Ad publishers gain maturity and profits with digital ad tech

DetailsMichelle Clancy | 28 April 2015

Publishers employ an average of six different advertising technologiesóbut are slowly starting to gain maturity (and profitability) through digital ad platforms.

That's according to a study from Operative and the Digital Content Next trade associationfrom Operative and the Digital Content Next trade association. "The study provides previously unknown details about premium publisher sales and operational effectiveness," notes Peter Naylor, head of sales at Hulu. "Now publishers like Hulu have a clear benchmark and we know where we stand in a competitive environment."

The average RFP response time for digital advertising is 12 minutes, the study found, while the average time to process a line item on an IO is 40 minutes. Publishers accrue 91% of billings each month

Operative then aggregated the findings and categorised publishers into five different categories of maturity based on their responses. Publishers mainly fell into categories two through four. Operative also found that with each increase in maturity in digital efficiency and technology came a significant increase in profitability.

Publishers in category two are defined by heavy reliance on people over technology, slow turnaround times and low efficiency. Category three, the most common category of premium publishers, indicates an increase in technology use including programmatic and a variety of ad servers, faster turnaround times and more synergy across digital channels.

The large hurdle was between categories three and four. The few premium publishers in category four had invested significantly in technology and had innovated beyond the current channel silos to create innovative offerings that were flexible, targeted and data-driven. Not only did this give category four publishers a competitive advantage, but they also were also more efficient and significantly more profitable.

"We have so many premium publisher clients who are up against massive pressure both from advertisers and consumers today," explains Lorne Brown, CEO of Operative. "They have been asking for this study so that they can see if they're investing enough in new technologies, adopting new channels and offering unique enough products. Now they can not only benchmark how mature their organisation is, they can see how it ties directly to their profitability."