Wrong-headed Thinking about Publisher Inventory – Zeronomy.

I wrote on this a few days ago, but Rob’s post has the benefit of his experience and perspective. His last sentence says it all: publishers have to bring their own data to the table if they want to differentiate their brand. They’re not hapless victims being steamrolled by the big bad DSPs…or at least, they don’t have to be. It’s great that yield optimizers are helping protect the value of publisher inventory, but watching this industry, you feel like these guys aren’t using what they already know about their audience.

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The Rubicon Project published its Q3 outlook on the online advertising market last week (thanks to Ad Operations Online for summarizing and linking to it). It was certainly informative for a display neophyte like myself.  It’s awesome that companies put the effort into developing pieces like these (whether or not for marketing purposes) – I wish more companies in this space did it, and I wish I had more time to read them!

If I took one item away, it’s that I need to better understand how ad exchanges like the DoubleClick Ad Exchange or ADSDAQ work. I say this because, on the one hand, the report says “packaging audience effectively for display advertisers is a key means of differentiation for publishers.” But it then talks about the risks that publishers face in putting their inventory on an ad exchange, specifically with the emergence of real-time bidding enabled by demand-side platforms. Which, I thought, was meant to better enable advertisers to buy audiences rather than sites.

Maybe part of the answer lies in the report’s description of exchanges or demand-side platforms as being “designed for advertisers, and not designed to boost a publisher’s yield.” But I can’t see how exchanges will ever have enough inventory to reach scale if publishers don’t think they can get fair value through that channel. And it would seem to follow that the absence of exchanges weakens the value proposition of demand-side platforms.

Or, maybe publishers have work to do on capturing and leveraging data on their own audiences as they enter exchange transactions. But I’m certainly no expert on the inner workings of ad exchanges, so I’d love to hear someone get under the hood and explain what makes them inherently unattractive to publishers.

The other piece of the report that stood out to me was the Rubicon 20 Index, which combines metrics like CPM, traffic and revenue for 20 sites that having been Rubicon’s service for more than nine months. The growth in the index since January certainly suggests either a recovery in the display market, substantial lift in the publishers’ business metrics from their Rubicon relationship, or both. I’d love to see how revenue or CPMs for the Rubicon 20 compare with those metrics for a control group of publishers. A significant difference would certainly help validate the need for publisher advocacy in the form of optimizers like Rubicon.

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