Time for Publishers to Unite: Reclaiming Control in the Digital Advertising Ecosystem

In the intricate web of digital advertising, publishers are grappling with a system that seems stacked against them. Large technology companies have huge dominance on the ad market controlling how we serve ads, collect data, display the results and so on. As they are taking the lion share from the market and most new money is moving towards these players, they can always be one step ahead.

A stark illustration of this imbalance is found in a 2020 study by the Incorporated Society of British Advertisers (ISBA) and PricewaterhouseCoopers (PwC), which revealed that publishers receive only 51% of advertiser spend in programmatic advertising. Even more alarming is the fact that around 15% of the spend remains unaccounted for, lost in the complexity and opacity of the supply chain.

While the 2022 study shows that there are signs of improvement. From 57%* to 65%, then most publishers still feel that the cut taken is rather increasing than declining. As there are more players coming constantly to the market.

*note that the 2022 study excludes agency fees, verification tools and ad serving; so to allow direct comparisons, our 2020 results must be restated as follows: unknown delta 15% restated to 17%; publisher net revenues 51% restated to 57%.)

At the heart of this issue lies the overwhelming dominance of tech giants, most notably Google. The company controls a significant share of the global market in both publisher ad servers and advertiser ad networks. Estimates suggest that Google's ad server, Google Ad Manager, is used by over 90% of large publishers worldwide. On the advertiser side, Google's platforms like Google Ads and Display & Video 360 capture a substantial portion of ad spend, consolidating control over both ends of the digital advertising spectrum. This near-monopoly allows Google to dictate terms, control pricing, and maintain a tight grip on the flow of data and revenue within the ecosystem.

This hidden cost is not just a number—it's a symptom of a fragmented system where the true value of publishers' content is siphoned away by layers of intermediaries. Ad tech vendors, data management platforms, and various middlemen each take a slice of the pie, leaving publishers with a fraction of the revenue their content generates. This inefficiency not only erodes publishers' revenues but also undermines trust in the digital advertising ecosystem.

Yet, amidst these challenges, there are encouraging signs of change. Publishers around the world are beginning to recognize the power of collaboration. In the UK, The Ozone Project stands as a testament to what can be achieved when publishers unite. Major media outlets like The Guardian, News UK, and The Telegraph have joined forces to create a unified advertising platform. This initiative offers advertisers direct access to premium inventory, bypassing intermediaries and ensuring that a greater share of ad spend reaches the content creators.

Similarly, in France, the Skyline Project has seen leading publishers such as Le Figaro and Le Monde collaborate to establish a unified marketplace for programmatic advertising. These joint ventures not only streamline operations but also enhance negotiating power with advertisers, enabling better terms and increased transparency.

Despite these efforts, the dominance of walled gardens continues to loom large. As of 2023, giants like Google, Facebook (Meta), and Amazon control approximately 70% of the global digital advertising market. These platforms operate closed ecosystems where they dictate the rules, control data flow, and limit transparency. They accumulate vast amounts of data and inventory, leveraging it to generate immense profits.

Ironically, it's the publishers who are feeding these giants. By providing valuable content and engaging audiences, publishers supply the raw materials that fuel the walled gardens' advertising engines. These platforms collect and analyze user data from publisher sites, enhancing their targeting capabilities and making their ad offerings more attractive to advertisers—all while publishers receive a minimal share of the resulting revenue.

Adding to the challenge are the hundreds of small companies that inhabit the middle of the ad tech supply chain. Each one takes a percentage of the ad revenue—sometimes just fractions of a cent—but collectively, they significantly diminish the revenue that reaches publishers. This myriad of intermediaries complicates the supply chain, increases costs, and further reduces transparency.

An often overlooked but critical issue exacerbating the inefficiencies in the digital advertising ecosystem is the prevalence of fake or fraudulent websites. These are sites designed to mimic legitimate publishers but are actually part of sophisticated schemes to siphon off advertising dollars without delivering any real value to advertisers.

According to a 2019 report by the Association of National Advertisers (ANA) in collaboration with White Ops, ad fraud was projected to cost advertisers $5.8 billion globally that year. While efforts to combat ad fraud have made some progress, the issue remains a significant drain on advertising budgets. The World Federation of Advertisers (WFA) warns that if current trends continue, ad fraud could become a $50 billion problem by 2025.

These fake sites employ bots and automated scripts to generate fraudulent impressions and clicks, making it appear as though ads are being viewed and engaged with by real users. This not only wastes advertisers' money but also skews performance metrics, leading to misguided strategies and further financial losses. The complexity and opacity of the digital ad supply chain make it difficult to detect and prevent such fraud, especially when numerous intermediaries are involved.

The impact on legitimate publishers is twofold. Firstly, ad spend that could have supported quality content creation is instead diverted to fraudulent entities. Secondly, the overall trust in digital advertising diminishes, causing some advertisers to reduce their investment in programmatic channels altogether. This loss of confidence hurts publishers who rely on advertising revenue to fund journalism, entertainment, and other forms of content that audiences value.

The outcome is a digital advertising landscape where publishers are, in effect, subsidizing the growth of large tech companies. The billions earned by these platforms are reinvested into improving their own products and services, expanding their reach, and strengthening their market position. Meanwhile, publishers are left to shoulder the costs of content creation, journalism, and storytelling—the very elements that attract audiences in the first place.

Building a Unified Platform for a better Digital Advertising Future

The solution to these challenges lies in unity and collective innovation. Digital publishers should come together to form a collaborative body, open to all who wish to join. This consortium would be funded by its members contributing a specific percentage of their ad revenue—a figure that would undoubtedly be smaller than the 50-70% currently lost to large ad tech players. This investment isn't merely a cost; it's a strategic reallocation of resources that would empower publishers to regain control over their revenues and data.

Investing in Our Own Ad Server

The pooled funds would be dedicated to developing and maintaining a state-of-the-art ad server platform. By owning the technology, publishers can ensure it is tailored to their needs, prioritizing transparency, efficiency, and fairness. This platform would serve both the supply and demand sides of the market, making it the best ad server for publishers and advertisers alike. With direct input from its users, the platform could rapidly adapt to industry changes, incorporate cutting-edge features, and set new standards for performance and reliability.

Currently, publisher-side platforms are often underinvested, with individual publishers lacking the resources to develop and maintain cutting-edge technology on their own. This underinvestment leads to a reliance on third-party solutions that may not fully align with publishers' interests. By collaborating and pooling resources, publishers can overcome these limitations. A non-profit organization dedicated to the platform's development could amass a larger pool of resources, ensuring that it operates optimally and remains at the forefront of technological advancements. Operating under a non-profit model would also mean that the platform's primary focus is on serving the needs of its members rather than generating profits.

Importantly, this initiative doesn't aim to eliminate existing ad tech players. Instead, it envisions creating an open, collaborative ecosystem similar to how WordPress functions with its extensive library of plugins and extensions. By establishing a marketplace for extensions and integrations, third-party ad tech companies can contribute their innovations to the unified platform. This approach allows for flexibility and customization, enabling publishers to enhance their capabilities while maintaining control over the core infrastructure. It also makes the unified platform a more attractive option for all stakeholders, fostering a vibrant community of developers and service providers who can add value without compromising the platform's integrity.

Establishing a Shared Identity System

A critical component of this unified platform would be the creation of a shared identity system. This system would form the backbone of a proprietary Data Management Platform (DMP), enabling publishers to manage and leverage user data collectively while respecting privacy regulations. By pooling data, publishers can enhance targeting capabilities, improve ad relevancy, and compete more effectively with the walled gardens that currently dominate user data collection.

As many publishers are moving toward subscription models, they are accumulating significant amounts of first-party data. This wealth of information provides valuable insights into user behaviors, preferences, and demographics. By collaborating, publishers can safely pool this data to create market-wide audience segments that can help them gain market share. These comprehensive segments would enable publishers to offer advertisers targeting options that are as precise and effective as those provided by the dominant platforms.

Pooling data in a secure and privacy-compliant manner ensures that the new platform utilizes accurate and reliable information for targeting advertisers. This collaborative approach not only strengthens individual publishers but also lifts the boats of all market players. By leveraging shared data assets, publishers can enhance campaign performance, increase advertiser satisfaction, and promote a more balanced digital advertising ecosystem where everyone benefits.

Taking Control of Analytics and Attribution

In addition to the ad server and DMP, the consortium would develop a joint analytics platform. This tool would empower publishers to take control of the attribution model, providing deeper insights into how their platforms are performing. By understanding the user journey across different publisher sites, members can offer advertisers more accurate and actionable data, leading to better campaign outcomes and stronger advertiser relationships.

Currently, many platforms use attribution models that may not fully reflect the contributions of publishers. For instance, some social media advertising platforms employ view-through attribution, where a conversion is credited to an ad impression even if the user did not click on the ad but made a purchase within a certain time frame—often within 24 hours of viewing the ad. While this method captures the influence of ad impressions, it can sometimes overattribute conversions to platforms based solely on ad views, potentially undervaluing the role of publishers and other channels that contributed along the customer journey.

Similarly, the reliance on analytics tools like Google Analytics can influence how marketers perceive performance across different channels. Google Analytics is a widely used platform that offers various attribution models, but by default, it may prioritize last-click attribution, which credits the final touchpoint before a conversion. This can inadvertently favor certain platforms or channels, such as paid search ads served through Google's network, and may not fully account for the earlier interactions users have with publisher content.

By developing a unified analytics platform, publishers can establish more nuanced attribution models that accurately reflect their contributions to conversions. This platform would provide transparency into the entire user journey, capturing interactions across multiple publisher sites and touchpoints. Advertisers would gain access to holistic insights that acknowledge the value each channel brings to a campaign, enabling them to make more informed budgeting and strategy decisions.

Empowering publishers with control over analytics and attribution ensures that they receive appropriate recognition and compensation for their role in driving conversions. It also promotes a more equitable advertising ecosystem where success is measured accurately, and investments are allocated efficiently. This collaborative approach would not only strengthen relationships between publishers and advertisers but also enhance the overall effectiveness of digital advertising campaigns.

Creating a Unified Ad Template Platform

To further streamline operations and enhance advertising effectiveness, the collaborative would introduce a unified ad template platform. This shared resource would be continuously developed and updated, ensuring compatibility and ease of use across all member sites. By leveraging our combined resources, we could develop a system that checks if advertisements meet technical standards, ensuring they function properly and provide a seamless user experience.

Beyond technical validation, the platform would offer data-driven recommendations on which advertisements are performing best across publisher sites. With access to a vast, aggregated data pool much larger than any individual publisher possesses, we can analyze trends, engagement metrics, and user responses to various ads. This collective insight would enable publishers to optimize their ad strategies, selecting formats and content that resonate most effectively with their audiences.

Importantly, this unified approach would not only prevent the infiltration of fake or malicious advertising but also enhance the overall quality and trustworthiness of the digital advertising space. Advertisers would benefit from improved campaign performance and more accurate targeting, while publishers would see increased revenue and user satisfaction. By collaborating on this platform, we elevate the standards of digital advertising and ensure that all participants share in the success it brings.

Conclusion: A Unified Path Forward

Today, digital publishers often operate in silos, viewing each other strictly as competitors while the majority of ad revenue flows into the coffers of large ad tech providers. This fragmented approach has weakened the industry's collective bargaining power and allowed intermediaries to exploit the situation to their advantage.

This system is untenable and, if left unchecked, will lead to further revenue erosion in the coming years. We must act now to initiate change. By uniting, publishers can create a robust, transparent, and efficient ecosystem that benefits all stakeholders. A unified solution would not only increase our ad revenue but also help us combat fake advertising, retain control over our data, and enhance our analytics capabilities to deliver superior results.

The time for isolated efforts is over. The challenges we face are too significant for any one publisher to overcome alone. By embracing collaboration, we can reshape the digital advertising landscape to one that values and rewards the true creators of content. This isn't just about survival; it's about empowering publishers to thrive in a fair and equitable market. Together, we can build a future where quality content and ethical advertising coexist for the benefit of all.

Note: This article was originally written by me and rewritten by ChatGPT to increase the readability.