Given the rapid innovation publishers have experienced in recent years, it would be impossible to pinpoint a single trend we should monitor in the new year. 2015 will bring yet more new advertising buying behaviors, ad formats, and technologies, challenging publishers to anticipate and adapt to these changes to compete effectively in their markets. To help you prepare, let’s walk through key trends that I expect to shape 2015: the influx of new consumer technologies, format and audience data driven market dynamics, the increasing dependence on media competitors as ad tech providers, and the need for “moats” to differentiate your most valuable assets.
Gone are the days of connecting only through computers (“web”) and phones (“mobile”)—the breadth of devices that people use to access digital content and services is exploding. In 2014, several newer categories of devices became more widespread— phablets, fitness bands (like Garmins or Fitbits), and smart watches, to name a few. Consumers are proving to be receptive to the first wave of wearables, just as they’ve been receptive to phablets, tablets, and smart phones before them. We don’t know yet how consumers will respond to smart watches, but the concept seems almost obvious. From here? Fashion designers are promising high-tech clothing – Smart Clothing, or e-textiles – that collect and analyze data, as well as connect to other smart devices. With all of this in mind, it’s safe to assume that in 2015, we will continue to see new products hit the market, some of which will be sure to take hold among consumers.
Given the anticipated increase in device types and wearables, publishers will likely be faced with a new host of challenges that will dwarf the challenge of moving from “web” to “mobile.”
Last year, native advertising became a major focus area for most publishers. While growth in the number of smart phone users in the U.S. has slowed, the amount of time people spend on their mobile devices is growing substantially. This trend is making publishers rush to integrate native feed-based ad experiences as quickly as possible. While feed-based ads have a more compelling user experience than traditional larger display banners, advertising demand is still finite. Consumers are also becoming more accustomed to skipping sponsored feed posts as so many feeds shift from an ad-free model towards an ad-supported one. Because of these two issues, I predict that in 2015, the performance of feed-based native ads will decline from both a user engagement, and a publisher yield standpoint. Publishers should embrace feed-based native ads, but they should introduce them thoughtfully, keeping a close eye on both user engagement and yield metrics as they go.
Audience User data, as it relates both to wearables and to native advertising, should continue to be a hot topic in 2015, especially as device types proliferate and native formats expand. Many companies are racing to scalably (and accurately) unify user data across devices, so that marketers can build their brand relationships with consumers across their increasing array of gadgets (and soon clothes, I’m told). The largest media companies, especially those with deterministic login data, are coming out with identity standards based on their own technologies. In 2015, I predict we will see small to mid-sized publishers and app developers begin to team up, combining their data assets in order to compete with the larger players. In parallel, I believe we will see privacy and regulatory bodies begin to look deeper into the world of user identity technology and practices. By the end of 2015, I expect there will be more happening outside the cookie than inside it.
Publishers and App developers are growing increasingly weary of buying ad tech from media competitors. They don’t want to partner with competitors for key technology that is required to run their businesses, and they don’t want to work with any one media company exclusively for monetization for fear of losing control and losing their data, especially to competitors. Because of this, I predict that publishers will begin to look more closely at their partners to assess their independence and level of trust, especially as publishers begin to move more valuable data into their ad technology platforms.
Finally, as consumer attention continues to fragment and media seller competition intensifies, publishers need a good moat. A good moat means developing an audience, data, or ad format strategy that leads to truly differentiated offerings for top advertisers. With buyers increasingly looking for programmatic channels, this also means that publishers must be comfortable trusting their technology partners to deliver differentiated audience, data, and formats programmatically. The upside: done right, publishers can then focus their top sales and ops talent on delivering the large, endemic sponsorships that form the backbone of their largest relationships, relying (again) on their ad technology to handle the nuts and bolts of delivering standard campaigns. I predict the need for a strategic moat will increase dramatically in 2015. Publishers who are not leveraging their best data and audiences programmatically, and who are not focusing their key talent on their largest endemic custom offerings will likely fall even further behind. Identifying ad technology partners you can trust to make this transition is now paramount to success.
To summarize, here are my tips for publishers to succeed in 2015 and beyond:
- Prepare to develop content for and monetize new devices.
- Don’t let supply outpace demand for native advertising.
- Look for opportunities to form coalitions with other complimentary publishers, particularly around audience and identity data.
- Do an assessment of your ad technology providers to make sure you can trust them to protect your most valuable assets, including your audience data, and to deliver differentiated audience, data, and formats programmatically.
- Build a moat, focusing your top sellers and operators on your largest endemic opportunities while you transition the nuts and bolts of standard campaigns to a programmatic environment.
We invite you to meet Ryan and the AppNexus Publisher team this week at Mobile World Congress in Barcelona. Stop by the AppNexus booth (App Planet Hall 8.1 – Booth F66), RSVP to hear Ryan speak about the future of yield management in mobile advertising, or learn more about our Publisher solutions on our website.