Month: June 2019

When waterfalls are replaced with bidding, every impression can have every opportunity for maximum revenue. With the added competition, publishers can see more ad revenue. And by removing the burden of managing waterfalls, publishers can improve operational efficiency. 

After working with many app publishers as they transition their businesses, we identified five key steps in our latest report that are essential for finding success in the move to bidding. 

1) Choose the best integration option for your business 

As you consider app bidding, the first question is how to integrate a bidding solution in the way that fits your unique business needs, whether that’s through integrating with third-party mediation partners or developing your own mediation solution in house. 

To create a rich, fair bidding ecosystem, it’s important to ensure that your partners follow best practice. At Facebook Audience Network, we’ve developed a code of conduct that we share with our bidding partners. It includes key principles on winning price, auction logic transparency, and fair access for all demand sources, amongst other principles. 

2) Make sure  your auction has enough demand 

Publishers — whether building their own in-house mediation or working with mediation partners — should ensure that a sufficient number of demand sources are bidding on every auction. Ideally, publishers should work with a minimum of three networks with significant share of wallet for overall impressions to provide auction density and help maximize revenue. To get the highest price, be sure to call every bidder on every impression.

3) Build a smart hybrid setup

Even as the industry shifts towards a pure bidding environment, many publishers will maintain waterfall and bidding simultaneously. For an optimal hybrid integration, it’s important that both systems compete simultaneously for the impression. To accomplish this, dynamically merge the bidding auction and the waterfall so they run in parallel. The two winners should then compete for the impression. 

4) Test the right app and ad format with the method that matches your goals

Bidding requires initial setup and testing to correctly evaluate success. Some of the key attributes publishers should strive for when testing: 

• Stable: Test on an existing app that has stable performance metrics so that you can correctly attribute the results of integrating bidding through A/B testing. 
• Significant: Test on an app that receives enough impressions to give you an adequate amount of data to evaluate.                                                                                                                      
• Distributed: Test with higher-performing formats, such as rewarded video, interstitials or native ads. You’ll see more success with bidding if the formats you test also have impressions distributed among multiple ad networks.

Remember that A/B tests are most comprehensive when evaluating revenue uplift. Since outside variables are less likely to influence the outcome, we recommend using A/B tests to make it easier to learn the amount of revenue attributable to bidding. 

5) Evaluate success with the right metrics 

From CPM to ARPDAU 

Bidding fundamentally changes the way ads are selected and delivered, so success cannot be correctly measured with metrics intended to evaluate waterfall mediation. 

Since waterfall mediation was introduced, network CPMs have been the de facto success metric, with fill rate and overall payout ratio as secondary measures. In a bidding environment, the key metric is Average Revenue Per Daily Active User (ARPDAU), which measures overall revenue, not performance by network.

Evaluating success is simple: Look at ARPDAU before bidding and compare it to ARPDAU after implementing bidding. You may see the CPMs of some networks decrease. This most often means the network previously had access to only top-value users due to a price floor and its position in the waterfall. 

With bidding, the network has now gained full access to all impressions and could be winning lower-value users, which may negatively affect CPMs, but will positively affect ARPDAU overall. This is why it’s important to remove price floors for bidding networks: They may increase CPMs, but they’ll cause lost impressions and decrease overall ad revenue.

The Efficiency Quotient 

App bidding lets teams turn their focus away from managing a complex waterfall and toward work that has more impact on the business. This increase in efficiency is a crucial measure of success.

As Jarkko Rajamäki, Rovio’s vp of advertising, said: “Not only has bidding driven an increase in ARPDAU compared to waterfall, but the efficiency gained by not having to manually manage a waterfall has meant our team can focus their time on new areas to drive greater impact for our business.” 

As app bidding gains momentum, publishers should prepare their businesses for a system shift. The switch to bidding has the potential to turn opaque methodologies into open and impartial transactions, creating more publisher revenue and a more efficient and sustainable ad ecosystem. 

To learn more, download the complete guide: The Essential App Bidding Guide: 5 Steps for Publishers to Achieve Success 

The post Ready for app bidding? 5 things every publisher needs to know appeared first on Digiday.

The 50-50 joint venture is based on an existing TV alliance — 7TV — between the two media companies, formed last year, but with the addition of Discovery’s Eurosport Player and ProSiebenSat.1’s Maxdrome video-on-demand offering. The streaming product, launched last week as an app, is called Joyn and is being run as a separate entity to the two media owner partners, with a staff of 200 of its own. The combined mission: to be the biggest OTT content service in Germany. The company will also be making content for Facebook Watch as part of an exclusive deal.

Initially an ad-funded offering, the service will add a subscriptions tier in November, in which specific exclusive content and access to sports such as matches from Germany’s football league Bundesliga will be available as a paid offering. The app bundles 55 live TV channels but also launched with two original, exclusive series: “Single Diaries” and “Technically Single,” whose episodes are between five and seven minutes long. Each company will retain ad revenue from their own inventory.

ProSiebenSat.1 wouldn’t share specific download numbers of the app, but agency sources put it at 1 million downloads within the first week.

Traditionally, German consumers have been far slower to embrace paid-TV services than other markets. It has a strong free-to-air broadcaster market and two major public service broadcasters, but Sky Deutschland has been the only pay TV provider there. Agencies have attributed Sky’s success predominantly to its sports rights. But that mentality has shifted over the last few years, largely due to the uptake and cheap price points of Netflix and Amazon Prime.

In Germany, Netflix and Amazon Prime have begun to take a more significant chunk of the subscriptions market. Netflix has an estimated 5 million subscribers in Germany, while Amazon Prime is estimated to have around 10 million, according to Enders Analysis. Broadcasters across Europe have begun to push back against that increasing threat with more joint ventures and competing products, in the OTT space in particular. ProSiebenSat.1 is no exception.

“The likes of Netflix really opened up the paid market in Germany,” said Eun-Kyung Park, chief digital officer, Entertainment, at ProSiebenSat.1. “Classic TV ad revenues are stable but under fire. If we want to maintain growth we must diversify [into subscriptions] and form partnerships. We’re putting all our promotion power into this [Joyn].”

New partnerships are core focus for Park, who believes they’re critical to maintaining growth. For that reason, the broadcaster has agreed to an exclusive deal with Facebook to create content for its video platform Watch. As it has with all its media owner partners for Watch to date, Facebook will pay ProSiebenSat.1 to create the content. Around 50 people within the broadcaster’s digital team will have input into Watch content. In time, the hope is to integrate its own ad server into Facebook so that it can monetize this programmatically and worldwide, according to Park. Like most broadcasters, ProSiebenSat.1 has found Facebook most useful as a platform to promote its own TV shows. Now it expects that to boost viewers to its other channels further, including Joyn, while also monetizing what it creates via ads. “Longer-form content will be on Joyn and Facebook is for the shorter content which will drive people back to Joyn and other channels,” she added.

Broadcaster and publisher alliances have historically struggled to meet initial expectations and achieve their missions of outflanking the major U.S. tech platforms. For that reason, media agencies remain skeptical about the longevity of the Joyn alliance. To entice advertisers the OTT service will need to offer more exclusive content than the current array of catch-up TV for instance, according to Robert Buendge, director of TV at Publicis Media in Germany. Businesses like ProSiebenSat.1 must also find a way to differentiate their OTT and VOD offerings from what is offered by the US tech platforms, not only by competing on price, but exclusive content and data.

“I am skeptical about whether it [Joyn] will really be successful in the long term against Amazon Prime and Netflix,” said Buendge. “But it’s an attractive product if you like linear TV as they have more than 50 channels on there. From a user perspective, it’s very easy to navigate so they have put a lot of effort into the product.”

If Joyn can guarantee a large selection of exclusive content, on top of the catch-up offering, but also share data on how the audience interacts, and popularity of individual shows for example, then it would likely become a partner for all media agencies in Germany, added Buendge.

“That’s the kind of data Netflix and Amazon don’t share, so if [Joyn] were to share that kind of data then it would of course compel us a lot more.”

However, agencies welcome the additional options. “The big U.S. tech companies like Google, YouTube, Amazon and Netflix, are making it very challenging for classic German local media companies, and they must compete to ensure their survival. Evolving their OTT and VOD is the right approach if they’re to do so,” said Buendge.

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However, starting in June 2018, things became less awesome, as both Ranker and Topix saw the effectiveness of their Facebook arbitrage operations diminish.

Ranker had planned to spend $40 million to promote its content as ads on Facebook in 2018. But the company only ended up spending half of that money, according to Ranker CEO Clark Benson. The reason was that at the beginning of June 2018, Ranker saw that the cost of its promoted, or boosted, posts increased by roughly 30% overnight.

Around that same time, Topix saw a similar issue with its Facebook ad buys. Facebook was not approving its ads as often as it had been previously, which made it difficult to run as many ads on the social network, according to Tolles. “There was a lot more pressure to look at things on an individual basis. So it was harder for us to find something that worked and press the spend,” he said.

Neither Benson nor Tolles knew exactly why their Facebook ad strategies were impacted, but they believed the issue is connected to Facebook’s efforts to clean up its platform following the 2016 U.S. presidential election cycle, in which bad actors ran ads on Facebook to promote fake news articles. According to Facebook’s ad transparency tool, several of Ranker’s and Topix’s Facebook Pages have run ads about social issues, elections of politics. A Facebook spokesperson declined to comment on specific publishers but pointed to a company blog post published in October 2018 detailing the company’s efforts to cut down on low-quality ads.

When it comes to paid media on Facebook, “Facebook is very pedantic and makes a lot of effort now to make sure any information there is very accurate and validated and fact-checked, on the paid media side even more than the organic side,” said Guy Oranim, CEO of First Media, which began running ads on Facebook to drive traffic after launching a site for its publication So Yummy in September 2018.

While neither Ranker nor Topix are Macedonian teens operating fake news sites, they primarily publish articles, like lists and quizzes that resemble the clickbait and engagement bait that Facebook is trying to cut from its platform. Additionally, the fact that the two publishers rely heavily on ads to drive traffic to their sites from Facebook may have been taken as a signal by Facebook’s algorithms and ad reviewers that they were misusing the ad platform. Tolles said the “vast majority” of Topix’s Facebook traffic comes from its ads. “We have not really spent a lot of time optimizing for organic reach,” he said.

While neither Ranker nor Topix welcomed the negative impact on their paid distribution strategies, both publishers have been able to weather the storm because they manage their Facebook ad buys to operate at a profit. Topix’s revenue grew by nearly 50% year over year in 2018, said Tolles, declining to say what revenue is. And Ranker has remained profitable, but while its revenue grew in 2018 versus 2017, the company’s revenue is expected to drop in 2019 because of the Facebook change, said Benson. Nonetheless, both Ranker and Topix have adjusted their Facebook strategies.

The content that Topix now promotes on Facebook “looks a lot more like a traditional publisher’s now: longer pages as opposed to a slideshow format for things that have large amounts of content,” said Tolles.

Ranker, meanwhile, has invested in growing its organic reach on Facebook. In the past, half of the publisher’s audience development team was dedicated to its paid distribution, and the other half focused on the organic side. Now that entire team has prioritized the organic side, and Ranker has seen its organic traffic from Facebook increase by roughly 50% compared to last year.

Both Ranker and Topix continue to advertise on Facebook to drive traffic to their sites. However, they each have cut back on that spending. While Tolles declined to share specifics, Topix is spending “back to the upper end” of the $1 to $3 million that it had been spending, on average, each month on Facebook ads in 2017, though not as much as it had been spending in the first half of 2018, he said. Ranker’s monthly Facebook ad spend had been in the seven figures before the June 2018 change and is now in the high five figures, Benson said.

Advertising on Facebook to acquire site traffic “still works and it still comes in at a decent margin. But we only dedicate one or two staffers to it. It’s just really a function of shifting resources,” Benson said.

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