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Weekly Roundup: Affiliate Commerce, Privacy Updates, and Publishers Vs Facebook.

Adtech Weekly
"In the dialogue we are having with Google, we are trying to figure out an appropriate monetization model that would work out in favour of both parties."

Summary

  • More publishers lean towards affiliate revenue after the pandemic. Digiday reports that 43% of publishers were not earning from affiliate commerce in 2020, the number has fallen to 34% in 2021. Using hybrid advertising and commerce deals, producing affiliate-based content, on-site publishing, are some of the many ways publishers are increasing their affiliate revenue.
  • The Australian ad market grew by 29.7% QoQ to reach $2,935 million in 2020. It’s also a 20.3% yearly growth. Video ads lead all the formats.
  • Insider has recently surpassed Buzzfeed, Huffpost, and Vice in terms of traffic. The CEO believes that a narrow focus and the emphasis on sustainability have fueled the growth.
  • FT-backed news website Sifted has introduced three membership programs. They include a monthly membership for £19, annual membership for £149, and a founding annual membership for £449 which includes access to the upcoming Sifted Pro intelligence briefing product. The content quality on the site has made the publisher confident about the move. 
  • Mozilla has launched another cookie-blocking feature to its browser. It’ll make third-party tracking difficult. Earlier it used to block a list of known trackers, this update can help to block unknown trackers as well. But the feature won’t be turned on by default. The user has to enable it from the browser’s settings.
  • Facebook comes in a truce with the Australian authorities after they agree to the company’s terms. Meanwhile, Indian publishers want Google to pay the publishers in the same way it is doing in Australia.

Latest Adtech Trends for Publishers

Affiliate Commerce:

The pandemic has shown us the importance of a diversified revenue. When the ad rates plummeted in 2020, other sources like subscriptions and affiliate revenue became the savior. As a result, more publishers are looking forward to their affiliate business. Digiday reports that 43% of publishers were not earning from affiliate commerce in 2020, the number has fallen to 34% in 2021. 

Affiliate commerce has its pros and cons for publishers. It’s a ‘set it and forget it’ business where you don’t have to worry much about anything once the links are placed. But some publishers can have a different view. Nilla Ali, SVP of commerce at BuzzFeed says, “You have to think like a retailer, and not every media company can wake up and start doing that.”

Commission rates for affiliates can range between 1%-20%, depending on the niche. To increase the revenue, publishers like SHE Media are selling combined packages of branded content and affiliate links to the clients. Using hybrid advertising and commerce deals, producing affiliate-based content, on-site publishing, are some of the many ways publishers are increasing their affiliate revenue.

IAB Australia Online Advertising Expenditure Report

The IAB Australia Online Advertising Expenditure Report (OAER) reveals the second consecutive quarterly growth in Australian ad spend. The market grew by 29.7% QoQ to reach $2,935 million in 2020.  It’s also a 20.3% yearly growth. Video ads lead all the formats with a 41% increase compared to the same quarter last year.

Australia Ad Spend

Takeaway:

Digital ad spend is on the rise all over the world and the trend will likely continue. But, the importance of a diversified revenue source remains important too. Affiliate commerce can be a great way to diversify. Study the different strategies implemented by other publishers, we do not recommend a ‘set it and forget it’ approach.

Strategies from Digital Publishers

Insider

Insider has recently surpassed Buzzfeed, Huffpost, and Vice in terms of traffic.

Insider Growth

How has a publication valued at $450m managed to outgrow its peers with almost $2 billion and $6 billion valuation? Insider’s CEO and co-founder Henry Blodget revealed his mindset to PressGazette, here are the highlights:

  • BuzzFeed and Vice want to become entertainment companies whereas Insider is focused on being a journalism company. Blodget believes that this mindset has forced them to build a model that was sustainable for journalism. 
  • BuzzFeed and Vice managed to raise hundreds of millions of dollars whereas Insider raised only $50 million in eight years. Blodget thinks that it is virtuous to have less money at your disposal. He says, “You have to focus and figure out how the business works in relatively short order, or you run out of money.” So, having smaller funds can make you think more about sustainability.

He also believes that there are huge opportunities for new outlets to thrive if they have a simple approach – pick a particular topic, and do it better than anyone doing it. 

Sifted

Sifted was launched in 2019 with European entrepreneurs and investors as its target audience. It is an FT-backed news website. Its co-founder said that Sifted was started with a sole focus on building its audience. At present, it has almost become a ‘must-read’ among its target audience. The site generates revenue with advertising, newsletter sponsorships, special reports, and webinars.

The publisher has added another revenue stream to its portfolio. Sifted has started offering a monthly membership for £19, annual membership for £149, and a founding annual membership for £449 which includes access to the upcoming Sifted Pro intelligence briefing product. Not all the content will be behind the paywalls and the newsletters will also remain free. But the publisher believes that its premium content will bring a stable and predictable revenue.

Takeaway:

Both Insider and Sifted understand the value of quality content. The promoters of Insider know that they can grow organically if they create better content than others. Similarly,  Sifted knows that its audience will be ready to pay if it has quality content. Every publisher should treat the content as the soul of the business. Improving the quality should be a continuous goal of the publisher.

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Adtech Privacy Updates

Total Cookie Protection

Mozilla has launched another cookie-blocking feature to its browser. It’s called Total Cookie Protection. It’ll be like a digital cookie jar for each site the user visits. Every website will be able to drop the cookie in the jar allotted to it. Only the respective website will have access to the jar. In short – no third-party tracking. However, non-tracking cookies won’t be affected by this feature.

Mozilla Total Cookie Protection

Source: Mozilla.org

This is not the first time Mozilla has introduced an anti-tracking feature. It already has the Enhanced Tracking Protection feature that blocks known third-party trackers. This feature is an attempt to ensure that no cookies can be used to track the user from site to site.

But the feature won’t be turned on by default. The user has to enable it from the browser’s settings. The third-party cookie is already approaching its end and Mozilla has a very small market share. So, it’s least likely that this update can have a huge impact on publishers.

CCPA’s impact on revenue

The CCPA had little to no impact on ad revenues, prices, or inventory, according to publishers who spoke with Digiday. GDPR had a way more effect on the revenue when compared with CCPA. The primary reason behind the difference can be due to the opting methods. While GDPR requires people to consent to data collection by opting in, it is much more convenient for CCPA subjects to accept cookies rather than to opt-out. Earlier, data from IAB reported CCPA-related opt-out rates of just 1-5%.

Publishers vs the Duopoly

The last week started with Facebook coming in a truce with the Australian authorities after the news-ban stunt. The event proved that Facebook has the upper hand in the battle between the tech giants and the publishers. The government had to make amendments to the law that exempt Facebook if it can broker enough deals with publishers.

Facebook didn’t want the involvement of a third-party as an arbiter between the company and the publishers. The amendment allows Facebook to strike deals with publishers it chooses without any mediator. No matter how the events unfold in the future, the present situation is still better for the publishers.

Related Read: Facebook got everything it wanted out of Australia by being willing to do what the other guy wouldn’t

Meanwhile in India, the publishers have started their effort to repeat what happened in Australia. The Indian Newspaper Society (INS) is in talks with Google to strike a revenue-sharing deal for providing their content.

“In the dialogue we are having with Google, we are trying to figure out an appropriate monetization model that would work out in favour of both parties. Some publishers are also looking at working with the government for legislative support on the same. At INS, we are hopeful that Google we’ll see the matter professionally and we can settle it with them amicably.”

Mohit Jain, Vice-President, Indian Newspaper Society (INS)

Moments that Matter

Virginia Passes Data Privacy Law – ACA International.

Canada vows to be next country to go after Facebook to pay for news – Reuters.

Facebook strikes last-minute deal with Australia around news content – Axios.

Spotify announces ad network in push to monetize the audio-only market – Ad Age

Automatad Team

At Automatad, we help publishers to monetize better without hampering the user experience. Our products are live across hundreds of publishers, earning them incremental ad revenue with every passing second. You can request a free audit to get an estimated revenue uplift today.

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