Growing your publishing brand

Cameron Hulett, senior vice president of publisher solutions at Acceleration, gets to grips with the ‘science’ of yield optimization.

Wednesday, 7 October 2009

Yield optimization is as old as the media industry itself. Newspapers, television channels and radio broadcasters struggle with managing this ‘science’ every single day. In the days before digital it was relatively easy to track and manage. But now with the advent of digital and multichannel publishing, publishers are faced with serious challenges about how they sell and manage their traditional space as well as their digital space. One of the most critical questions publishers have is how they can optimise their yield in the digital publishing world.

One sector that is really feeling this pinch is the newspaper publishing industry. Traditionally it asked itself how it could make the most money from its available print space while staying within its agreed ratio of advertising to content mix. But now it also has to ask the same kind of question of the digital landscape. So how do publishers manage their online yield and optimise across this far more complex channel?

Think of yield management in the same way retailers do

Part of the ‘science’ of yield management is to try and think of selling inventory in the same way clothing brand retailers do. For example, if we look at Nike, it sells direct from its store on Oxford Street in London, via select retailers, and through its own factory outlet stores. While selling via these channels it strategically times what it will release to each store so that it can control the pricing and ensure maximum revenue is made. Publishers need to apply a similar kind of thinking to this when it comes to selling online inventory – premium and remnant inventory alike. They need to control what they’re pushing to advertisers, and when.

Get the packaging mix right

The next step is for publishers to get the package mix right. To do this they need to design packages based on value that has been justified. They then need to position it among their target market of advertisers and market it effectively. If we go back to the Nike analogy, it might release a pair of premium running shoes in its flagship store in Oxford Street and via select sports shoe shops across the country, and then eventually in its factory outlets when it becomes end of range. During the entire course of the sales cycle its marketing and positioning would have shown how and why each shoe is different, thereby justifying its price.

Initially the price package and availability might be higher for the shoes when first released, but as they become part of the end of season range – much like remnant inventory – then they might be sold by factory outlets at a cheaper rate than when first released to the consumer.

Throughout this process Nike would have had a very sophisticated sales strategy in place. The same principle needs to apply to the digital publishing landscape. Publishers must develop excellent appealing packages and justify how and why their online inventory is better, and at a higher CPM – and all the while always demonstrate the value to advertisers.

Once the mix and structure is in place it needs to be optimised. In the case of a newspaper website, it might find that its ‘Home’ and ‘Sports’ sections are premium areas, but through careful analysis it might also find out that its ‘Culture’ section gets a lot of web traffic and is a premium section too. It needs to act on this and change and increase yield as it goes along – always tweaking things to improve.

Focusing on the channel mix

Once the package mix has been developed, publishers need to consider the best channels to market, be it through direct sales houses, external sales houses, ad exchanges or ad networks. In most cases you’ll need to sell via multi-network sales channels, and what’s important is to ensure you tailor your strategy according to your brand, the readership and the business goals. Once developed it needs to be continuously evaluated and amended in order to optimise yield.

Measuring success

Publishers must be able to measure how all of these factors impact yield on a monthly basis. For example, if you change the package or channel mix, how does this affect things? Typically this is an area a lot of publishers fail in, because they do not have the right technology and skills in place to properly evaluate how yield is affecting the business’s bottom line.

So what is the best yield management strategy?

Unfortunately there is no straightforward solution when it comes to developing yield management strategies. Each publisher is different: it will have an audience that it will segment by and every optimisation solution will be different. With that said, there are two main extremes.

The one is to focus on inventory structure and packaging. In this scenario you strongly qualify and justify what you have to sell. If we turn back to our retail scenario, this would be like Rolex selling its watches from its flagship stores only. Where it would sell only its best range and restrict the sales channel to in-store purchases. Within these stores Rolex would offer an exclusive variety of watches and a service unlike any other. Apply this thinking to digital publishing and it’s all about restricting the sales channel and selling your best inventory directly to advertisers with value added services. Typically this is good for selling premium inventory.

If we look at the other end of the spectrum, you can also optimise using a mixture of channels ranging from ad networks, ad exchanges, and sales houses. The focus here is on who makes the most money for you, and is much like the example of selling Nike shoes. While this angle seems great and allows you to sell more inventory, it is also normally at a lower value – whereas the first extreme allows you to sell less, but at a higher value. In both cases what is absolutely crucial to remember is that it is the right combination of these strategies that helps you to effectively sell your inventory.

Technology also needs to be put in place to succeed

If we look at our Nike example again, we said it uses multiple sales channels to sell its running shoes. As a brand it has tonnes of information about when and how to sell and release new products. This information is gathered using sophisticated retail technology, and what it does is enable it to make informed decisions about who to release premium stock to and when.

This principle needs to follow suit in online publishing and publishers need to develop good information and reports about how their site is used. This is achieved by making sure your publishing outfit is set up with the right technology, which should include the right mix of ad servers, customer relationship management systems, web analytics and business intelligence solutions, as well as developing behavioural targeting strategies, optimising the use of ad networks and ad exchanges, and then integrating it to work together.

Throughout the entire process of yield optimisation what’s key is to design an overarching optimisation solution and then to implement it. Ideally your in-house team has the skills to do this, but if it doesn’t then it’s probably best to work together with an outsourced partner to help you get the right strategy and technology in place. There is a lot that can go wrong with poorly thought out strategies, but there is a lot more that can go right if the right kind of thinking and solution designs are implemented to help you grow your publishing brand.

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