DPG Media will no longer sell ads for news and entertainment apps in the open market of programmatic auctions, where ad prices fluctuate in real time, similar to the volatile stock market.
Starting next month (November 1), advertisers will have to buy ads directly from publishers if they want to run ads in apps. You can use an ad tech vendor like The Trade Desk or use DPG’s own advertising manager. This allows you to organize, manage and optimize campaigns across a publisher’s real estate. This includes HLN and VTM in Belgium, the Netherlands and Denmark.
However, choosing the latter is important if you want access to DPP’s custom ad formats, which publishers claim deliver the best performance.
“We are seeing a growth in our own sources of demand in apps where there is still little room for the open market to enter,” said Stefan Havik, the company’s chief digital officer.
He’s not the first publishing executive to take this direct-to-consumer approach to bringing in ad tech under the likes of Bloomberg Media, and he certainly won’t be the last. While the benefits are undeniable, the drawbacks of something like DPG are all too obvious.
First, relying on public auctions means partnering with ad tech companies to attract advertisers. This can potentially reduce page load times, as the bidding process requires multiple data exchanges and ad placements to load simultaneously. The result is a frustrating site, and slow pages not only disengage readers, but also jeopardize advertising revenue. In particular, low view rates and short user sessions can limit the effectiveness and revenue potential of your ads.
These concerns are widely acknowledged by other publishers, but remain theoretical concerns as DPG has not yet abandoned the auction. Nevertheless, this change is by no means unfounded. It is rooted in harsh reality. The public market is no longer very profitable for DPG’s in-app advertising.
Notably, more than half (60%) of the revenue the company earns from these apps comes from proprietary ad formats purchased through Ads Manager. Yes, these ads are expensive, especially more expensive than general market ads, but they perform better. As Havik pointed out, advertisers are willing to take on the challenge and choose quality over cheaper alternatives.
He added: “We are now at a point where our income is low and we can consider discontinuing the service.”
Revenues are small enough that any losses immediately following this transition are expected to be offset by aggressive sales strategies, making this a low-risk move for publishers. In fact, the risk was so low that it took executives only five minutes to consider the decision, Havik said.
However, the situation is different when it comes to in-browser ads. Advertisers are not yet buying enough through DPG Ads Manager to justify a similar transition. However, Havik believes that by 2026, the situation will change.
When that moment arrives, DPG’s ad tech will gain even greater leverage over independent ad tech intermediaries in the local market. You no longer need to rely on these intermediaries to sell your ads. Not only will DPG increase its profits by increasing its own advertising revenue, it will also have more control over the types of advertisers associated with its content.
Selling advertising on its own terms is a work in progress for DPG. It started a few years ago with a data platform that unifies all of your audience data and serves as a privacy-compliant way for advertisers to overlay their own data. Last year, the publisher took another step by launching an ads manager. This ad buying platform gives marketers access to a more widely available and more stable version of their unique identifier. This identifier forms the backbone of the transaction ID used when assembling campaigns in DPG’s premium advertising inventory. Typically accessed through private marketplace transactions.
In other words, for publishers to go it alone, they need the influence that DPG has in the local European market. Here, the publisher’s reach is comparable to larger, more ubiquitous platforms. For example, across the company’s 35 media brands, it reaches more than 9 Flemish people aged 15+ every day.
“Publishers don’t wake up one morning and decide to exit the public market,” said Alessandro De Zanche, founder of media consulting firm ADZ Strategies. “This is something that publishers are working on strategically, especially when more than half of their audience is logged in, as well as taking a position on identity and its value within their own ecosystem. Technology implications, costs and opportunities must also be considered.”
Bloomberg certainly took a strategic approach when it made a similar move early last year. At the time, publishers stopped bidding on the open market for display ads on their sites and mobile apps. Adexchanger reports that he hasn’t had any regrets since then. However, this does not mean that the possibility of a future reversal has been completely ruled out. This will require a major rethinking of how this form of programmatic advertising is implemented.
