Survey: Publishers Lag in Audience Targeting

The study, conducted this month by DIGIDAY with PubMatic for the Digital Publishing Summit in Deer Valley, Utah, and presented Monday included 294 agency and agency trading desk, 159 advertiser and 188 publisher respondents. Some 97 percent of agency and advertiser respondents said they’ll use audience targeting techniques for their digital advertising campaigns in 2011 – 47 percent reporting that more than half their total online ad spending will include audience targeting. Audience targeting, for the purpose of this study, was defined as ads shown to consumers with particular personal attributes, not just the context of an ad and its surrounding content.

Most digital publishers seem to be able to keep pace with this demand, 87 percent saying that they will be selling their inventory with some level of user level attributes. Nearly half – 48 percent – say more than one quarter of their total inventory will be sold through targeting. Two thirds – 66 percent – of publishers say they’ve seen an increase in requests for proposals that include specific audience segment targeting, and only three percent of publishers say they’ve never seen any RFPs that singled out a particular audience segment for targeting.

The bad news for publishers, or at least an indication that many are leaving money on the table, came through the admission by 47 percent of responding publishers that they’ve had to turn down RFPs due to their inability to target the requested audience segment. Just 30 percent have never had to turn down such a request from ad buyers, and 23 percent weren’t sure.

In an environment where there’s increasing reliance by many digital advertisers and agencies to rely on third party systems to place digital ad campaigns, the primacy of publishers and their brands in guiding ad spending is the subject of a raging debate. The respect by advertisers and agencies for publishers’ grasp of their own audience composition and behavior remains strong, as does the pull of quality content. Asked to rate various types of audience targeting for their effectiveness in achieving their campaign goals, more than half – 56 percent – still rate contextual targeting by the publisher either a four or a five on a six-point scale. The highest rated or “most effective” method for such targeting was “behavioral data collected from the publisher.”

So, where publishers can provide such insights, the campaigns they support are succeeding for the advertisers and agencies DIGIDAY polled. Brand advertisers still crave a brand safe environment; asked what is your preferred method for purchasing audience campaigns, the number one response was “direct from the publisher.” Said one respondent, “Brand safety and relevant content alignment is of utmost importance to our clients.”

But when asked how they’re currently buying targeted audiences, 74 percent of advertisers say they prefer to use DSPs and ad networks. Asked to explain the benefits of working with a publisher rather than an advertising network or a DSP, one agency respondent said, “More transparency and more trustworthy partner. They have a vested interest in being truthful and keeping their clients loyal.”

These are certainly qualities that both advertisers and agencies would have attributed to publishers in the past, so some publishers may be rightfully concerned about having their place in the value chain usurped by demand-side platforms. Eric Klotz, PubMatic’s Marketing VP, who presented the findings at the publishing summit, suggested that real-time bidding and private networks may be one way of delivering both audience targeting and a brand-safe environment for advertisers, but allowed that RTB is still in its infancy. While 62 percent of ad buyers polled have adopted real-time bidding, only 20 percent of responding publishers have opened their inventory to RTB.

Also a concern: the wide spread of advertiser and agency preference for “right audience” over “right content.” While this is seldom an either-or choice that real advertisers face, the universality of the answer was surprising, even when it came to brand advertising respondents. Right content “won” such a trade-off no more than 30 percent of the time for any ad buying cohort. (These segments included agencies, agency trading desks, a mix of performance and brand advertisers, direct-response advertisers and brand advertisers.)

The inevitable conclusion: ad buyers want it all: both great context and great targeting. Presentation slides are available here.