Within the following writing I will try to explain the risk of the business which Publishers are confronted with – or at least the risk of having no influence in the business. Deviant from other Business Models (Such as Software as a Service, Classifieds and classic retail e-Business) Publishers business is mainly not depending on the application owned by themselves.
Well, let me try to get started with a myth of the informative internet: The internet is costless.
By far it isn’t true. Whether you like to publish information about your life on whatever platform or you want to consume information – everything it has its price.
The place where your published meanings are consumed are very expensive to keep alive – whether it is twitter or Facebook or Google-plus. Even if it is not your intention to do money – it is the intention of the places where you post your “content” to do money and the time you spent to post something takes time and time = money (ok ok – sometimes this time can be fun also).
Usually the “hosters” do money with advertising. Advertising also drives the business of “free” consumable information such as provided by news portals. Not only that it is very expensive to host such news content, all the journalists like to get some bread between their teeth too. And maybe the chief of the news portal would like some very excellent wine in the evening.
Making money mainly with Advertising means in the today’s publishing space to put all the power of the core business into the hands of other companies (3rd Party). There is nearly 0% percent of the Ad-driven Business that is in publishers own hands – from the perspective of “controlling” it.
Vice versa this is adoptable to those who like to advertise something as it is for those who bring both parties together (marketers).
Advertising is multi-billion dollar market and one of – if not THE – the main drivers of the internet.
North of 90% of the Google Money is based on Advertisement-Market. And where there is a multi-billion dollar market there is usually some room for mud.
What do I mean with “control” (not to mix up with “configure”)?
If you are a publisher – can you currently control if your business is running as expected and do you get the income from your webpage as it is “configured”? Hard to say – or ? Especially when everything – including the configuration – happens on 3rd Party Services. You still might answer with: Yes – sure I can.
To be honest with you – the only thing where I agree with is that one might can control the part of content that he is producing and which is served by an excellent IT-Services. This content needs to be reachable and performing well. Without this root requirement one will clearly do no online-business at all. Shame on those who have no control over this too. But this is the part of your business which costs money with the intention to get more money in return.
Most Publishers can not control their business – because they do not own the business. The business is driven by – from the publishers perspective – 3rd Party, totally. (In cases where you have a powerful monitoring in place I am wrong of course).
Big news portals or other publishing web-pages need some parameters to estimate what money to expect from the published content. Long term trends are used to build a strong strategy. Without these estimates future investments can not be planned and they can’t plan to leverage the reach of the offerings. Simply because reach is the key to money for publishers.
To be able to do some trending usually the offerings contain one or more tracking pixel or analytic tools telling them how much page impressions/unique Visitors/Visits they currently have or had in the past. Nearly all of these “tracking methods” are 3rd Party.
In addition in some countries there are (private) institutions which counts publishers reach additionally and publish these numbers (in Germany it is IVW in the US (correct me if I am wrong) IAB) for public use. These tracking instances are 3rd Party as well. Advertisers check Webpage-Ranking Portals or the institutional sources to search for space where it is worth to spent money to run campaigns.
So what do we have currently: Some content and various tracking 3rd Party sources (mainly 3 to 4 various analytic tools). And 3rd Party sources for Numbers.
You might be not astonished to hear that it is common sense that all of these numbers differ – maybe by self experience. There is a good reason for that: Various tools = various counting technology. (You might want to read more about this here). All tracking methods are more or less not reflecting the reality. Things like wrong positioning of a tracking pixel can result in lots of percent not tracked users.
As mentioned above Publishers leave their business into the hands of others which is good. There are specialists around who are able to manage and tie together those who want to spend money (Advertisers) with you (Publishers). Marketers are specialists doing this kind of management. The main work of a marketer -for publishers – is to get loads of Ad-Spaces rented by Companies who want to let their campaign seen by your audience (generally speaking – there are some other factors adoptable here). This sounds easy but there are so many extra rules which require absolute dedicated knowledge.
Renting Publishers Ad-Space costs money for Advertisers. If you are a Publisher – we now talk about your income.
Depending on the offerings of the marketers your Ad-Space rents are calculated based on:
- Reach (Size of the Audience)
- Frequency (Amount of views per individual)
- Gross Rating Points (GRPs) which is a calculation of both factors above
- Target Rating Points (TRPs) which is a calculation of both factors above plus other target specified criteria
- Impressions how often has an ad been shown (currently – to lower costs – these metrics are built to prove an ad at the bottom of a page has been really impressed)
- Cost per thousand (CPM)
- Cost per percent Points (CPP)
To make it more complex the CPM and CPP can be bundled to a “one time price” with a “guaranteed” CMP or CPP. Like: We guarantee 800.000 unique visitors per day – and this costs you amount xx.xxx of whatever currency. Some “click through” participation is mainly driven by affiliated business. I keep that out – else it gets to complex for me.
So far there has been no secret told. We all know the metrics well we also know what makes publishers getting more money: It is the amount of “counted” impressions. The higher this number or the guaranteed impressions are the more money are Advertisers willing to spend/rent and the more Money Publishers produce with their webpage.
Until now – still every metric named is not under your control – even worth all measures are taken by others (3rd 4th 5th Parties)
Who is keeper of the metrics of “Ad-Impressions”, “Page-Views”, “Reach” ? All these data – defining your Money are taken by others.
Usually these metrics were taken by the marketer or the Ad-Trackers which are requested with an Ad-Request (yes two independent requests) or and Ad-Delivery (two independent requests). Beside of that special trackers areserved with the Ad itself (comscore, adclear…..). Btw. none of the trackers can prove that an Ad has really been delivered – but thats different story. As long as it is counted as delivered the publisher should be fine.
These 4rth and 5th party metrics – all collected independently – always differ from your other 3rd party metrics (3rd party tracking).
This is still common knowledge in the Online-Marketing space. Therefor and because of all these metric variations marketer often put a range of 10% aditionally to the amount of the publisher earnings to avoid discussions of “3-7%” of indifference of tracking pixels. 10% can be a lot of money – depending on your coverage.
BUT what if the difference is north of 20%?
What if your Ad-Impressions (counted by 3rd Party) is way below your (other 3rd party) counted “Page Impressions” by a different 3rd Party. And the marketer says: Sorry – you can no longer deliver the “guaranteed” traffic – you Ad-Space is to offer way cheaper now – because xyz metrics is saying that.
OUCH ! This is no good! Business is at risk ? No, some business is already lost – unchangeable. Next month cards will be riffled again.
Believe me when I tell you that I have seen very annoying things around the advert-delivery-chain – way more often than expected (I have called this mud earlier).
It might be worth to spend some thoughts on this and rethink the option if it is worth to put an instance in place to control that business. Simply because: All the tracking instances are calculating the business (yours) based on requests and responses. They reflect with 0% their own availability or performance for whatever reason.
How often have you heard about high quality Service outages lately (Amazon Cloud, Facebook as example). One should better not believe or trust that companies serving spare parts of the Ad-Delivery-Chain do better work. And there are a freaky load of companies trying to get their piece of the multi-billion dollar cake (geo-targeters, affiliates, real time bidders, re-targeters, behavior targeters, ad-storages, ad networks, ad-exchanges, yield optimization…) even if it is only some new real time something.
Without fingerpointing – this is good as it is – where there is money there is movement. This all keeps the internet “costless” for users.
Marketers in charge of the Publishers “Ad-Space” can only work with metrics delivered from their own Ad-Servers? There is no way to control the other parts of the delivery chain.
Now after all that written. Do you still think Publishers are able to control their Business ?
What is necessary to control the Business ? Or at least to tighten estimates and be aware of Business in risk before it is too late?
First of all: It is only possible to control business when it is measured. Therefore you need an instance which allows you to:
- Measure the ability of the Ad-Trackers to be able to receive requests AND to send a sense full response (503, 410, 500 HTTP Returns are no good – or even worth the SSL certificate is outdated)
- Measure the difference of successful Ad-Deliveries compared to Ad-Counts.
- Also it might be interesting to know if your “Tracking” Pixel – or the Public Ranking Pixel is delivered well. Often these Rankings are the first address for Advertisers to check for reach.
- Measure the users affected by 3rd Party issues. That should help you to stay “real”.
- Use a Monitoring instance which supports the dynamic Ad-Delivery-Chain (the closer you monitor from the End-User-Perspective the better) to reflect: Geo Targets, Content Delivery networks of Ad-Storages, etc.
On one single Day of monitoring one of the german most famous News-Portal I have counted 250 different Hosts delivering content. Excluding the Host of the News Portal itself. In total 85 different Domains were requested/redirected to/delivering content.
85 third-party domains – doing nothing else but content enrichment and showing ads. And this is not a very exquisite case.
I think it is worth and imporatant for Publishers to start to get control over their 3rd party delivered business.
Real Life Example (Bigpoint):
I have a “real life” example on how 3rd Party inability to serve content (tracking pixel) lead to bad Press and bad statistics – and even more worse – decreasing Ad-Revenue.
Bigpoint – one of the world biggest browser game producer and hoster is making parts of their money by Advertisements (multimillon dollars per year).
In a very famous media news portal (Meedia.de) – exclusively was stated that “Bigpoint” had 22 % less visits in May 2012 compared to April 2012 ! 22% less (sh.t, thats 12.000.000 visits less). These numbers are based on the “official” Data published for public use from IVW. IVW is the number-one-address in Germany to check for “world wide coverage” of german publishers. Tracked by a pixel which every single Publisher in Germany knows as “IVW Pixel”. These public available Numbers are THE numbers for Advertisers to plan and sell their campaigns – they are trusted and respected source.
But lets check if the 22% are reflecting the truth. Is there a chance that this number is simply wrong and base on wrong data ?
I have monitored the German portal of Bigpoint over the last 3 days from the “End User Perspective” – which is a true Last Mile monitoring. A mass of Monitoring instances (about 526 different locations within 3 days) called the de.bigpoint.com portal with a Firefox browser. All instances calling the page used for sure the same technology. And I was really a bit shocked what I have seen.
We can see an up to 800% decrease in response time of the IVW-Pixel in the evening hours – those hours where games are online (explicitly filtered by host name ). This is what I would name “drastic” (Google i. e. loads within 2 Seconds measured from the last mile).
The graph shows averages – one point reflects 20 Measurements. Very inconsistent performance – especially during the main traffic time of the Bigpoint Portal. Source: Gomez – APM
So first sighting is – a part of the amount of 22% might be because of slow response time of the pixel. The users might have clicked on a link and left the page before the pixel has been loaded. Just an idea. To verify I have to check its position in the waterfall chart or firebug…) But lets check the second important metric, the availability of the IVW Pixel.
availability decreased down to 80% in the key traffic times. hmm… Source: Gomez – APM
This means with other words: Currently the pixel get loaded way slower when there are freak loads of users PLUS there are a huge amount load of users not counted because the pixel of IVW not reachable and has not been delivered (in this case the request timed out).
For sure this sighting will result in a decrease of user in the public available status -and for sure the data will not reflect the truth.
I think this makes one look differently to the 22% decrease of the traffic – right?
It is not a secret that IVW numbers are the numbers in Germany making Ad-Space prices. Bad numbers – less money to make. Business in Risk? No – Business lost, simply because of a bad press and questionable online statistics where your guaranteed traffic and reach can be read from.
Exactly this is a very current case the headline is about. Publishers (Bigpoint) Business is in risk if they trust in false data instead of controlling the truthworthiness.