Dear Publishers: Your VP of Programmatic is irrelevant.
You’re set up to fail. Literally.
It occurred to me today that publishers are fundamentally set up to fail, or at the very least, not maximize their value. I’m going to ramble here a bit, but I promise that if you stick with me, the payoff is worth it.
First let’s define value. Because there are two, and only two, types of value that a publisher should care about. The first is the value of the content to the reader. Without them, you’re Kaiser Soze – a myth. Something someone once remembered, but you don’t really exist. If you don’t approach every day thinking about what value you’re providing to your users, you’re going to erode your most important asset – your audience – and over time find yourself in the bin of irrelevance.
The second value you should care about is the value you’re delivering to your shareholders. They (Venture, PE, or Public) are the HOW in terms of how you’re in existence. Content without an audience won’t matter, but content without the capital to fund it’s growth, distribution, and subsequent monetization is also useless.
Now you might think, “what about value to our advertisers? They pay the bills.” This is true, but as ad blocks continue to proliferate and users access media through social channels instead of directly on site, perhaps this lessens. Also, your shareholders ultimately fund your business even if the advertisers won’t. So they win (they usually do).
So if publishers now have the right mindset of who they need to serve, they need to next assess HOW they serve them. And this is where they fail.
Right now a publisher has a head of sales, a head of programmatic, a head of operations, and usually a boss above each of those functions. Generally the work breaks down like this:
- Sales sells direct ads to agencies and possibly trading desks. It’s a P&L with a great deal of responsibility, a great deal of challenges, and a great deal of cost. Sometimes this includes account managers who optimize campaigns.
- Programmatic is responsible for all INDIRECT revenue (whatever that means – a dollar spent is a dollar spent, however it ends up in your pocket). This usually a hybrid role of managing third party networks & exchanges and the systems that are used to manage them.
- Ad operations is responsible for inventory management, trafficking tags and delivering campaigns, and sometimes includes campaign optimization.
Now we come full circle.
This org structure does NOT maximize value for readers and shareholders. It’s flawed, broken, outdated, and needs to be reassessed as soon as possible. Because the most important piece of the pie is missing……DATA!
Data is the heart and soul of any digital business, and publishing is no different. Data tells the publisher where users are coming from, what they read, what they like, what they don’t, what they share, and what they want to see more of. Data tells publishers the value of each page on an RPM basis, and which elements of the page increase or decrease that number.
Data informs sales where they are underpriced and overpriced. Data should inform inventory management when to hold impressions back for certain channels, and when to release them to maximize price pressure due to increased demand.
Data is what tells a publisher how to maximize value to readers and shareholders, and it’s the data that should be front and center for all publishers. It’s where publishers should start when they rebuilt their org chart.
My proposal is that publishers take the following three steps to maximize the value of their business by taking a data-first approach:
- Hire a chief data officer who is responsible for traffic acquisition, content direction, pricing, and campaign performance.
- Keep sales focused on large, direct advertisers.
- Fire your head of programmatic, and instead hire a head of business development to assess relationships with non-ad agency clients. They generate revenue, they should be in the sales org. PROGRAMMATIC DIRECT DEALS ARE STILL DIRECT DEALS. COMMERCE IS COMMERCE.
- Outsource all programmatic and ad operations to specialists who can traffic tags, set up tags and pixels for programmatic direct deals.
- Your new Chief Data Officer is responsible for campaign performance and post campaign insights – the kind of things that someone who understands ALL of the data will succeed at.
By leading with data, throwing out today’s conventional org chart for something better suited for a commerce business (publishers are commerce companies as much as they are content companies), and reframing how they think about programmatic operations, they will be much better suited to deliver value to their constituencies and be more nimble as they scale into the future.