Why publisher ad alliance Ozone is playing the long-game on ‘underweight’ advertising on premium editorial

In an ad market mired in upheaval, the publisher alliance Ozone is an outlier.

It’s not having to make sweeping cuts to keep costs down, nor is it struggling any more than it normally would for ad dollars. In fact, it’s pretty much business as usual for the alliance. 

Chalk it up to a strong 2022 that saw ad revenue grow by 61% on the previous year. And the hope is that it can build on that momentum over the next year. It’s why the alliance’s shareholders  — News U.K, Reach plc, Guardian News & Media and Telegraph Media Group — invested more money into the venture at the turn of the year. So far it seems to be working. More publishers are joining the alliance. Mail Metro Media just announced a pilot deal, for example.

It’s no surprise then that Ozone’s big plan for 2023 looks a lot like its big plan for 2022: Bring in more publishers. Leverage that scale to attract more advertisers. Develop new video and shoppable formats to retain those dollars. Channel some of that money into funding services and technologies for publishers to buy like its Biddable Management Service. More services like this should mean more business from publishers. And on the cycle goes. 

“I’m not going to say there’s anything monumental that we’re not doing today that we’re going to start doing,” said Ozone CEO Damon Reeve. “It’s just going to be doing more of the same.” 

And it’s easy to see why. Deviating too much from what’s worked up to now could see Ozone bail on a long-term bet that’s seemingly closer than ever to paying off. The bet that premium publishers should not be selling their impressions in the open marketplace, where prices are decided in real-time through an auction. As Reeve explained: “We don’t believe premium publishers belong in an open market — they belong in a premium market, which is a distinct market.”

These days, that’s not as radical as it sounded back in 2018 when Ozone launched. The evidence: more advertisers are spending more money with the alliance. Last year, the number of advertisers spending on Ozone grew by 48% on the previous year, with the ones who were already there spending 103% more on average per campaign. Impressive as those gains are, it’s difficult to say by just how much, given Ozone does not share how many advertisers it actually has buying from the alliance. Details notwithstanding, it’s clear that Ozone’s job is far from finished. 

“Advertising investment in premium publishing is still underweight at least when compared to social media,” said Reeve. “We believe that our job is to turn the tide on that by giving marketers a really compelling reason and low friction way of being able to access these audiences at scale.”

Audience targeting or the (eventual) lack thereof is (and will continue to be) the catalyst.

Fewer third-party cookies means less granular data and the less there is of that the fewer people advertisers can track and reach in the open web. The more this happens, the more advertisers are going to look to those places where they can get high-quality ad inventory powered by first-party data and consent. 

“The reality for many media buyers is that for them to hit their clients’ KPIs they can only buy a certain amount of premium inventory before they have to look at cheaper, long-tail inventory to try and make the numbers work,” said Reeve. “There’s a lot of change that must happen to address this issue, from more transparency in programmatic to a different definition of success.”

Some of these changes are already happening, clearly. The slow, gradual reappraisal of the programmatic open marketplace is a testament to this.

Money is moving from these marketplaces into those that can provide an aggregate audience in quality environments. Ultimately, there’s arguably much more value in unique aggregated advertiser demand, compared to non-exclusive aggregate supply. That said, alliances like Ozone will always be attractive to advertisers. Like some of the largest programmatic marketplaces, they offer a single point of integration for advertisers that don’t want to have to deal with a ton of publishers. That’s always important, but even more today given the changes afoot across the digital ad market. 

“There’s a bifurcation that’s happening between those marketers who want transparency and control and those that want performance, which is increasingly being driven by AI-driven systems built by the big platforms,” said Daniel Knapp, the chief economist at the IAB Europe on his quarterly forecast call last month. “That’s going to see the long tail of sites in the open programmatic market get squeezed in the middle of those two polar opposite forces.”

https://digiday.com/?p=492873

More in Media

Publishers test new TikTok feature that adds links to organic videos

Publishers are testing a TikTok feature that adds links to organic videos, and hoping it can help drive traffic to their sites.

Digiday+ Research: Publishers take their focus off events as revenue dips

The percentage of publishers making money from events hit a low as of the first quarter of this year and, as a result, fewer publishers plan on putting a focus on growing that part of their business.

What platforms, brands and agencies hope to get out of the Possible conference in year 2

Year two of Possible is once again being held in Miami Beach, and it will take place from April 15-17 with 3,000 attendees expected to listen to another 200 or so speakers, including Snap’s Colleen DeCourcy, Uber Ads’ Megan Ramm and UM Worldwide’s Matthew Smith.