Monetizing Digital Editions: Can Auto-Served Ads Work?
Can auto-generated ads really move the needle in digital editions?
As adoption of digital editions grows, so too do the attempts to monetize those editions.
The publishers of Used Boat Watch, a new buyer’s guide published on the Blue Toad platform, said the digital edition is generating just shy of $1,000 per page on its listings and that advertisers seem to be willing to pay about 10 percent of what they pay for print ads.
Another digital magazine platform, iMirus, is rolling out iMirus Dynamic Ads, a service that automatically serves ads from online ad networks into the digital edition, potentially creating additional revenue for the publisher.
The program is generating interest among iMirus clients, but other vendors in this space claim to offer similar services and question whether the CPMs and type of ads generated by an auto-serve system are worth it for publishers.
How it Works
The iMirus Dynamic Ads program delivers advertising to digital editions in three ways: IAB-compliant ads can be pulled from ad networks and placed in the digital edition; ads can be pulled from the publisher’s Web site and delivered to the digital edition via an invocation code that determines placement; and publishers can upload ads directly into iMirus’ AdBox server. The dynamically served ads can run as a leader board on top of a page within the digital edition or flow directly into a new page.
For ads culled from ad networks, iMirus splits a revenue percentage with the ad network and then shares 50 percent of the remainder with the publisher. For ads sold by the publisher and then either pulled from the Web site or placed directly into AdBox, iMirus takes a $2.00 CPM service charge. “Publishers may ask, ‘If I’m selling the ad, why should I share the revenue?’” said president and CEO Chris Riggs. “We’re providing a vehicle to extend more ad impressions that the publisher otherwise wouldn’t have.”
So far, iMirus has one client—Business Traveler—committed to using the Dynamic Ads program with its next issue with interest from others.
What About CPMs?
Other vendors in the hyper-competitive digital magazine space say they offer similar services for auto-served ads but advise publishers to be aware that the CPMs generated with auto-delivery aren’t typically impressive and that they should instead focus on package buys, sponsored issues and ads sold directly into the issue.
“IAB or other sized ‘inserted ads’ are another way to increase revenue and we
offer this too,” said Cimarron Buser, Texterity’s senior vice president of marketing and business development. One of Texterity’s clients, Driver’s Republic, features IAB ad units served inside the digital edition; another, Chain Store Age, has ads served “around” the digital edition with IAB units such as leaderboards and skyscrapers. “But the CPMs are typically lower,” Buser said. “If you get a $10.00 CPM with a dynamically served ad, I’m impressed. If it’s $1.00 or $2.00, I’d say that’s more like it.”
Nxtbook has demoed similar technology in its media kit but questions whether dynamic ads are a good fit for publishers. “The ad network medium is one that relies on CPMs, yet the one area where digital magazines usually fail against Web sites is in CPMs,” said Nxtbook marketing director Marcus Grimm. “Digital magazines deliver engagement time and click-throughs better than Web sites, but not CPM’s. It’s like putting snow tires on a Ferrari and wondering why it doesn’t perform in the snow. We do have many publishers that are curious about using the technology, but they want to use it for their own niche advertisers so they can charge premium rates and track the ads. Giving up that space to an ad network is a great way to give up ‘digital dollars’ for ‘digital dimes,’ in my experience.”
Riggs said there is a big difference between the earning potential of ads pulled from networks and those sold directly by the publisher. “CPMs for ads from the ad network are most likely between $1.00 and $5.00,” he said. “If the distribution of the digital edition is not that high, it won’t create the page impressions which create ad impressions that generate revenue. If you’re looking at a typical cost of say, $1,000 per issue, you would need a certain open rate and number of impressions to generate a high enough CPM to at least break even. But publishers that have the ability to sell bundled packages or sell directly into the digital edition should realize CPMs anywhere between $10 and $15.”
And that requires publishers to change the way they look at their digital edition, according to Riggs. “Most publishers look at their digital edition as a cost center when they should look at it as a profit center,” he said. “Some publishers really don’t know how to get their arms around the ad selling end of this. We’re trying to help provide a framework for what to sell and how to sell.”