Curators play a growing role in the ad ecosystem, but what does that mean for publishers? Jeremy Gan, SVP of Revenue & Data Operations at Daily Mail, breaks down how curators operate, their financial models, and the challenges publishers face in maximizing their revenue while maintaining control over their inventory.
Curators have emerged as key players in the advertising ecosystem, offering a valuable service by simplifying the complexity, particularly as the industry grapples with signal loss due to cookie deprecation. Publishers aiming to maximize their inventory’s reach often find curators helpful in achieving this goal. However, the current curator model also poses challenges for publishers.
How Curators Operate
Curators primarily serve supply-side platforms (SSPs) as intermediaries between publishers and advertisers. They aggregate and organize ad inventory from multiple publishers, making it easier for advertisers to reach their target audiences at scale. Curators’ core function is facilitating ad deals by connecting publishers with advertisers, ensuring efficient and effective ad placements.
Curators utilize various technologies, such as programmatic platforms and data analytics, to optimize ad campaigns and maximize revenue for both publishers and advertisers. By partnering with curators, SSPs can streamline their operations and gain access to a curated inventory of publishers, simplifying the process of matching advertisers with relevant audiences.
The Financial Model
Curators typically operate on a revenue-sharing model, taking a cut of the advertising revenue generated through their platform. This financial arrangement incentivizes curators to prioritize ad campaign performance and optimization. In addition to curators’ revenue share, SSPs may take an additional cut (via OMP rev-share instead of the typical PMP revshare), reducing the publisher’s share.
In some cases, curators develop a direct relationship with publishers to curate their inventory and meet their marketing goals. Through various platforms, curators can reach an advertiser’s intended audience and contextual segments while taking their cut based on a publisher’s PMP rate card.
Impact on Publishers
The emergence of curators has had a mixed impact on publishers. While curators offer publishers access to a broader pool of advertisers and simplified ad management, they also introduce additional intermediaries into the advertising supply chain. A curator’s primary goal is to act in the best interest of the advertiser, which may not always align with the interests of the publishers, resulting in decreased revenue for publishers.
Consequently, publishers face challenges in negotiating fair terms and ensuring that their inventory is valued appropriately when there is a direct relationship with the curator. However, that direct relationship doesn’t always exist. Sometimes, a publisher may not have insight into how a curator uses their inventory, which leads to a need to build trust between publishers and curators. The reliance on curators for publisher discovery can limit publishers’ ability to establish direct relationships with advertisers, reducing their control over their inventory and revenue.
How We Got to This Point
As publishers push SSP for “unique demand” through the years, SSP’s sales teams are setting up always-on Deal IDs with advertisers to ensure said SSPs are competitive within a publisher’s ad stack. As part of that initiative, publishers have, over time, opted into all these SSP-sold Deal IDs as long as they drive increased revenue.
These SSP-sold Deal IDs typically compete with the Open Market and help drive yield. With the rise of Curation, Curated Deal IDs naturally become part of these deals. SSP invites curators onto their platform with open arms by providing the curator with a newly created “curator’s seat” because these demands brought on by curators are net-new demand. Any time SSP has additional demand, SSP becomes more competitive in a publisher’s ad stack. When SSPs are more competitive, they get paid more!
Addressing This Issue
Before establishing a direct relationship with a curator, publishers should consider conducting thorough due diligence to understand their operations and the incremental value they offer fully. This process involves comprehensively assessing the curator’s business model and revenue sources, carefully evaluating their technology and data capabilities, and clearly understanding their relationships with advertisers and publishers.
Publishers must ensure curators do not cannibalize their existing revenue streams. This can be done by setting clear expectations with curators about the types of inventory they have access to and the pricing they will receive, monitoring curator sales to ensure they are not undercutting the publisher’s direct sales efforts, and having a plan in place to address any negative impacts on existing sales.
How to Drive Impact
Like any new initiative in programmatic, transparency is the key to creating trust. More specifically, transparency in reporting from an SSP will allow publishers to understand how much of their inventory is being opted-in to curated deals and the overlap between the publisher’s sales team versus curated deals to ensure that the publisher’s inventory has a cohesive pricing structure across the board.
Strategically, publishers should be more open to working with curators to fill the gaps their sales team won’t cover—ie: specific advertiser categories, audience segments lacking scale, etc. With programmatic as a form of transaction maturing bringing the buy and sell side closer than ever before, it is pivotal that as an ecosystem, there are concerted efforts to bring more value to the marketplace through working media instead of having more middlemen profiting from publisher’s revenue. Having transparency in reporting and exposing all the fees taken as a result of data, targeting, and measurement preserves the integrity of this initiative.
Publishers who choose not to partner with curators should take proactive measures to mitigate potential negative impacts on the open market and PMP rates. These measures can include increasing their own investment in programmatic technology and data capabilities and partnering with other publishers to create a consortium that can negotiate with curators on more favorable terms. By taking these steps, publishers can ensure that they make informed decisions about working with curators and protecting their existing revenue streams.
It’s important to remember that the relationship between curators and publishers is rapidly evolving and continually in flux. New curators have recently popped up, offering targeted solutions based on modern metrics, DV/IAS, and even publishers’ carbon emissions. We must continue evaluating what is and is not working in charting a best-case forward.