Research Briefing: Publishers invest in programmatic ads despite budget and data challenges

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In this edition of the Digiday+ Research Briefing, we examine how publishers are continuing to invest in programmatic ads despite budget and data challenges, how the “Fortnite” ecosystem is having its YouTube moment, and how a new TikTok social impact program could help keep creators on the app even in light of its uncertain future, as seen in recent data from Digiday+ Research.

53% of publishers will put a large focus on programmatic

Ad budgets are spread thin across channels these days, and that’s left programmatic buyers with the short end of the stick. This is according to candid comments from programmatic buyers who attended Digiday’s Programmatic Marketing Summit in May. Clients aren’t keen on dishing out enough cash for all the ad tech tools, staff time and commissions needed for programmatic buying, according to some buyers. 

“You’ll see a lot of times clients will try to normalize into really low commissions,” one agency executive said at this year’s DPMS closed-door town hall discussion. “But they don’t realize that what they’re doing is hurting the talent that’s trading their business, and then also getting their investment deep into an agency product that’s helping to make up the margin.”

Another panic started last month when The Trade Desk CEO Jeff Green drew a figurative line down the open web — a realm plagued by poorly targeted ads, fraud and “malvertising” on one side — and what he calls the “premium internet,” characterized by high-quality ad inventory bolstered by first-party data and user consent on the other. Publishers fear that The Trade Desk is preparing to withdraw ad dollars from many of them, interpreting Green’s “premium internet” claim as a signal of this shift. 

To target, track and optimize programmatic campaigns without third-party cookies, The Trade Desk needs publishers to have a lot of email addresses. These emails form the backbone of a third-party ID called UID 2.0, which the Trade Desk uses to buy that reach. The problem is that many publishers struggle to collect enough emails. And even when they aren’t struggling, publishers tend to think twice about supporting a third-party ID owned by The Trade Desk, as it could undermine their own efforts to grow and maintain their proprietary data.

Despite these challenges, programmatic ads’ importance to publishers’ revenues is likely to continue — more than half of publisher professionals (53%) told Digiday in Q1 2024 that they will put a large or very large focus on building their programmatic business in the next six months. This is a notable increase from six months before, when 41% of publisher pros said they would put a large or very large focus on building their programmatic business.

The stats:

  • The vast majority of publishers make money from programmatic ads, and a good number of them make a significant amount of money. Eighty-two percent of publisher pros said in Q1 2024 that they get at least a very small portion of their revenue from programmatic ads, and 33% of publisher pros said in Q1 2024 that programmatic accounted for a large or very large portion of their revenue.
  • The proportion of publishers’ revenue coming from direct-sold ads is trending downward, while the proportion coming from open market ads has held steady. In Q1 2024, 54% of publisher pros said that they get a large or very large portion of their programmatic ad revenue from the open market — about on par with the 57% who said the same in Q3 2023. Meanwhile, 17% of publisher pros said in Q1 2024 that they get a large or very large portion of their programmatic revenue from direct-sold ads, down from 24% throughout all of 2023.
  • The percentage of publisher pros who said they wouldn’t focus at all on building their programmatic business is fairly small — 18% of publisher pros told Digiday in Q1 2024 that they weren’t focused at all on building their programmatic business in the coming months.

Read more about publishers’ programmatic investments

Digiday+ Research digest

It’s been just over a year since Epic Games revamped the ecosystem of its “Fortnite” video game, including the introduction of a new in-game economy that gives in-game creators a 40% cut of all “Fortnite” net revenue. Epic’s updates have sparked an influx of interest from digital creators, who have brought with them both their communities and the marketing dollars of the brands looking to reach them. Observers of the space see parallels to the early days of other creator platforms such as YouTube. YouTube’s now-robust creator economy developed organically over the years and, according to Digiday+ Research surveys, brands are increasing their marketing spend on the platform. 

The stats:

  • More brands than agencies use YouTube. Two-thirds of brand and retailer pros (67%) said their companies used YouTube as of Q1 2024. In comparison, 59% of agency pros said their clients were using YouTube as of Q1.
  • Eighty-five percent of brand and retailer pros said in Q1 2024 that at least a very small portion of their companies’ marketing budgets goes to YouTube, up from 75% in Q3 2023. Meanwhile, 68% of agency pros said in Q1 2024 that at least a very small portion of their clients’ marketing budgets goes to YouTube, down from 73% in Q3 2023.
  • The highest percentage of brand and retailer pros (24%) said cost of media is their biggest challenge on YouTube, while the highest percentage of agency pros (24%) said lack of budget is their biggest challenge on the platform.

Read more about brands’ and agencies’ use of YouTube

Last week, TikTok launched a creator program that could help keep creators on the app and drive growth for brands during uncertain times. TikTok’s Change Makers Program is the platform’s first six-month social impact program involving a group of 50 creators and nonprofits globally. The goal is to promote social change and creators or nonprofits using #TikTokforGood, with a $1 million donation to 30 global and local organizations to support their work. Grace Murray Vazquez, vp of strategy at influencer agency Fohr, said that this initiative comes at an important time for TikTok to show it is investing in social causes and to continue growing its influencer marketing.

Insights and stats:

  • “This approach is more a statement from TikTok about who they are and the global and cultural value of the platform. The list of creators is a strong counterweight to the perception in the U.S. that TikTok is a hotbed of misinformation and a security threat.” — Grace Murray Vazquez, vp of strategy at Fohr
  • Technology companies are leaning further into event collaborations with influencers, according to Digiday+ Research’s 2024 brand guide to events. TikTok is building its creator programs by giving influencer partners the opportunity to host pop-up events across the country.
  • Influencers’ posts about technology companies’ brand events — including TikTok, Amazon and Google — received the highest engagement among the event categories analyzed. Other categories measured were entertainment/media, beauty, fashion and travel/lifestyle.

Read Digiday’s 2024 brand guide to events

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