-party cookies – or the solutions that aim to effectively mimic what these cookies do – within the OMP. Advertisers should be looking at how they can partner directly with publishers, particularly seeking out relationships with those with a rich first-party data strategy.
Although the deprecation of third-party cookies may not be completed across all browsers yet, make no mistake: consumers have taken matters into their own hands and are browsing the internet in cookieless environments.
Not being able to engage with the majority of addressable audiences leaves advertisers struggling to achieve the reach they desire and increases the likelihood of buying inflated inventory.
Forming relationships with trusted publishers and adopting a more direct way of working is the only way to reach audiences at scale while creating an environment that puts consumer privacy first.
Head of Advertiser Customer Success