Making a Case for Programmatic

The Google Ad Revenue Lab helped turn two hyperlocal programmatic-averse publishers into forever fans.

Most hyperlocal publishers depend heavily on direct sales from advertisers within their communities. While this can be a strong revenue driver due to (usually) higher CPMs for established publishers, it can also fluctuate more than other revenue streams in terms of filling ad inventory, making it hard for organizations to maintain a stable revenue stream to support or expand day to day operations. The Long Beach Post was no exception, leaving an average of over 150k impressions unfilled week over week. 

Many publishers avoid programmatic to keep their site from feeling “spammy” or irrelevant, or based on the assumption that it will never pay out enough to be worth the effort of setting it up and managing it. Lack of quality control among programmatic is another big hesitation among small publishers, which sparks the fear of potential devaluation of their product and brand.

Through this lab, the boost in revenue after enabling a programmatic network (in this case, the Ad Exchange within Google Ad Manager) allowed the publisher’s initial hesitations to ease. The controls within Ad Manager provide opportunities to “weed out” undesired creative and advertisers, as well as set price floors to control the quality of the ads. AdSense is an alternative option, and provides similar blocking controls to Ad Manager.

Programmatic Doesn’t Have to Be All or Nothing

The Long Beach Post and Oil City News took different routes with their programmatic strategy — one runs programmatic in competition with direct, and the other purely as a backfill solution. 

The way Oil City News sells direct is on a sponsorship basis, rather than by impressions, guaranteeing 100% share of voice over specific inventory for a set amount of time. However, their advertisers all have one requirement in common: they only want to hit in-state users. Because Oil City News has a broad out-of-state reach, that leaves many impressions going unfilled and unmonetized month over month. For this reason they choose to run programmatic solely as a backfill solution to users outside of Wyoming (inventory that direct advertisers did not wish to buy), which makes up about 40% of total ad impressions. Having a programmatic solution in place allowed that 40% to now become profitable, earning an average of $1,000 in new/additional monthly revenue. 

The Long Beach Post sells their inventory on an impression basis, allowing them to take advantage of dynamic allocation, or in other words, run programmatic alongside direct in a way that increases revenue opportunity without risking the delivery goals of direct campaigns. With this strategy they are able to ensure as many impressions as possible have the opportunity to be filled and monetized at the highest CPM value. Prior to implementing Ad Exchange, Long Beach Post saw an average of almost 50% of their impressions go unfilled every month. Now with a programmatic solution in place, unfilled impressions are less than 8% of their total impressions and they are earning an average of $2,000 a month in new revenue.