Tools, Threats, and Hot Takes for Publishers

No time to listen to the whole episode? We've picked the top highlights from every section to enrich or supplement your listening experience. This can serve as a standalone summary of the conversation as well:

‍Priorities for Publishers in 2024

Justin highlighted that while his publications maintain a philosophy of open access without hard paywalls, the revenue potential varies based on how users access the site. Since 2020, it’s become crucial for publishers to adapt to different user paths and ensure revenue doesn’t decline significantly from any single channel. Modern publishers need to understand better where their readers come from and how each channel impacts revenue.

Suggestions for other publishers:
1. Monitor User Paths: Track how readers access your site through different browsers and privacy tools.
2. Adapt Monetization Strategies: Tailor revenue strategies to align with varying access methods and user preferences.
3. Analyze Revenue Impact: Assess how different channels affect your revenue and adjust accordingly to optimize earnings.
4. Maintain Open Access: Continue to offer content freely to ensure broad reach, but be proactive in understanding and managing revenue variations.‍

ID bridging explained to a 5-year-old 

• Justin explained that publishers historically didn't need to think about probabilistic IDs, as SSPs handled it. However, the industry has evolved, allowing publishers to take more control and increase the value of their inventory before it goes to auction. As Justin put it, "Publishers are being empowered to take more control themselves... they've been given a chance here with technology to increase the value of their inventory before it ever goes out to auction." Probabilistic IDs involve massive data graphing that is complex for typical publishers, but it's crucial for sustainability given the challenges in CPMs and the changing business landscape.
  
• He simplified it by comparing it to a game called "Guess Who?"—publishers use clues like browser data and privacy settings to make an informed guess about the user, which allows them to create advertising tokens like UID2 or RampID. The space for probabilistic IDs is still evolving, with companies like The Trade Desk and LiveRamp expected to play a larger role in the future. He also highlighted the IAB Tech Lab’s efforts to bring clarity to bid requests by distinguishing between probabilistic and deterministic IDs. Standards for probabilistic information will likely solidify in the next 3-6 months, providing clearer sources for publishers.

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Justin’s take on removing reseller lines from ads.txt

• Justin explained that balancing short-term revenue dips with long-term gains was key to their strategy in 2022. As he put it, “We decided to take control of our supply paths. The only way to buy our inventory is going to be through our official direct channels. If we enable reselling, we’re enabling others to step in and sell our inventory in a way we haven’t opted into and perhaps don’t even understand.” While resellers could generate short-term revenue, they posed risks to control and sustainability. By eliminating resellers from their ads.txt file, they aimed for a more profitable long-term strategy.
  
• The initial impact was a temporary drop in revenue, but Justin planned for this. He timed the change in May 2022, giving the ad stack time to stabilize and recover before the high-demand Q4 period. This strategic timing allowed them to mitigate short-term losses while positioning the business for greater long-term gains. Within 60 days, CPMs started to rise, and by the end of Q4, CPMs were up over 80% year-over-year.
  
• Justin emphasized that publishers must weigh the risks of short-term revenue drops against the long-term benefits of higher CPMs and revenue control. He advises making this kind of shift in Q1 or Q2 to avoid jeopardizing Q4 revenue.

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Impact of generative AI on web publishers

• Justin described generative AI as an "existential threat" to web publishers, particularly due to its impact on search traffic. With 40-60% of traffic coming through search, the concern isn’t just about ad rates varying by browser—it's about the fact that if users stop visiting websites and rely solely on AI-generated answers, there’s no opportunity to monetize at all.
  
• He explained that while some generative AI companies propose including source links or referrals in their responses, users are unlikely to click through to publishers’ websites. Instead, they continue engaging with the chatbot for follow-up questions, reducing website traffic.
  
• Justin emphasized the need for publishers to take a proactive approach, advocating for commercial relationships with AI companies using their content. He suggested one starting point: blocking crawlers like Google Extended in their robots.txt file while also recognizing that this solution isn't foolproof.

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Is there a future for the Open Web? 

• Justin emphasized that while quality content will remain valuable, the way it is funded will need to evolve. He explained, "There still needs to be newsrooms, and there still needs to be folks who put the initial information out there that can then be referenced by all of our technology." Currently, display advertising supports newsrooms, which provide the information generative AI depends on. He pointed out that AI relies on trusted sources, and those sources are still essential.
  
• However, with display revenues declining, the challenge will be ensuring content creators are fairly compensated. Publishers have already turned to alternative models like affiliate commerce, subscriptions, and donations, but not all will succeed with these approaches. The key will be securing revenue from the technology that uses their content, making this a critical and ongoing discussion as the landscape shifts.

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Should publishers build their own AdTech? 

• Justin explained that building their own AdTech is part of maintaining control over their entire publishing experience. He compared it to a writer choosing to self-publish on platforms like Substack versus submitting work to a publication that handles everything. Owning their own AdTech, alongside managing their CMS and front-end, allows them to ensure everything works together smoothly.
  
• He noted that "if you're a content-only minded publisher, no, you're not building AdTech," since such publishers would focus on finding external solutions for ad management. However, for those running a publishing business and committed to providing a seamless experience for both content creators and readers, there is significant value in developing their own AdTech to complement their overall system. He believes that publishers who see the bigger picture will continue to explore and tinker with their own AdTech over time.

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Bonus content: Pro tip on Dynamic Price Floors

• Justin discussed the complexities of dynamic price floors, explaining that while it allows publishers to price their inventory more effectively, it requires careful consideration of the entire yield mix. Publishers often fear setting prices too high and missing out on revenue. He pointed out that AI and machine learning are essential for making dynamic, real-time pricing decisions based on factors like device, browser, user location, and time of day.
  
• However, Justin shared a cautionary tale from his own experience, saying, "I broke it initially. I set our price floor too high at a universal level and ended up losing in the big picture." He emphasized that raising prices without accounting for the overall yield can result in losses, as he experienced when lower CPMs filled a larger part of his inventory through Adx.
  
• Ultimately, Justin believes that while dynamic price flooring can provide a lift, publishers must monitor its impact carefully and maintain participation from all SSP partners to ensure healthy net revenues.

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