More Publishers Are Breaking Up With Resellers

Publishers of all sizes are cutting ties with programmatic resellers. Just as buyers are employing supply-path optimization to eliminate exchanges that provide little value, publishers are removing ad tech intermediaries that clutter their setups or harm monetization.

By working with fewer partners, publishers are prioritizing control over their ad setup and site experience over the lure of extra revenue.

Large publishers with the most internal resources made the move first. The New York Times, for example, reduced its programmatic partners by 75% over the past three years and ended all reseller relationships. Similarly, Hearst began paring back partners in 2016, just before ads.txt launched, and stopped including resellers. Business Insider, an early proponent of using ads.txt to remove resellers, never put any intermediaries on its ads.txt file.

But many more publishers are joining in. DotDash cut ties with all of its resellers last month after spending the last six months evaluating reseller relationships. AccuWeather trimmed its resellers this year, and the small, independent music site Consequence of Sound plans to carefully analyze its reseller relationships in the second half of 2019.

“We wanted to have the highest quality ads against the highest quality journalism,” said Jay Glogovsky, The New York Times’ senior director of revenue analytics and operations.

By working more closely with fewer exchanges, the Times can ensure the top ads for an audience that already pays for content. Removing resellers ensures that buyers also get quality, high-performing ad placements on publishers’ sites.

“The more control you can have over your ad stack, your inventory and how you work with marketers, the better,” said Sara Badler, SVP of programmatic revenue and strategy at DotDash. “We can see the patterns of advertisers better [with fewer partners] and help them buy and scale more effectively.”

Eliminating resellers deepened Business Insider’s relationship with its buyers, said Jana Meron, the publisher’s SVP of programmatic and data strategy.

“We can explain how everything works on our site in a very detailed manner,” she said.

Ads.txt impact

The ads.txt initiative is making this paring-down of resellers possible.

Initially designed to stop domain spoofing, ads.txt works by having publishers list all of their partners. If a reseller’s ID isn’t on that list, most DSPs won’t purchase the reseller’s inventory for their clients.

Publishers previously had to ask exchanges to block resellers, an incredibly manual process, said Scott Both, Hearst’s senior director of programmatic sales engineering. The publisher would ask each SSP for a report on who was selling inventory on each of its domains. Then, it had to ask the exchange to block resellers individually.

Now, publishers control who is authorized to sell their inventory through their ads.txt file.

“Ads.txt made it easy to control, in one move, what exchanges were able to sell inventory through our domains,” Both said.

Changing reseller value prop

Publishers are nixing resellers because many don’t provide enough value to justify the publisher’s loss of control.

Authorized resellers in a publisher’s ads.txt file generally provide expertise in either tech, content or sales.

Some resellers offer a unique ad unit – like a video player, native ad or custom mobile format – that requires the publisher to put a “widget,” or code, on their site. Or they provide video content or a poll that features syndicated content along with ads. Often, they’ve already signed deals with advertisers that want to use the reseller’s unique ad placement.

Resellers can also bring sales chops, like access to regional advertisers or other direct clients. These resellers will approach a publisher about a private marketplace deal that requires publishers to list them on an ads.txt file. When the site’s programmatic team has limited sales resources, these deals can be tempting – but fewer publishers are understaffing their programmatic teams today.

“As publishers develop their programmatic skillsets, the concept of outsourcing that skill and work to another company became less appealing,” Hearst’s Both said.

Today, that need still exists at one end of the market. “Resellers have a place when small and medium-sized publishers don’t have enough staff to manage business on each exchange,” Both said.

While resellers create short-term revenue without requiring internal resources, publishers are noticing the potential long-term cost.

Adding a widget, for example, can slow down a publisher’s site. It may also allow the reseller to implement bad practices, such as constantly refreshing a video ad, which could cause a publisher’s viewability score to plummet. Or they could do “bid jamming,” a practice where multiple requests for an ad are sent, which is forbidden by most exchanges and DSPs. Not all resellers hurt a publisher’s site, but because publishers cede control over their inventory when they work with resellers, it’s hard for them to catch bad actors.

Consequence of Sound, for example, underwent a project that improved its site viewability by 75%. In the process, it took “a fresh look at our ad stack and demand partners,” said CEO Sajan Shiva. He found that some of its resellers were refreshing nonviewable ads, sending multiple bids for the same impression and increasing latency on the page.

After discovering these issues, the site removed resellers with duplicative demand and is looking through its remaining partners with a “fine-tooth comb,” Shiva said.

Since resellers create so many paths to a publisher’s inventory, it’s easier for bad ads to get in and harder for publishers to identify bad practices or lax controls by resellers. Mobile redirect ads tend to occur most frequently on sites with many resellers, Heart’s Both said. “Publishers who keep tight control on this have fewer issues.”

Resellers also might open up a less efficient path to the publisher, because resellers take additional fees, can set different floors or provide a lower-quality ad placement. By shutting off a reseller, publishers may not lose an advertiser’s money, but see it flow through another exchange path.

At The New York Times, Glogovsky is constantly testing partners. He looks at the incrementality of the demand they provide and their ability to ensure high ad quality.

The right number of exchange partners, and whether that number includes resellers, is an open question, and one that may be different for each publisher. But giving resellers access to inventory without oversight and testing is going the way of the ad network.

“I would encourage other publishers to re-evaluate the partners they work with,” Glogovsky said. “We’ve made the decision to focus on quality revenue and a quality reader experience.”

This post was syndicated from Ad Exchanger.