Increasingly marketers are required to be technology experts and project managers as much as storytellers. As a marketer today, you are likely investing in a technology stack with the goal of better understanding and engaging with your prospects and customers – and that requires investment in terms of both budget and people.
Gartner expects that this year, chief marketing officers will spend more than chief information officers on technology, not because IT budgets are shrinking, but because marketing budgets are growing. As a result of this shift, marketers are required to take on more accountability for driving growth and showing return on their increased expenditures.
As the chief marketing officer role evolves, so must the partnership between marketers and publishers. A shared commitment to drive results is the only way you will unlock the full potential of your freshly minted marketing stacks. If done correctly, it also represents a transformational opportunity for publishers to earn higher revenue through the creation of greater value from the ecosystem.
Too often the machinery of ad technology is used to drive surface media metrics – impressions, clicks, click through rate – when we all know these numbers have tenuous relationships with the business metrics that matter, such as revenue growth, long-term customer acquisition, and market share. Measuring success using these harder-to-track but more impactful business metrics is a radical change in the way advertisers, agencies, and publishers have historically worked together – but perhaps represents our greatest collective opportunity.
In practice, this change involves publishers agreeing to shoulder more of the business risk in advertising transactions than they ever have. The low risk cost-per-thousand (CPM) advertising model allows publishers to collect money for just showing the ads, regardless of whether or not they helped to achieve any real business result. Cost-per-click (CPC) and cost-per-lead (CPL) pricing schemes share risk more equally, but still don’t align publishers with the deeper metrics that drive real business. And in these models, publishers take on risk but don’t fully participate in the upside when they create superior value.
If done well, and across the board, there is an opportunity to vastly increase the economic value of the entire media ecosystem and create a rising tide to lift all ships.
Catalyzing this shift in the marketer/publisher dynamic takes a commitment from marketers to reward publishers who will forgo some short-term revenue opportunities to invest in long-term value. It also requires a commitment from publishers to make investments in the platforms and transparency that will create lasting benefits for their advertiser clients.
As a marketer, the world changes when you strike a meaningful partnership with your publishers. Here’s how:
1) You make better business decisions
By optimizing for business objectives rather than vanity metrics, your publishing partners can give you a full picture of the activities and segments that are actually driving results. This impacts your performance in the short term and gives you insight that can help you better target customers in the future.
Imagine you are head of marketing at a credit card company, and you’re charged with acquiring customers who will spend at least $1000 in their first three months of activating their card. If you are working with a publisher on a cost-per-click basis, you’ll spend your budget getting eyeballs on clicks to your website. You might get an influx of applications, but you won’t necessarily get approved cardholders or high spenders.
If, instead, your publisher is willing to be paid based on qualified leads, you’ll optimize for long-term customers rather than clicks. This audience segment might have a very low clickthrough rate, but the individuals who do apply and activate their cards will be loyal and active cardholders.
You can then analyze this segment to acquire more VIP customers, adjusting your media spend and strategy based on their demographics and intent signals. This wouldn’t be possible if your publishing partners were only incentivized to measure impressions and clicks.
2) You reduce the risk on your media investment
Publishers will be willing to take on more risk in terms of pay structure if they are confident in their ability to attract the right audience, understand that audience, and help you find the right people within it. Done successfully and at scale, this is more lucrative than selling clicks and impressions.
Look for partners who are willing to share risk on your media investment by providing transparency into the performance of your campaigns and getting paid accordingly.
If payment is on a CPM basis, the publisher has no incentive to attract the right audience. All that matters are eyeballs. A CPC model shares some risk between advertiser and publisher. The publisher is rewarded for driving clicks, which are a form of engagement, but as the credit card example shows, it might not be the right metric for your business objectives. A CPL model, or other structure that is based on business objectives, tends to work in the brand’s favour. The publisher takes on a great deal more risk because it requires complete transparency about the performance of a given campaign.
When publishers are accountable for delivering leads rather than impressions, you aren’t paying for fraudulent clicks or 'unviewable' ads. You get more out of your media spend—which means you can significantly pull back where you’re distributing your ads without sacrificing performance. What’s more, this arrangement mitigates brand safety problems because publishers are incentivized to reach higher quality audiences on websites with verified content.
3) You up-level your role as a marketer
If your publishing partners are able to optimize for your objectives, you can shift your focus down the funnel to higher value activities. Your job becomes less about the media nuts and bolts and more about analyzing sets of data (e.g. why do leads from this site result in particularly high customer lifetime value?) You have more time and headspace to understand the full picture of the business and how marketing can drive the best results.
4) Publishers who can win here make more money.
Publishers are also working to create more value for their audience. When they are incentivized to bring the right opportunities to their audience through higher payouts, they will create more value through their media. In this situation, everyone wins: the publishers, who make more money; the advertisers, who pay to drive the business results they care about; and the audience, who get more relevant marketing and advertising content.
But in order to participate in this arrangement, publishers must be able to create real value. This means they must have real assets to leverage in the form of audience, data, insights, and deep relationships. This means that owners of better quality media will be positioned to take even greater share of the market.
And, on the flip side, it will become even more obvious that publishers without differentiated value – who can only offer advertisers clickbait, recycled traffic, and shallow relationships – will be excluded from participating.
Marketers are more than ever responsible for driving revenue and proving return of investment (ROI). Why shouldn’t publishers be held to the same standards? With higher expectations, more transparent relationships, and better aligned partnerships, brands and publishers can work together to improve the state of advertising and build better businesses on both sides.
Mike Romoff is head of global agency and channel sales at LinkedIn. You can find him on LinkedIn here.