THE BLOG
09/29/2015 10:29 am ET Updated Dec 06, 2017

Publishers Will Need Independent Tech to Level Playing Field

By Kirk McDonald, President PubMatic

2015-09-29-1443536942-7579326-KirkMcDonald_1_R_sm.jpgGoogle, Facebook and Twitter - Are they media companies disguised as technology companies?

This question has been debated in the publishing world for several years with no shortage of industry conversation devoted to the topic. The unofficial consensus seems to be that they straddle both worlds and have, in fact, become "frenemies" to publishers. And, as long as they continue to introduce technology to advance their media interests, they will continue to cause friction in the media landscape - both good and bad.

eMarketer projects that Google, Facebook and Twitter will grab $11.68 billion of digital U.S. display advertising market in 2015 representing about 43% of the entire market. Even if these three are not exactly "media companies" they are competing for the same revenue as publishers. So the debate is academic at this point.

The publishing community needs to stop debating how to categorize these tech giants and instead focus on examining their own business needs. In 2015, every successful media company requires scalable and independent technology solutions to compete on this playing field and to manage its revenue growth strategically.

During the last five years, publishing has changed to a degree that no one could have anticipated. Although the core fundamentals of the business - monetizing and managing the relationship between consumers, content and services - remain intact, the means have changed completely. Premium content is no longer the failsafe recipe for success that it was for publishers for decades. Instead, technology and data are upending the monetization strategies that publishers have relied on for so long.

Whether it's data about consumers or data about how advertisers value inventory and audiences, successful publishers must transition to this new real-time world to remain competitive. That transition means retooling and rethinking the skillset of the publishing workforce. It also requires state-of-the-art technology solutions that are not only developed to enable publishers to compete today, but also are designed to anticipate the seismic changes that occur with each passing quarter. They need holistic inventory management platforms that offer real-time analytics.

Publishers now require marketing automation technology that will enable them to manage their sales, pricing and packaging, and go-to-market efforts strategically and at scale. This means automating the publisher's marketing value chain. This includes everything from identifying a new buyer, qualifying that buyer, nurturing buyer relationships, executing a sale and identifying future opportunities to upsell and cross sell. Obviously, these are not new concepts to publishers. However, doing them successfully millions of times a week and in real-time is only possible when enabled by technology.

As publishers embrace this challenge, it's imperative that they choose the right technology partner. Clearly, the major Internet tech giants and ad exchanges have built monetization solutions that they are offering gladly to the publisher community. The appeal of the tech giants and ad exchanges as technology partners is obvious: they offer publishers a turnkey way to scale with minimal internal investment. However, does easy today come at a cost tomorrow?

Quietly, many publishers are becoming increasingly skeptical of the idea that the tech giant's long-term business goals align with their success. This has been the major subtext of the debate about whether they are media companies disguised as technology companies. At the same time, the ad exchanges, more accurately described as branded marketplaces, are focused on creating liquid markets and are making clear investments to bolster their own internal functionality to drive to that end. These marketplaces are no more invested in a publisher's success than the NASDAQ is invented in the success of a particular mutual fund that makes trades on its exchange.

As publishers look for partners to help them to maximize the value of their own assets, many have prioritized their long-term strategic goals and have made the choice to work with truly independent partners. This is the kind of obvious business decision that companies make every day. However, when an established industry completely changes over just a handful of years, it's the type of detail that can get lost as a business scrambles to adapt.

There is simply no successful case study available that provides a blueprint of exactly how to reinvent a premium publishing company into a world-class media and technology operation. This effort in change management is a high wire act for most publishers. The marketplace's quick and relentless shift to a world that demands software to execute strategy is making it a necessity, and it requires marketing automation technology that provides choice, independence and control.

So it's time for publishers to stop asking, "Are Google and Facebook media companies or tech companies?" and start asking themselves, "How am I using technology to build the media company of the future?"