If you have ever frequented high-end restaurants or hotels, you may have noticed they are very keen on learning your preferences and habits. In the hospitality business, knowing your customers is critical to creating the most engaging experience. When you check in at the front desk, your preferences and history is already known to the team and your room has been prepared in anticipation of your arrival. Unlike a hotel, publishers' audiences do not directly pay for their 'visit.' Nonetheless, like a hotel, a publishers revenue is driven by the frequency with which their audience returns and the duration of their stay at the property. One of the best marketing teams in the world, Apple, figured this out and incorporated its learning into its business model. Apple held focus groups to uncover ways to differentiate their new retail stores apart from their competition. When the group was asked about the best service they’d ever experienced, 16 out of the 18 participants said it was in a hotel. Why? The concierge desk at a hotel has only one purpose, to help. So, Apple came up with the genius bar—a bar that “serves up” helpful advice. Essentially, what they did was put high-tech versions of a concierge desk in each of their retail stores.
I used the above analogy as it is a great example of the paradigm shift that is coming to all publishing businesses (print, online, television, etc.) As all addressable media becomes audience targeted (digital and non-digital) publishers will focus on managing and attracting specific audiences, a portfolio of audience segments. Providing audiences the ability to customize experiences with tailored content and relevant advertising, or doing it for them, is the publishing version of the 'concierge.' In the old model of media based on monolithic audiences, there was really nothing to manage. The microscopic composition of a publisher's audience didn't really matter since they could not sell just that segment. For example, does the New York Times print edition really care how many subscribers are Female, 25-45, two children, in middle income households, driving a minivan, in the Chicago DMA? Yes, for research purposes, but no advertiser will buy advertisements just to target that segment.
In today's RTB market, publishers are yet to actively define, store, and analyze the attributes of their audience members for the purpose of understanding projected value of seeing that impression in the future. As a greater and greater portion of revenue is derived by publishers from their audiences at the individual impression level, understanding audience segment availability and pricing become increasingly important in optimizing the insertion orders that a publisher sells. This is where the MASS Exchange plays a critical role - the exchange enables the transaction of guaranteed ad placements to specific guaranteed audience segments. The best of RTB and traditional guaranteed digital media buying combined.
In the future, publishers will evolve their approach to managing revenue from and ad placement portfolio management to an audience segment portfolio management approach. In the end, publisher's revenue is driven by enabling advertisers to reach the right audience. Experiences, ad placements, and context are very important, but only if they reach the right audience. So what should a publisher do? create an audience concierge! Understanding who your customers are, why they consume your media, and what they want and need at the moment they arrive is the new audience portfolio management. The more media the audience member consumes, the higher the relevancy of the content and advertising, the more revenue opportunities there are.
The first two steps in achieving this new paradigm are already upon us. The DMP and yield optimization. Publishers now have the tools to enable them to understand and leverage both 1st and 3rd party data about their audiences. But, the DMP and yield optimization are only a part of the picture. These two tools enable machine based optimization in real time, but only for the present, how can publisher's optimize the future? how can publishers optimize the guaranteed inventory they sell relative to current demand for future inventory? The answer to that question is the next evolution of ad tech. An exchange that enables publishers to map the demand landscape and clearing prices for their future inventory. In combination with the DMP, inventory management, and yield optimization, the new insertion order optimization tools form the foundation of the publisher's portfolio management stack. With such a stack, publishers will be able to machine optimize the present and the future, true portfolio management. All of my present and future supply meeting all the demand for present and future inventory, regardless of transaction size, in a machine optimized environment.
"You, you may say I'm a dreamer, but I'm not the only one. I hope some day you'll join us." - Lenon