Programmatic ads pose challenge for Web publishers

"Many [online] advertisers now care more about who sees their ads than where they appear," writes the Columbia Journalism Review's Steven Waldman in a column about the threat posed to Web publishers by programmatic (automated) ad buying.

Whereas a drug developer might have previously bought ads on popular health sites to reach potential customers, it can now use programmatic campaigns to reach them across the Web, aided by cookies that track when a user has shown an interest in particular drugs (or something related to them).

The upshot? Advertisers are less likely to pay a big premium for inventory on high-profile sites. Waldman: "A marketer can now reach 'New York Times readers' without ever actually advertising in The New York Times, and for less money."

Publishers are responding in part by embracing native ad formats such as sponsored content. But as Waldman observes, a site's image can get hurt when users conflate sponsored and organic material. "Publishers have ended up trading the one thing they had left—their credibility with readers—for a few scraps of CPM."

Yahoo (NASDAQ:YHOO), increasingly using native ads to complement traditional display ads, saw a 24% Y/Y drop in display ad prices in Q2 to go with a 24% increase in ads sold. AOL, both a publisher and a programmatic ad tech provider, fared a little better in Q2.

eMarketer expects U.S. real-time bidding ad spend (a key part of the programmatic market) to rise to $9B in 2017 from $3.4B in 2013. At the same time, it observes many advertisers are treading cautiously for now.

Other Web publishers: IACI, DMD, TTGT, GKNT, WBMD

Ad tech firms with programmatic exposure: CRTO, FUEL, RUBI, MRIN, TRMR, YUME, TUBE

From other sites
Comments (8)
  • Equitable Research
    , contributor
    Comments (2250) | Send Message
    This is definitely the bottom of ad tech stocks. Damned if you do and damned if you don't. Programmatic is now bad and so is not being programmatic. So basically all ad tech is bad now. This is capitulation.
    9 Aug 2014, 09:39 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1601) | Send Message
    It is nice to see those websites get payback after littering your browser with cookies. If the new york times did not leave cookies on your browser, perhaps other sites would not know that I had visited the new york times and they would not be able to take their ads.
    9 Aug 2014, 09:55 PM Reply Like
  • RipCrackle
    , contributor
    Comments (122) | Send Message
    You have no understanding whatsoever of what cookies are or how they work.
    10 Aug 2014, 09:58 AM Reply Like
  • Urbannek
    , contributor
    Comments (1517) | Send Message
    I am an independent web publisher of content. Thank-you for covering this.
    These is ls a lot of inventory coming online from Twitter and Facebook which is impacting online advertising. Also private equity had entered the space which also impacts independent sites and their publishers.
    10 Aug 2014, 02:18 AM Reply Like
  • sunnypt
    , contributor
    Comments (294) | Send Message
    Forget cookies. Facebook users provide advertisers with all the demographic info they need when they describe themselves. It's just as easy to reach New York Times readers with a FB ad. Small businesses like mine have been able to cut out traditional media... newspapers and radio, to buy, at a fraction of the price, ads on the internet providing better results.
    10 Aug 2014, 06:09 AM Reply Like
  • Equitable Research
    , contributor
    Comments (2250) | Send Message
    This news post and some of the comments illustrate the market's lack of understanding of ad tech. 4 of the companies mentioned as programmatic ad firms don't even have programmatic offerings that produce a material amount of revenue and one is an SaaS and irrelevant to the discussion. Those who know the space will know what I am talking about. Those who don't will continue the misunderstanding based selloff.
    10 Aug 2014, 10:28 AM Reply Like
  • forthetimebeing
    , contributor
    Comments (35) | Send Message
    This should be good news for the companies offering the programmatic approach to advertisers, such as TRMR.
    10 Aug 2014, 06:38 PM Reply Like
  • Hendershott
    , contributor
    Comments (1842) | Send Message
    FUEL, CRTO, RUBI race to the bottom in a commoditized industry?
    10 Aug 2014, 10:10 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs