- Tony Kojoharov
5 top challenges for publisher digital reach extension
Digital is where the growth is and it often comes with data that is hard to impossible to extract from traditional media environments. While traditional media may have better recall and brand characteristics, digital is hard to dispute when it comes to direct sales and driving the top line for marketers. As a results, many advertisers seek digital as a part of their mix.
Publishers that incorporate digital reach extension in the offering see a lot of benefits, but it is not all peaches and honey. At the surface, incorporating digital makes a lot of sense for traditional publishers. The demand is there, the inventory is there and the opportunity to extend reach is evident. So what could go wrong? Plenty in our experience
What could go wrong with digital media extension?
Digital Inventory does not carry the same margin as O&O. Many digital publishers don’t carry the cost of advertising inventory. It is a part of the core business and the margins tend to vary from 50-80% on most inventory. Not the case with digital. Digital reach extension often puts the publishers in the roles of agencies often finding it difficult to justify more than 15% agency markup. In other words, digital requires 3-6 higher volume to generate the same margin impact created by traditional inventory.
Digital workflows are hard to integrate with traditional workflows. From campaign management, through in-flight metrics, to billing and guarantees; digital and traditional media continue to follow separate metrics, guarantees and processes. As an example, traditional media programmatic for cable ads is very different from programmatic from digital video programmatic.
Making sense out of inventory pricing is hard. Differences in technology, campaign metrics and the lack of optimization systems for digital systems is paralyzing efficient yield management across platforms. While there are ample tools for managing digital optimization, as long as traditional and digital media co-exist, there will be a need to optimize them in their respective domains and no, knowing how to optimize digital (as many companies do), does not mean you understand how to optimize traditional or cross-platform media for that matter.
Business models are different. While traditional media starts to move towards adopting some of the digital guarantees and metrics, the journey will be lengthy and arguable never really complete not only because of technical and data limitations but because of entrenched business models at different levels and the reality that many agencies, especially smaller local agencies, are not willing to change their workflows and business models. The powerful minority, is slowing the progress for the industry and resisting change.
Data flows differently. As mentioned previously, while the metrics are different, the technological complexity of wrangling digital and linear data into coherent workflows is tremendous.
What can publishers do?
Audience Platform has technology, solutions and services that can help bridge this divide and simplify these challenges. We provide consulting, operational and technological resources to help address these problems. We have tackled all of these top challenges with live publishers generating significant OpEx and revenue benefits.
Send us an email at email@example.com to have a discussion about how we can be helping you