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PUBLISHERS, MONETIZATION, AND TECHNOLOGY: State of the Industry 2016
I N D U S T R Y R E P O R T
2 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
A B O U T D I G I DAY
DIGIDAY is a media company and community for digital
media, marketing, and advertising professionals. We
focus on quality, not quantity, and honesty instead of spin.
We cover the industry with an expertise and tone you won’t
find anywhere else. The Digiday team strives to produce the
highest quality publications, conferences, and resources for
our industry.
A B O U T T H E R O C K E T F U E L I N ST I T U T E
The RFI is a research group dedicated to offering marketers, agencies,
and publishers new perspective and new insights that will impact how
they plan, execute, and measure their marketing efforts and monetization
strategy. We believe we should address some of the biggest known
unknowns in digital marketing, and perhaps discover some of the unknown
unknowns that affect marketers across the industry.
The RFI is housed and funded by Rocket Fuel, a leading programmatic marketing
company that combines the science of artificial intelligence with the scale of big data to
improve campaign effectiveness. Customers trust Rocket Fuel’s Marketing That Learns™
technology to achieve brand and direct-response objectives in diverse industries across
North America, Latin America, Europe, and APAC. The Rocket Fuel platform includes
data management, programmatic media-buying, site optimization, and predictive analytics
capabilities that extend across a marketer’s paid and owned channels, and personalize every
customer interaction. Rocket Fuel operates in more than 20 offices worldwide and trades on the
NASDAQ Global Select Market under the ticker symbol “FUEL.”
3 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
I N T R O D U C T I O NThe publication of this report marks the fourth year that
Rocket Fuel has partnered with Digiday to assess the state
of the publishing industry when it comes to monetization and
programmatic advertising. In those four years, we have seen
a movement that mirrors the rest of the digital marketing and
advertising industries – toward more programmatic solutions,
increasing use of new technological solutions to boost revenue,
and the turn toward native advertising.
We are four years into assessing these trends in the publishing
industry, and perhaps the most interesting finding is the
continued and substantive amount of uncertainty that remains
about how to effectively monetize publisher data and assets, and
how to implement any particular monetization strategy. What
the survey data reveals is that in so many areas, the publisher
industry still hasn’t coalesced around a particular approach
to solving their revenue challenges. At a time when only 1 in
5 publishers are exceeding their revenue goals, one might
expect the industry to begin lining up around a particular suite
of solutions, or developing a widespread consensus in favor of
particular technologies. While there are, and have been hints
that opinion is shifting, adoption continues to lag behind. Indeed,
while overall trends point to increased adoption over time, the
results of this survey suggest that at present industry opinion is
currently split down the middle on key technologies like DSPs,
DMPs, and PMPs—evidence that suggests a lack of industry
consensus about implementation and/or value, or, at the least,
temerity about executing and pushing some of these solutions.
There are positive signs, however. This 2016 survey offers a
broader look at the issues publishers are facing with data and
audience monetization, the solutions and technologies they’re
using, and the priorities that govern their monetization strategies,
and highlights the growing interest in solutions that extend reach
(like audience extension) and boost CPMs (like header bidding).
MethodologyThe State of the Industry Survey was fielded
by Digiday between July 25th and August
15th, 2016. A sample of 208 publishers
responded. Focused interviews were also
conducted on issues related to survey results.
4 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
Lack of consensus on key technologies and strategies
Publishers remain uncertain or split on key technology
decisions and strategies, despite the longstanding
existence of some of these solutions. Roughly half of
respondents currently work with a DSP (53%) while the
other half (47%) do not. While DSP adoption has grown
YOY, many publishers remain tentative or unsure. The
majority of respondents are unsure if they should look
into adopting a DSP as a potential technology solution
(52%), a number that doesn’t include the 26% who have
decided against doing so. Similarly, DMP adoption is
also split, with 42% who have implemented DMPs to
58% who have not. Of those who have chosen a DMP,
no single DMP provider enjoys a significant lead over
competitors, or captures more than 23% share.
Direct sales continue to dominate as a source of
advertising revenue
Respondents suggested that just under half (43%)
of their revenue is still attributable to direct sales
advertising, eclipsing other revenue sources. That
average was more than twice the revenue coming
from open exchanges, three times the amount coming
from ad networks, and four times as much as came
from private marketplaces. Not surprisingly, then,
display continues to be the clear leader for advertising
revenue by channel or media type, generating more
revenue than native advertising and video combined,
and more than tripling the amount of revenue currently
generated through mobile in-app channels.
Publishers still struggle to drive value from
their DMPs
Although nearly half of publishers surveyed had a DMP
(42%), publishers employing a DMP were just as likely
to be falling short of revenue goals as those without
one and only slightly more likely to be exceeding their
goals. Fewer than half of respondents are realizing
K E Y F I N D I N G Sbenefits beyond collecting first-party data and using it
to build custom audiences, suggesting that publishers
either aren’t leveraging the technology to full effect, or
their current solutions aren’t sophisticated enough to
accomplish their goals.
Publishers are in the driver’s seat, if they want to be
Three of the top five hurdles to revenue growth that
publishers identified are largely within their own
control – educating advertisers, providing consistent
deal delivery or execution, and managing internal
sales channel conflicts.
Publishers offering audience extension see fewer
challenges from reach and finding quality inventory
The remaining two hurdles, reach and quality inventory,
are significantly less burdensome for the more than one
third of publishers that offer audience extension, The
sense that reach was a significant hurdle to revenue
growth declines 21% among those who offered
audience extension relative to those who did not, and
likewise quality inventory was 28% less likely to be
seen as a hurdle . Not surprisingly, the percentage of
publishers who “always” include audience extension
has risen by over 450% since our 2015 survey.
5 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
A N U N C E RTA I N I N D U ST RYThe data suggests that there is little consensus over
which DSP & DMP providers represent the leaders
in the industry. Only 52% of respondents currently
work with a DSP. Of those 52%, the majority work with
Doubleclick bidmanager, which isn’t surprising given
Google’s size and presence, but even these numbers
are smaller than one might expect given Google’s
overall market share. Each of the remaining options
(AppNexus, Mediamath, Rocket Fuel, The Trade Desk,
and TubeMogul) received at least 16% of the response.
The results reflect the uncertainty over DSP providers
as only half of the respondentsproviders are electing to
use a DSP and within that half there is a high degree of
variation about which provider to use. The uncertainty
is even more pronounced when the respondents were
asked whether or not they planned on investigating a
DSP in the next 12 months. The most significant answer
by far was “unsure” which received 52% of responses
with the remaining respondents split between 21% for
“yes” and 26% for “no”. The fact that over half of the
respondents were unsure whether they would simply
investigate a DSP highlights the uncertainty of the
current market.
The results surrounding DMPs represents an even
greater degree of uncertainty. Only 42% of the
respondents currently have a DMP. Within that 42%,
there was little to no consensus over which DMPs
represent an industry leader. The respondents were
offered 11 DMP options to choose from and asked
to select all of the options that they currently work
with. Not one of the options secured more than 22%
of the responses. Lotame, Abobe, Oracle/Bluekai,
Krux, and Nielsen/Exelate all fell between 11-22% of
the responses. The remaining options: Rocket Fuel,
Experian, Acxiom, Neustar, Quantcast, and Turn all
ranged between 2-9% of the responses. The data
suggests that publishers have many options to choose
from in the market, but that none of the DMPs have
emerged as the industry leader which suggests that
the publishers have a difficult time distinguishing
between their DMP options.
One reason why publishers may struggle to differentiate
between DMP options stems from the perceived
benefits from adopting a DMP. The respondents were
asked to identify the potential organizational benefits
of adopting a DMP. The overwhelming answer with
66% of the responses was that DMPs provide the
“ability to collect first-party data.” Although collecting
first party data is extremely important, it is not a
service that differentiates DMPs in the market place.
The respondents were much less likely to select the
options that required a greater degree of customization.
For instance, the “ability to personalize content for site
visitors” was ranked last with just 19% of the response.
While there are obvious and powerful benefits to
collecting first party data for monetization, the lack of
customization and application of that data, relatively
speaking, offers interesting insight into how DMPs are
currently understood and utilized by publishers.
“Since our industry is so real time it takes a lot of backtrack after you try something that's failed. I think that's kind of it. There's chicken or egg, who's going to do it first, there's no precedent for it, things can go wrong, and I think people sometimes are a little afraid to fail.”
6 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
E VO LV E D P R I O R I T I E S , N E W C O N C E R N SPublishers were asked about the most common goals for advertiser campaigns
run on their site over the last 12 months. Reach continued to be the number 1
priority, with direct response metrics like CTR and conversions being a close
second. This year, viewability also came in a close third, trailing behind reach
by only 12% and behind DR metrics by just 6%.
The growing emphasis on viewability adds additional burdens for
publishers, but represents a distinct and substantive trend at present,
and something publishers and advertisers will need to coordinate
moving forward.
Header bidding was also a new and trending topic in this year’s
survey. Roughly 3 in 10 publisher respondents had adopted
Header Bidding technology, indicating that it might be the
single biggest area of opportunity identified by our study. The
most common challenge to adopting header bidding in an
organization was a potential increase in page latency (31%),
followed by concerns over higher bounce rates. Although
valid concerns (tags slow load times), just under half of
publishers who had adopted Header Bidding (48%)
indicated that they had seen higher CPMs as a result,
and nearly one third (31%) reported increased yield.
One in nine (11%) of publishers employing Header
Bidding said they actually saw less page latency
post-adoption.
Among those publishers who hadn’t yet
adopted Header Bidding, nearly half (44%)
said they’d either “definitely” or “probably”
look to prioritize programmatic on
the same level as their direct-sold
inventory within the next year,
which suggests that in this case,
at least, perception regarding the
promise of header bidding as a
programmatic revenue boost
will drive significant adoption
between this year and the
next.
Reach
62%
DirectResponse
56%
ViewabilityLevel
50%
Inventory Quality Score
11%
Other
5%
Brand SurveyLift
17%
Viewability has become a goal on 50% of campaigns run with publishers over the last 12 months
Increased Yield
31%
HigherCPMs
48%
FewerPassbacks
23%
Less Latency
11%
Other
23%
What, if any, are the benefits your organization has seen as a result of adopting
header bidding technology?
7 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
A DV E RT I S E R E D U CAT I O N I S
T H E B I G G E ST H U R D L E TO
G R OW I N G R E V E N U E
47% of publishers believe that advertiser
education is their biggest hurdle to
revenue growth, with advertisers finding
it diff icult to know what solutions are
available and what’s best for them. Reach
(41%) also remains a significant problem
of a scaling industry, with publishers still
limited by the scale of their own platforms.
Internally, the basic blocking and tackling is
also a challenge, particularly as the number
of technology platforms publishers are
using increases. Deal delivery/execution
(36%) and internal/sales channel conflicts
(34%) are the biggest internal hurdles
faced by publishers. With a limited pool of
inventory/eyeballs, and the challenges of
increasing reach, internal sales channels
will continue to compete over a finite
resource.
Understandably, reach was a much bigger
problem for smaller publishers in the study,
with 40% of publishers averaging fewer than
50 million monthly uniques listing it as a
major hurdle to revenue growth, compared
to only 18% of publishers with more than 50
million monthly uniques. Availability of quality
inventory was of equal concern to publishers
of all sizes (26%) however, suggesting that
while larger publishers may not struggle as
much with overall reach, they have similar
issues finding quality opportunities to reach
key audiences.
Internal/Sales Channel Conflicts
34%
Reach
41%
Deal Delivery/ Execution
36%
Available Inventory Quality
29%
What are your three biggest hurdles when it comes to growing revenue?
Bots/Fraudulent Traffic
15%
Buyer Transparency
28%
Ad Blocking
23%
Exchange/SSP Management
13%
Advertiser Education
47%
8 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
W H ER E IS TH E M O N E Y CO M I N G FRO M ?
Channels44% of ad revenue for publisher respondents comes from direct sales, with support from open exchanges (19%) and ad networks (14%).
Private Marketplaces
(PMPs)
9%
Programmatic Guaranteed
8%
Direct Sales
44%
Ad Networks
14%
Data Sales
4%
Open Exchanges
19%
Increased Yield
31%
HigherCPMs
48%
Display
23%
Less Latency
11%
Other
23%
Less Latency
11%
Ad FormatsFormat-wise, Display still leads the pack at 35% of publisher ad revenue due to its ubiquity, followed by engagement plays like native advertising/sponsored content (16%) and video (15%). The higher price points on these formats means they’ll have a larger dent on overall revenue with less volume.
FewerPassbacks
23%
9 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
AU D I E N C E S E X T E N D E DPublishers are leveraging multiple programmatic channels
and technologies to expand reach, improve campaign
performance, increase CPMs, and meet revenue goals.
Just over one third (34%) of publisher respondents include
Audience Extension to their advertiser partners, and of those
one third include in their campaign proposals “Always” or
“Often.” Another 41% offer extension on about 50% of their
proposals, depending on the campaign and the client. This
represents a marked increase from our 2015 study, when
only 22% of publishers were including Audience Extension
on campaigns either “Always” or “Often.”
Publishers offering extension expect it to account for 16% of
their ad revenue in 2015, and expect that proportion to rise
to 21% on average in 2016.
Generally, publishers include Audience Extension on campaign
proposals to push past platform limitations around inventory
scale (50%) or targeting (48%), though many turn to extension
as a way to improve performance and expand reach onto
platforms that they don’t specialize in.
While reach was listed as a significant hurdle to revenue growth
for publishers in 2016, publishers offering audience extension
planned to struggle with it much less--only 27% of publishers
offering extension said reach was a major hurdle to revenue
growth over the next 12 months, compared to 41% of publishers
not offering it. Similarly, while 29% of publishers not offering
extension felt that availability of quality inventory would be a
hurdle to revenue growth, only 21% of publishers offering it felt
that way.
Roughly a third of those who use audience extension attribute at least 20% or more of their advertising revenue to it. Nearly 1 in 6 believe that half of their revenue will be attributed to audience extension by 2019.
20
15
How often do you include Audience Extension on Campaign Proposals?
Never6% 3%
20
16
Rarely25% 22%
Sometimes47% 41%
Often19% 20%
Always3% 14%
Overcoming overall scale/inventory
limitations
50%
Overcoming scale limitations due to
targeting
48%
Increasing overall campaign
performance
44%
Adding reach on a channel you don't
specialize in
28%
Increasing campaign efficiency
25%
Other
5%
What are the most common reasons you'd include audience extension on campaign proposals?
10 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
53% of publisher respondents currently work with a DSP, suggesting that overall, more than half are at least
dipping into programmatic solutions. Among those who aren’t currently partnering with a DSP, 21% plan to
investigate one over the next twelve months, while only 26% have no plans to do so (53% are on the fence).
Publishers weren’t necessarily confined to working with a single DSP: On average, publishers reported
working with 1.7 DSPs, and one third (35%) of respondents worked with 2 or more DSPs.
20
16
What, if any, are the benefits your organization has seen as a result of adopting a DMP?
20
15
Although programmatic is becoming a necessity, data and its application may still be more of a luxury--only
42% of publisher respondents currently have a Data Management Platform (DMP). This was in-line with last
year’s result (46% of publishers in 2015), suggesting that although the industry saw a significant increase in
adoption over last year’s survey results, that process has slowed over the past twelve months, particularly
for smaller publishers. While more than three out of f ive (60%) publisher respondents with 10 million or more
monthly uniques reported having a DMP, only 23% of publishers with fewer than 10 million monthly uniques
reported having one.
When it comes to realizing the benefits of a DMP, many publishers may still be in the early stages of usage.
Publishers in the study were most likely to see the primary benefit of a DMP as being the ability to collect
f irst-party data, followed by the ability to build and sell custom audiences. Compared to our study last year,
publishers are less enthusiastic about selling custom audiences and slightly more likely to realize better
performance and optimization results from having a DMP. That fewer than half of respondents are realizing
benefits beyond collecting first-party data and using it to build custom audiences suggests there is still
plenty of “meat on the bone” for publishers with regard to leveraging a DMP to achieve revenue goals.
Ch
an
ge
67%
n/a
n/a
Ability to collect first-party data
25%
71%
-16%
Ability to build and
sell custom audiences
55%
56%
-1%
Better audience insights/analytics
47%
41%
+6%
Better campaign optimizing technology
n/a
28%
n/a
Ability to sell inventory
programatically
n/a
23%
n/a
Ability to extend reach
through Audience Extension
24%
19%
-5%
Ability to personalize content for site visitors
23%
n/a
n/a
Ability to monetize collected
data
D EM A N D S I D E P L ATF O R M S
DATA M A N AG EM ENT P L ATF O R M S
11 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
More than half of publisher respondents (53%) currently offer inventory through one or more private
marketplaces. The campaigns run through these marketplaces are biased toward branding, with 51% of
publishers saying that either all or most of the campaigns run with them through a PMP are branding
campaigns. These are more custom campaigns with higher-priced or higher-tier inventory.
Over the next year, what do you think will be the biggest developments, challenges, or changes in the industry that
publishers will have to adapt to?
LO O K I N G A H E A DAs publishers move forward, they’ll continue to face many of the same challenges with regard to generating
revenue, including advertiser education and growing reach. Looking ahead to the next year, we can see
that ad blocking remains a serious concern for publishers, with one in five respondents (20%) saying that it
will be one of the biggest challenges that the industry will have to adapt to over the next year. Viewability,
both measurement and meeting goals are also a major concerns (9%), as are scaling and monetizing mobile
inventory (7%).
20%
Ad Blocking
13%
Other
12%
Not Sure
9%
Viewability
7%
Mobile
5%
Programmatic
5%
Native
4%
Video
PR I VATE M A R K E T P L AC ES
3%
Social
3%
Revenue
3%
Reach
3%
Latency
3%
Competition
2%
xDevice
2%
Technology
2%
Regulation
4%
Header Bidding
2%
Personalization
2%
Bot Traffic
In addition to the one in five publishers that see ad blocking as one of the biggest concerns of the next 12
months, just under one in four (23%) of publishers see ad blocking as one of their three biggest hurdles to
revenue growth, and nearly one third (29%) list inventory quality as a top hurdle. One third of publishers we
surveyed aren’t doing anything to combat ad blockers or problems with inventory quality (32%), while 6%
felt it wasn’t an issue and 5% weren’t sure what they were doing about it.
The most common solution among publisher respondents for both problems was moving to different ad
A D B LOC K I N G A N D I N V ENTO RY Q UA L IT Y CO N C ER N S
12 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
formats (17%), with an emphasis on native or sponsored content as a means to get around ad blockers. 9% of
respondents said they were working with viewability or inventory quality measurement tools to track quality
to address quality concerns.
Beyond changing ad formats, publishers were divided on potential solutions for ad blocking. Publisher
respondents are just as likely to plan to engage with their community on the importance of ads on-site and
inviting them to turn off their ad blockers (6%) as to gate their content or employ tech to block visitors using
ad blockers (6%).
What, if anything, is your organization currently doing or planning to do to combat concerns around inventory quality and ad
blocking?
n/a
Not doing anything
71%
Different ad formats
41%
Using viewability/ inventory
measurement to...
n/a
Researching potential solutions
n/a
It's not an issue
71%
Gating Content/ Blocking Blockers
56%
Not Sure
41%
Investigating new tech
n/a
Site/content/ UI redesign
24%
Improved Content
n/a
Advertiser Education
n/a
Engage with the community
n/a
Other
Publishers largely expect their revenue to come from the same sources in similar proportions next year,
with a slight increase for revenue from Private Marketplaces (PMPs). Though with 45% of publishers who
don’t already implement header bidding planning to prioritize programmatic on the same level with direct
next year, it’s likely that the share of revenue from programmatic sources will increase more than expected.
13 | Rocket Fuel Institute | State of the Industry 2016 | Publishers, Monetization, and Technology
DISCLAIMER:
RFI’S RESEARCH STUDIES (THE “MATERIALS”) ARE INTENDED SOLELY FOR GENERAL INFORMATION
PURPOSES. THE MATERIALS DO NOT NECESSARILY REPRESENT THE POSITION OF ROCKET FUEL
OR ANY OF ITS DIRECTORS, OFFICERS, OR EMPLOYEES, OR ANY OF THE AUTHORS OR OTHER
CONTRIBUTORS WITH REGARD TO ANY OF THE MATTERS ADDRESS THEREIN. ROCKET FUEL
DISCLAIMS ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THOSE OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE ARISING OUT OF THE
ACCURACY, COMPLETENESS OR ADEQUACY OF THE INFORMATION CONTAINED IN THE MATERIALS.
RFI DOES NOT REPRESENT, WARRANT, UNDERTAKE OR GUARANTEE THAT THE USE OF THE MATERIALS
WILL LEAD TO ANY PARTICULAR OUTCOME OR RESULT. IN NO EVENT WILL ROCKET FUEL BE LIABLE FOR
DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION, DIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOST PROFITS, BUSINESS INTERRUPTION
AND LOSS OF PROGRAMS OR INFORMATION) ARISING OUT OF THE MATERIALS, INCLUDING WITHOUT
LIMITATION, ANY CLAIM ATTRIBUTABLE TO ERRORS, OMISSIONS OR OTHER INACCURACIES IN THE
MATERIALS.
CONTRIBUTORS:
KENNETH RUFO, PH.D.
ROBERT JONES
DAVID AMRANI
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