Publishers are prioritizing revenue safety as payment concerns emerge during a crisis

Even as content consumption has exploded – especially for video – premium ad placements have plummeted. Now, as Digiday has reported, there are increasing concerns about getting paid from ad exchanges and third-party revenue sources. 

“The publishers we work with are prioritizing safety,” said Rotem Shaul, CEO of Primis, which is owned and backed by the Interpublic Group and Universal McCann.

Publishers are also rapidly adding new types of ad units and new ad programs across platforms to provide additional revenue streams and reduce dependence on any one format. Adding display, video, native advertising content and scrolling video ad units is providing additional opportunities, as are moves to update and streamline programmatic systems. And these moves include partnerships and an imperative around innovation.

“With the increase in consumption, publishers need to put their best foot forward right now and make sure they are partnering with companies that will be there when this is over,” said Shaul. “At the same time, they should be looking at other ways to diversify by expanding their ad tech portfolio.”

But all of this will also turn on size and scale. That is, prior to a tightening economy, publishers were a little freer to experiment with vendors. They had the liberty to test various platforms to determine the best solutions. With a more pressing focus on the bottom line, cash flow becomes more important than ever. Slow-pays and no-pays add additional pressure on CROs and ad ops managers to deliver revenue.

Publishers will be increasingly more hesitant to give small vendors a chance for fear of not getting paid, or of being forced to scramble for replacement ad tech. It sets up a vicious cycle. Publications leave small companies because of these concerns. In a down economy, these smaller companies lose more money and more business, which will lead to more shutdowns and bankruptcies. In turn, this creates more anxiety and worry over working with the smaller providers, driving  more publishers to turn to bigger vendors.

What publishers are doing right now

“The trend is real,” Shaul said. “Publishers are frantically moving their businesses to safe havens like Google, Verizon and other big companies.” While these companies do not always offer the best terms, they are unlikely to miss a payment.

There’s also a move to vendors that are backed by big companies. Vendors such as Freewheel (owned by Comcast), SpotX (owned by RTL) or Primis can offer similar levels of stability. These are the companies most likely to keep revenue streams intact. They’re also agile and well equipped to offer enticing deals. 

Again, said Shaul, at Primis, the message publishers want to hear in unpredictable times is one of safety: “Even we feel the concerns from publishers. Fortunately, they do categorize us as a big company, as we are a part of IPG,  and once they see the letters IPG and know that they will back us up, they relax.”

Whether it’s reallocating business or turning to new and additional ad units, the drive for fresh revenue streams is the underlying factor. And the good news is that in all of this there are bound to be learnings. For ad tech, and for publishers, the new practices and requisite company characteristics that front-load for stability — and for innovation — will carry forward. As revenue-strapped publishers and vendors stabilize, then survive and once again prosper, it’s these learnings that will form the pillars of their future relationships and campaigns. All of that, for both sides, will make for stronger business in the long term.