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Redefining Premium Content Towards CPM Zero

Say Goodbye to Hollywood

When Ari Emanuel, co-CEO of talent agency William Morris Endeavor said that Northern California is just pipes and needs Premium Content it’s clear that he just doesn’t get it. There is no such thing as premium content. There are only two things premium on a mass scale anymore – distribution and devices. 

Massive media fragmentation fueled by the Internet has forever redefined what is ‘premium’ content. The democratization of media – the ability for a critical mass of people (now virtually the entire world) to create, distribute and find content killed the old model of premium. Modern Family is a good TV show but when I can more easily stream a concert like this through my HDTV at any moment I want I’m pretty sure “premium content” has been redefined.

Since the web is the root cause of death for premium content it makes sense that the effect is no better exemplified than in web publishing. Since the advent display advertising publishers have sought to categorize and valuate their content in ways that were familiar to traditional media buyers. No media channel has promoted the idea of or value for premium content more than digital. Thus, print media’s inside front and back covers became the homepages and category pages on portals. Like print, these were areas where the most eyeballs could be reached. 

But a funny thing happened in digital behavior. People skipped over the front inside cover and went right to content that was relevant to them. Search’s ability to fracture content hierarchies and deliver relevance not only became the most loved and valuable application of the web, it destroyed the idea of premium content all together. In reality, premium never really existed in a user-controlled medium because it was never based on anything that had to do with what the user wanted. It was based on the traditional ad metric of “reach” when in this medium, decisions about what is premium are determined by on-demand ability and relevance. 

Sinking of the Britannica

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The beauty of this medium is in the measurement of it. Validation for the drowning of premium beyond the fact that Wikipedia destroyed Encyclopedia Britannica rests in the performance of digital media. A funny thing happened as advertising performance became more measured. Advertisers discovered premium didn’t nearly matter as much as they thought.  There were better ways to drive performance that yielded better and more measureable results. The ability to match messaging to people on-request and in a relevant way was more valuable in this medium than some content provider idea of what was “premium.” In this medium the public not the publisher determines what is premium.

As realtime rules based matching technology continues to improve performance advertising and marketing itself continues to grow at the expense of premium advertising. Today, despite those trying to hold on to the past, premium is little more than an exercise in brand borrowing and little else. Despite the best efforts of the IAB to bring Brand advertising to Digital it has fallen as a percentage of ad spend for five straight years. In the world we live in today Mr. Emanuel’s $9 billion dollar upfront for network TV primetime advertising is $1.5 billion less in ad revenue than Google made last quarter

What this all means for the future of digital media (and thus all media eventually) is that it’s headed to “CPM Zero.” Look around – all the digital advertising powers – Google, Facebook, Twitter, Amazon – are selling based one thing. Performance. They are not selling on the premium sales mechanism of CPM. When ‘CPM Zero’ happens, and it will, these forces pushing the digital ad industry forward win. They own the customer funnel and they will own the future of marketing and advertising. It begs one big question. Where does this leave content creators and publishers?

Don’t Fear the Reaper

Publishers will never be able to put the CPM sales genie back in the bottle. CMOs and advertisers are already finding out that they are paying too much for premium. Go ask GM what they think. What publishers are finding out is that they are no longer selling their media; it’s being bought. Purchased from a marketplace with infinite inventory in a wild west of data. Therein lies the publisher’s ace in the hole and the strategies and tactics digital publishers (and eventually broadcasters) can use to combat the death of premium. 

Like Search, Publishers need to have two crucial components to their marketplaces. They need the tension of scarcity in the marketplace. That will drive up demand and force advertisers to spend the time working on improving their performance. This was the cherry on the sundae for Google as a $1billion industry – Conversion Testing and Content Targeting grew out of nowhere to support spends in Search. Most every dollar saved with optimization went to drive more volume – or back to Google. They need a unique currency for the marketplace. Keywords were a completely new way to buy media. Nothing has ever worked better. Facebook is selling Actions with OpenGraph. Ultimately advertisers are buying customers not keywords or actions but there is a unique window of opportunity for publishers at this moment in time to create something new and uniquely people, not page focused.

The tactics used to fuel these strategies all rely on one natural resource – data. Publishers have diamonds and gold in beneath the surface of their properties. Mining these data nuggets and using them to improve the performance of their media is the sole hope publishers have competing in the world of “CPM Zero.” Only publishers can uniquely wrap their data with their media and drive performance in a manner unique to the marketplace. That’s what Google does. That’s what Facebook does. That’s what Twitter does. The scarcity mentioned above is created because the realtime understanding of site visitor interest and intent is only derived using first party data as rules and integration with the publisher ad server for delivery. So pubs are really left with one choice – take control of their data and use it for their benefit creating an understanding of WHY people are buying their media and how it performs. Or let Google, Facebook, third-party et al come in and grab their data and know nothing about why it’s being bought and how much it’s being sold.

The ability to match messaging to people on-request and in a relevant way is within the publisher’s domain. It is the most premium form of advertising currency ever created and will deliver an order of magnitude more value. It will fuel the 20% YoY growth of digital advertising and marketing for the next 15 years. Who captures the majority of that value, the advertiser or the publisher, is the only question remaining.

 

How Yieldbot Defines and Harvests Publisher Intent

The first two questions we usually get asked by publishers are:

1) What do you mean by “intent”?

2) How do you capture it?

So I thought it was time to blog in a little more detail about what we do on the publisher side. 

The following is what we include in our Yieldbot for Publishers User Guide.

Yieldbot for Publishers uses the word “intent” quite a bit in our User Interface. Webster’s dictionary describes intent as a “purpose” and a “state of mind with which an act is done.” Behavioral researchers have also said intent is the answer to “why.” Much like the user queries Search Engines use to understand intent before serving a page, Yieldbot extracts words and phrases to represent the visitor intent of every page view served on your site.

Since Yieldbot’s proxies for visit intent are keywords and phrases the next logical question is how we derive them. 

Is Yieldbot a contextual technology? No. Is Yieldbot a semantic technology? No. Does Yieldbot use third-party intender cookies? Absolutely not!

Yieldbot is built on the collection, analytics, mining and organization of massively parallel referrer data and massively serialized session clickstream data. Our technology parses out the keywords from referring URLs – and after a decade of SEO almost every URL is keyword rich - and then diagnoses intent by crunching the data around the three dimensions of every page-view on the site. 1) What page a visitor came from 2) what page a visitor is about to view and 3) what happens when it is viewed. 

Those first two dimensions are great pieces of data but it is coupling them with the third dimension that truly makes Yieldbot special. 

We give our keyword data values derived from on-page visitor actions and provide the data to Publishers as an entirely new set of analytics that allow them to see their audience and pages in a new way – the keyword level. Additionally, our Yieldbot for Advertisers platform (launching this quarter) makes these intent analytics actionable by using these values for realtime ad match decisioning and optimization.

For example: Does the same intent bounce from one page and not another? Does the intent drive two pages deeper? Does the intent change when it hits a certain page or session depth? How does it change? These are things Yieldbot works to understand because if relevance were only about words, contextual and semantic technology would be enough. Words are not enough. Actions always speak louder.

All of this is automated and all of this is all done on a publisher-by-publisher level because each publisher has unique content and a unique audience. The result is what we call an Intent Graph™ for the site with visitor intent segmented across multiple dimensions of data like bounce rate, pages per visit, return visit rate, geo or temporal.

Here’s an example of analytics on two different intent segments from two different publishers:

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For every (and we mean every) visitor intent and URL we provide data and analytics on the words we see co-occurring with primary intent as well as the pages that intent is arriving at (and the analytics of what happens once it gets there). We also provide performance data on those words and pages.

Yieldbot’s analytics for intent are predictive. This means that the longer Yieldbot is the site the smarter it becomes - both about the intent definitions and how those definitions will manifest into media consumption. And soon all the predictive analytics for the intent definitions will be updated in realtime. This is important because web sites are dynamic “living” entities - always publishing new content, getting new visitors and receiving traffic from new sources. Not to mention people’s interests and intent are always changing. 

I hope this post has served a good primer on Yieldbot for Publishers and maybe even gotten you interested in seeing it in action on your site. One of the best parts of what we do is seeing people’s faces when they first see the product. If you are a publisher and would like a demonstration please email info <at> yieldbot.com

 

Why Publishers are the Bread in the Intent Sandwich

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There are few main theses that I’ve spent my 14 year career online successfully operating under. The most successful one has always been to leverage the fact that the web is the only user controlled medium. The more ability you give for visitor events to define run-time or dynamic rules the better your ability to deliver relevance. Put another way, there is no better segmentation than self-segmentation.

In marketing terms this means pull instead of push. The best representative example of this is, of course, Search. A visitor action provides an input (query) and everything else processes based off that rule*. Relevance is delivered (and the most successful advertising technology is born) by pulling content to data input rules. Dynamic landing page optimization works the same way.

So why does this matter to publishers whose business is one of “pushing” content? It matters because of one incredible fact about Search that seems to get lost on Publishers. Neither the intent that precipitates the query or the content used to deliver relevance to it belongs to Search. People bring their intent to Search and Search sends it to content created by digital publishers.

Search maybe the meat in the intent sandwich but you can’t have a sandwich without bread. Bread is the media generating intent and receiving intent. Publishers are the bread in the intent sandwich and bread is what publishers have been leaving on the table.

Two years ago I wrote about the opportunity to build an intent harvesting platform for publishers and Chris Dixon followed up with a piece Why Content Sites are Getting Ripped Off. In the ensuing time our team went ahead and built that platform. Because of the complex level of intelligence and scale needed it has taken until now to bring Yieldbot to market. In fact we spent a full-year in invite only beta doing nothing but learning. Now that we’ve released Yieldbot we’re finding out even more amazing things about intent on the Publisher side and the opportunities are obvious and bode very, very well for the future of ad supported publishers.

The most important thing may be that publisher inventory for realtime intent dwarfs Search. As David Koretz figured out a couple years ago the top 200 pubs generate 2000% more pageviews than Google. We see that dichotomy everyday in our data. The amount of inventory using first party (better) data also dwarfs third-party data as Chris O’Hara at Traffiq recently pointed out.

"You have an entire ecosystem built around audience targeting using 3rd party data. The problem? The companies with better and deeper first-party data have a lot more audience"

We also see that most of the advertisers who are buying this intent in Search are not buying from the Pubs that have the exact same intent on their site. Even better the pubs intent is more down-funnel, has greater context, is less competitive and has the influential power of being in a branded domain and can leverage creative in ways search cannot. Publisher side intent should be more valuable to advertisers than Search with its SERP landscape of crowded text link ads and arcane rules.

As we work with pubs to understand this information arbitrage opportunity it’s clear that intent matched with timing and context can improve visit monetization by an order of magnitude. And why shouldn’t it? Yieldbot structures the data from the page that is clicked on and the subsequent pages that are clicked to. This scenario happens millions of times a day on large sites and these (click) streams of data provide rich realtime intent data that fuel our intent classifications and matching rules.

The bottom line is publishers are in the unique position to both classify the intent on their sites and use pull rules once that intent is recognized to deliver the highest levels of relevance in realtime - just like Search. Even better, they never lose ownership of their data and can monetize it directly with advertisers - even using their own ad server. This is game changing. This is the bread in the Intent sandwich. This is Yieldbot.

The Yieldbot team will be writing a lot more about our data and technology right here on our blog. We hope you join the conversation about the power shift to publishers and their data in the ad ecosystem.

* there are additional rules that are used with the query as well such as geo, temporal, query number, however the query itself is the primary rule.