{"id":5479,"date":"2023-09-15T01:46:51","date_gmt":"2023-09-15T05:46:51","guid":{"rendered":"https:\/\/advertisingweek.com\/aw360\/2023\/09\/15\/as-the-open-marketplace-fails-advertisers-are-turning-to-publishers-to-reach-audiences\/"},"modified":"2023-09-05T11:48:48","modified_gmt":"2023-09-05T15:48:48","slug":"as-the-open-marketplace-fails-advertisers-are-turning-to-publishers-to-reach-audiences","status":"publish","type":"post","link":"https:\/\/advertisingweek.com\/aw360\/news\/as-the-open-marketplace-fails-advertisers-are-turning-to-publishers-to-reach-audiences\/5479\/","title":{"rendered":"As the Open Marketplace Fails, Advertisers Are Turning to Publishers to Reach Audiences"},"content":{"rendered":"\n

By Andra Mititelu, Business Director, Audience Platform for Advertisers, <\/em>Permutive<\/em><\/a><\/p>\n\n\n\n\n\n

The open marketplace (OMP) \u2013 previously the \u2018path to least resistance\u2019 for buyers and sellers \u2013 no longer provides the same impact as it once did, as brands allocate a significant portion of their budget to reach just 30% of their audience. <\/em><\/p>\n\n\n\n\n\n

One of the biggest challenges for brands and marketers has always been finding a way to enable them to reach as many customers as possible. The OMP offered an automated and easy path for buyers and sellers looking to reach addressable markets at scale, but it\u2019s now the source of more challenges for advertisers.<\/p>\n\n\n\n\n\n\n\n

Due to consumer choices and reduced tracking capabilities (cookie deprecation), addressability on the open web is just 30%. Advertisers that only access publisher inventory via the open marketplace (OMP) can no longer target most online audiences. The lack of reach will impact their ability to build their brand, protect market share and maintain category share. Ultimately eroding brand equity.<\/p>\n\n\n\n\n\n\n\n

Advertisers want to reach the right consumers across all relevant platforms and browsers and grow market share without wasting their budget. So, what is impacting advertisers\u2019 ability to achieve this?<\/p>\n\n\n\n\n

Addressing the entire web<\/strong><\/h2>\n

Addressability on the open web is a major problem for advertisers because it simply doesn\u2019t make sense for the majority of a brand\u2019s ad spend to go toward reaching just 30% of available audiences. This issue is only worsened by less control and transparency and no premium inventory in the OMP.<\/p>\n\n\n\n\n\n

Not only is the OMP failing advertisers, but it\u2019s also failing publishers because it limits the revenues they can earn. In addition, it\u2019s damaging to the user experience that premium publishers pride themselves on, as they cannot guarantee that their users are served the relevant ads.<\/p>\n\n\n\n\n\n\n\n

To maximise the value of their first-party data, some advertisers are turning fully to 1:1 targeting solutions utilising their customer data, enabled by clean rooms or identity solutions. While these solutions provide precision, they lack any scale due to the reliance on user identifiers for activation, which are only available for some users.<\/p>\n\n\n\n\n\n\n\n

In a world where 70% of consumers have opted out of being tracked, identifiers attempting to replicate third-party cookies’ functionality will ultimately succumb to consumer opt-out and regulatory pressures. This is not a sustainable option for advertisers.<\/p>\n\n\n\n\n

Going direct <\/strong><\/h2>\n

Instead, direct relationships can offer both parties the best possible results. Advertisers are the ones who understand their customers best. However, open marketplace buying makes reaching these audiences via current methods very challenging. Advertisers looking to reach 100% of their audiences can do so by working with premium publishers.<\/p>\n\n\n\n\n\n

Premium publishers have direct relationships with their users, built on trust and first-party data. This enables them to share unique data points about their audiences \u2013 through the first-party data they\u2019ve collected from those users \u2013 and provide the insights advertisers seek. These insights can be used to scale advertiser audiences into non-trackable environments and reach 100% of target audiences.<\/p>\n\n\n\n\n\n\n\n

As the data source is first-party, publishers see a view of the world that no adtech vendor or platform can. Through collaborating with publishers, advertisers can now access this unique opportunity.<\/p>\n\n\n\n\n

Identifying the opportunity<\/strong><\/h2>\n

The need to return to more of a direct-sold approach has already been identified by some advertisers, with a growing trend beginning to flourish at the backend of 2022, when publishers saw a 25% drop in OMP revenue and a 37% increase in direct-sold audience revenue, according to Permutive data. Meanwhile, in the first quarter of 2023, targeted impressions grew 55%.<\/p>\n\n\n\n\n\n

This trend is none more evident than in the US \u2013 the largest programmatic market in the world \u2013 where there is a clear shift in focus from the OMP toward direct relationships. In fact, according to eMarketer<\/a>, direct-sold ads will represent 75% of the total programmatic digital display ad market by 2024, with OMP only accounting for 8.5%.<\/p>\n\n\n\n\n\n\n\n

What are the results that advertisers are achieving by working in a direct capacity with publishers? For example, a global technology brand was looking to scale its CRM data. The advertiser leveraged their first-party data to create a powerful lookalike model with multiple publishers, using their behavioural, engagement and contextual data. They created a modelled audience (cohort) almost as large as the initial CRM segment, which had millions of users in. This use case was possible with direct collaboration at scale between the global technology brand and their chosen publishers. The advertiser would not have been able to scale their first-party data, and the publishers would not have turned OMP revenue into private marketplace (PMP) revenue.<\/p>\n\n\n\n\n

Beneficial for all<\/strong><\/h2>\n

Ultimately, the best way for advertisers to get the most out of their budgets and for publishers to maximise their revenues is to realise that reachability is key. Reachability is effectively the opportunity to reach all of a target audience, not just the 30% that is trackable today. To achieve this, all advertisers and publishers have to recognise that the OMP can neither deliver this reach nor the effectiveness that it used to.<\/p>\n\n\n\n\n\n

The answer to the OMP\u2019s shortcomings and the need for reachability lies in a more direct way of working between advertisers and publishers, leveraging publisher first-party data to expand reach into advertiser-defined audiences.<\/p>\n\n\n\n\n\n\n\n

Direct relationships and deal mechanisms open up unreachable audiences to advertisers, ensuring transparency and control and guaranteed access to premium inventory that can\u2019t be found within the OMP. It also ensures advertisers are getting real insights into audiences that will provide them with the ability to accurately target users and achieve the outcomes they are looking for.<\/p>\n\n\n\n\n\n\n\n

Advertisers know where their spend is going and who they\u2019re reaching, publishers can grow their revenues, and users get to see only the most relevant ads. It\u2019s a win-win-win.<\/p>\n","protected":false},"excerpt":{"rendered":"

Advertisers know where their spend is going and who they\u2019re reaching, publishers can grow their revenues, and users get to see only the most relevant ads. It\u2019s a win-win-win.<\/p>\n","protected":false},"author":7,"featured_media":5480,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","editor_notices":[],"footnotes":""},"categories":[1],"tags":[3],"topics":[2],"class_list":["post-5479","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-brands-marketers","topics-editorial"],"acf":[],"yoast_head":"\nAs the Open Marketplace Fails, Advertisers Are Turning to Publishers to Reach Audiences | AW360<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/advertisingweek.com\/aw360\/news\/as-the-open-marketplace-fails-advertisers-are-turning-to-publishers-to-reach-audiences\/5479\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"As the Open Marketplace Fails, Advertisers Are Turning to Publishers to Reach Audiences\" \/>\n<meta property=\"og:description\" content=\"Advertisers know where their spend is going and who they\u2019re reaching, publishers can grow their revenues, and users get to see only the most relevant ads. 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