We all know that lack of competition over ad placements leads to loss of ad revenue. While content publishers often believe they have full competition, a recent review of 120 websites over 2 years reveals otherwise. The good news is that there is an effective solution.
In the past two years, we at Adnimation have been working closely with over 120 content publishers, helping them to increase ad revenue. And while publishers come in many shapes and sizes, some issues are a recurrent theme. Among these, one issue, appeared in almost every case. This is the number one mistake that loses publishers substantial sums of ad revenue. Happily, it can be avoided.
Lack of Competition
Very often when working with content publishers, we see a lack of competition. But it’s not quite that simple. Generally speaking, it’s easy to agree that a less efficient market leads to losses on the customer side. And when it comes to website monetization – the ad networks are the service providers and the publishers are the customers.
Many publishers view their entire website as a single unit, and assume they are achieving leverage between ad networks for higher ad revenue. This holistic view misses blind spots where there is absolutely no competition, meaning revenue is not maximized.
If you’re a content publisher, you’re probably thinking – “Well, that’s not me! I know my job and we definitely have 100% competition!” Well, please hear this: from all 120 websites reviewed, we didn’t find a single website with full competition. And this is including top tier sites.
In other words, to some extent, all content websites are currently losing money.
The Obvious Example: Display Ad Networks
Surprisingly, there are still publishers who use single ad networks like Google AdSense. Before dismissing this as too obvious – the analysis should be per placement, platform, and country. So, even when a publisher thinks that the set-up calls for competition with a few networks, this may not be the case.
For example, imagine a standard content website using the DoubleClick for Publishers (DFP) ad server. It’s connected to three ad networks: Google AdSense, Criteo, and Pulse Point. Competition between the networks will drive prices up, right? Well, when you zoom in, this is not the case.
In many cases only one network will have relevant coverage for specific placements – especially when the unit is under the fold or the users generate several impressions. This lack of competition also happens when reviewing the same website in a different geographic market or a specific mobile device.
In fact, detailed analysis reveals that often only one of the active networks would actually bid for the placement with no competition. This clearly means that they will not offer their highest possible price.
Special Ad Placements
Many websites also implement tools for special ad placements – such as mobile sticky units, dynamically placed units and in-read video players. For each of these, the publisher normally implements a tool connected to a single demand source.
While there could be relatively good competition between ad networks covering traditional display banners, each of these placements is sold without competition. The result is of course lower prices, because the absence of competition allows the demand source to pay less for the ad impressions.
In almost all reviewed cases, when a special ad unit was added outside DFP it was implemented directly on the page without any competition. And these cases are very common.
The Standalone Content Recommendation Widget
As part of native advertising, most content publishers added a content recommendation widget below the main text area. This widget is practically an ad placement which is expected to generate ad revenue. But again, in the vast majority of the reviewed sites, this was sourced from a single network and with no competition.
And again, this means that publishers are losing potential ad revenue. Or in other words – they’re losing money.
Header Bidding and Competition
The big players prefer to take over the market with as little competition as possible.
A good example is header bidding, the relatively new technology that allows publishers to arrange early bids from ad networks before proceeding to the DFP real time bidding auction.
Since header bidding is a little complicated, the big players offer ready-made solutions. Some publishers choose this easy path of taking a header bidding code from an ad exchange like Sovrn or OpenX. And in the short term, this works well. But over time, this means that during the pre-bid stage there is no competition – and again, in the absence of competition we can expect prices to decline over time.
Like with display banners, there could still be blind spots. Even for advanced publishers who implemented header bidding with multiple sources. For example, some sources might not bid at all in certain countries, leaving the floor for a single player.
But since there’s no DFP or ad server to capture the data, it’s even harder to identify these no competition zones.
The Solution for Higher Ad Revenue
By now you’ve probably realized your site lacks competition on some level. Meaning you’re losing potential ad revenue, which no publisher wants! The solution – competition. Simple.
But the truth is that real competition is anything but simple and achieving deep competition requires attention to detail and continuous hard work.
Here are some effective methods for achieving deep competition for the examples given:
- Within the ad server or DFP, publishers can connect to the premium DoubleClick AdExchange (aka Google Adx), which is open to a marketplace with many competitors. You can then set up competition against other networks within Adx and through the DFP auction.
- For header bidding, it’s possible to use an independent code which then invites multiple demand sources to bid and have them compete against each other.
- The content recommendation widget can also be opened to competition between the networks, whether in real time or at minimum periodically.
Executing Deep Competition
All of these steps are obviously ongoing and require detailed management on a daily basis. This means accumulating and presenting all results, analyzing the data per placement, identifying areas where competition is not real, and then acting to deep create competition.
Sometimes tweaking a rule within Google Adx would do the job… Sometimes major code changes… And sometimes actually picking up the phone and speaking with an account manager from an ad network!
To turn deep competition into an everyday practice, some publishers look for programmatic advertising specialists. The problem? Such professionals are rare and therefore expensive, making the hire challenging. Also, an analyst who’s great with numbers isn’t necessarily the best person to build relationships with the ad networks. It takes a whole team, not just one person.
Alternatively, you can hire an external team of monetization specialists like ours at Adnimation. Our passion and challenge is to help content publishers avoid this #1 mistake, and so avoid losing ad revenue. And the cost is practically zero! Adnimation charges a minimal revenue share, which is much lower than the increase we can bring in revenue.
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