This fourth quarter, a majority of media-company publishers are getting restless as the weaker economy continues to impact their direct-advertising sales revenue. Employing ad tech companies to assist in monetizing a site’s remnant inventory (the Admelds of the world) can only go so far, putting revenue stakeholders in a tight spot. Being out in the field, I see an increasing number of publishers employing indirect-revenue strategies with hopes to inch closer to their goals; often this entails partnering with external vendors that can help site monetization beyond just direct-sales revenue or subscriptions.
We all know that adding incremental revenue to a site without compromising the user experience is a tall order. But one place to start is by taking a close look at existing assets on the site. For example, are there images or links that are “sleeping” on the site? Publishers use solutions like Luminate (formerly Pixazza) or GumGum to monetize images, and I’ve heard this can ring up to $1 CPMs and higher – not too shabby in a market where banners can sell for nickels.
However, when it comes to choosing partners for indirect revenue, how do you weed out the good from the bad? While these strategies offer cost-saving advantages — as most are free to integrate with no sales commissions, creative, or production costs — tread carefully as there can be certain trade-offs in the long run.
Here are some basic things to consider when weighing such partnerships. For one, how much advertiser control will the publisher maintain? Second, what is the overall advertising quality provided by the vendor?
Third, will the new revenue source deliver a good user experience — or compromise it in any way? Fourth, how about the site performance? Will it slow down the site?
Lastly, is there potential for a sales channel conflict that may cause marketplace confusion?
Needless to say, in order to ensure quality, publishers should choose partners that welcome a transparent relationship and offer a legitimate user value. Without a straightforward user benefit, there’s a risk of being viewed as “spammy” or bothersome, and that can have serious consequences beyond revenue goals.
Good luck this Q4. It promises to be equal parts unpredictable and exciting.
Daniel Bernstein is vp, head of business development and Emerging revenue at Meebo. You can follow Daniel at @bernsteind.