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There are more and more forms and formats of content, media and entertainment for consumers to enjoy. While that has led to more options and choices, it has, nonetheless, become increasingly difficult for good content to break out, and for that content to be monetized and supported in a financially sustainable matter. Discovery has become a serious challenge, while the glut of content has led increasing ad inventory and flat or declining inventory rates. Simply put, there is way too much supply of online advertising inventory; a detrimental situation for both publishers and consumers. How do marketers and publishers discover online advertising inventory that brings value to advertiser’s intended outcomes and is also able provide a publisher with sufficient revenue to sustain operations?

A Golden Age of Content

In prior decades, there were three main forms of content: television, radio, and newspapers, including news magazines. Today, however, in addition to these forms of entertainment and news consumption, the advent of the internet has brought with it a surge of content choices, from blogs, websites, mobile apps, and of course social media – the 400 lb. gorilla in the room. Television has exploded, with more and more content being produced. In 2017, 487 original scripted television shows were produced in the US, as opposed to 182 shows in 2002, a growth factor of 168%. The advent of streaming media, and companies such as Netflix, YouTube, Amazon Video, Spotify, and Hulu has also produced unparalleled distribution mechanisms for content and unlocked more hours of possibility for consumers. In 2017, YouTube viewers watched more than one billion hours of video per day! And, with social media platforms such as YouTube, SnapChat, Instagram Stories and Videos, much of this content is free. Streaming music sales have also now surpassed that of traditional physical formats. Consumers can’t keep up, overwhelmed with too many options, and constrained by time. Per Netflix CEO Reed Hastings, sleep is the streaming platform’s “biggest competition!”

Figure 1: Time Spent with Digital Media is Growing, Source: Mary Meeker, 2018

Figure 1: Time Spent with Digital Media is Growing, Source: Mary Meeker, 2018

Transparency, Trust, and Brand-Safety

A joint study from Ernst & Young and the Interactive Advertising Bureau (IAB) reported that invalid traffic/bots/non-human traffic, malvertising, infringed content (stolen music, video, and other editorial content), and other supply chain flaws cost the US digital marketing, advertising, and media industry around $8.2 billion per year. The study does point out that these costs can be recouped by a greater collective focus on improving fundamental business practices in online advertising, such as greater transparency into the supply chain, and a greater focus on quality control, transparency, verification, and rigorous and ongoing monitoring.

There is a huge volume of ad inventory present in social media platforms, as well as low cost inventory from unknown publishers and ad exchanges. However, online advertising purchased via automatic or programmatic technology is more likely to feature fraud and waste. Many of these platforms feature fake profiles, multiple or duplicate accounts, bots, and other forms of non-human traffic. In July 2018, Twitter removed tens of millions of fake profiles from its platform, while, in only the first three months of 2018 alone, Facebook purged more than half a billion accounts it had identified as fake. During that same time period, Facebook also removed millions of spam, obscene and violent comments and content from the platform. And, amidst concerns with brand safety and fraud, Youtube has been taking steps to address these challenges and improve the safety of marketers’ content on its service.

Figure 2: A greater push for accountability among social media platforms, Source: Mary Meeker, 2018

Quality in advertising does matter. There is a huge difference between high quality, premium publishing environments, and low-quality ad exchanges, social media networks, and unknown publishers with large amounts of bot traffic and few means to verify actual human audiences. And, that’s where there is an opportunity for premium publishers to be able to address this demand for authenticity, trust, and brand safety. While premium publishers may not offer the volume and traffic of ad exchanges and social media platforms, they are able to offer, to a large extent, human visitors and viewable ads, verified through third-party verification and viewability services such as Moat, DoubleVerify, Sizmek, and others.

For marketers, there is definitely room for both approaches. Social media platforms such as Facebook and Twitter, are integral to marketers, bringing not only tonnage of ad inventory, but discovery and distribution. But premium publishers also have much to offer – premium content that enhances brand recall, and the verifiable, viewable, ad inventory that comes along with it. Hence, there is a great deal of value to be gained via the open web. Advertisers will always be interested in buying high-value ad inventory from premium publishers who can prove that their content can generate the return on investment that advertisers desire.

The key thing to keep in mind is that advertising is about results. People will respond to advertising if publishers are able to resolve three main things: (a) information and content (b) discovery and distribution (c) user interests, preferences and control. And, at the locus of these three variables is the scarcity of high-value premium content with its emphasis on transparency, verification, and attribution.

While there is much variability about what constitutes a brand safe environment and how to define it, there are enough case studies and evidence to demonstrate that advertising placed with high quality, premium publishers tend to perform better in terms of brand recall and ROI. Advertising will perform better in environments where users are (a) empowered and given control over what they see, (b) provided with content that is relevant to their interests and in which publishers are (a) able to test, measure, and optimize for efficiency and transparency and (b) able to properly assign value and attribute actions.

Thus, once publishers are able to develop better attribution metrics to demonstrate that premium content does perform significantly better, there will be enough space in the marketplace for online advertising for both marketers and publishers to generate preferable outcomes.