Ad Monetization Strategy for New Video Publishers

A comprehensive ad monetization strategy is crucial for new video publishers as it directly impacts revenue generation. However, it comprises different elements requiring decision-makers' attention. From setting up programmatic pipelines to gradually onboarding and negotiating with demand partners and monitoring metrics, the list of associated tasks can become overwhelming.

These steps are necessary as industry newcomers usually face low inventory prices, limited ad impression opportunities, an unshaped reputation, and a lack of direct relationships with advertisers.

With 14+ years of experience in AdTech software development, we can assist with these issues and offer advice on creating a revenue-generating ad monetization strategy. Our article explores how your organizational structure helps achieve this objective. Read on to learn how to organize workflows and establish the proper hierarchy of roles and responsibilities.

What Is Ad Monetization Strategy and Why Do You Need It?

It goes beyond selling and delivering ads to users, which can be automated. Instead, the best ad monetization approach demands informed decision-making across various processes.

Besides, you will require a comprehensive approach to ad monetization, as success relies on completing multiple milestones simultaneously. Addressing only particular needs and ignoring others may result in inefficiency, either delaying revenue growth or extending the process.

For example, say you hire a dedicated sales manager to attract new demand partners or bring on board an AdOps specialist to monitor campaigns.

When these functions work in silos, it may result in disjointed efforts and inferior outcomes.

Here’s why:

• The sales manager brings in new partners, but only the input from the AdOps specialist on campaign performance and optimization strategies can help realize the potential revenue from these partnerships.
• Likewise, the AdOps specialist monitors and adjusts campaigns, but only the insights from sales regarding market trends and demand will help align efforts with the broader revenue goals of the business.

If the leadership doesn’t oversee task allocation and execution, has a limited understanding of ad monetization meaning, or needs to learn how to set up this process, the results may be difficult to achieve.

This example is one of many instances where a lack of alignment can lead to undesired outcomes. Further, it can be applied to all aspects of a publisher's activities that aim to increase revenue from selling advertising space.

Importance of Organizational Structure

How can you solve the problems of inconsistency of actions and, in some cases, even the absence of necessary expertise in your video publishing company? The short answer is establishing the right roles hierarchy within a dedicated department. 

First, you must consider creating an Ad Revenue department or reorganizing the existing department to ensure maximum efficiency. Typically, Ad Revenue is part of the high-level Revenue department. Alternatively, it can also exist independently and report directly to the Executive team. In this arrangement, a Vice President (VP) of Ad Revenue oversees the operations and ensures alignment with the company's overall revenue goals.

This department creates and optimizes ad-selling activities, from ad-supported revenue management to executing an effective ad monetization strategy. 

Secondly, you should carefully plan the divisional structure of such a department. This will enable you to achieve revenue goals from advertising sales on your video resource.

From our viewpoint, the most optimal structure for the Ad Revenue department should:

• ensure coordination and collaboration among different teams working on specific aspects of ad monetization;
• have a clear hierarchy of roles and responsibilities;
• include competent individuals proficient in their respective areas;
• address the business needs and consider all its specificities.

We propose the following hierarchy for structuring the ad monetization department. The organizational structure diagram below will help you visualize the distribution of roles and responsibilities:

Subdivisions within the Revenue Department

Monetization and Analytics

The Monetization and Analytics sub-department maximizes revenue potential through yield optimization from available revenue sources. Led by the Head of Monetization, this department maximizes earnings from partnerships and deals nurtured by the Business Development team. The Head of Monetization oversees various aspects, including:

Metrics.

In CTV/FAST advertising, attention is directed toward revenue generation from ad pods - commercial breaks of varying durations. The department seeks to maximize revenue potential by setting bid floors and determining optimal ad slot durations. Calculating revenue per second (RPS) helps estimate the profitability of different ad durations and bids.

Tracking Average Revenue per User (ARPU) provides insights into revenue generation per active user, which is essential for businesses investing in customer acquisition. You can make informed decisions and refine your strategy by closely monitoring ARPU alongside other metrics, such as CAC (customer acquisition costs), LTV (lifetime value), and churn. For instance, you might track the individual contribution to revenue from each active user or account.

Yield management.

With the help of yield management, you can implement various tactics to increase revenue from available sources. One way to do this is to monitor how many buyers and at what price contend for your inventory. 

Say you discovered your ad placement receives only four bids from low-paying media buyers. This situation can lead to the following outcomes:

• Your potential revenue will be moderate;
• Your potential demand partners will perceive your inventory as low in value.

So, once you’ve identified this challenge, the most optimal path is to start increasing competition for your available ad inventory. In other words, you’ll need to improve the bid density. 

To manage this aspect, it's important to implement regular monitoring. When you identify low levels, communicate this information to the Business development department. This enables them to put effort into expanding the demand partner network.

Ongoing monitoring also helps take proactive measures to improve yield from every available opportunity. It involves identifying the top-performing programmatic partners while phasing out underperforming ones.

Ad quality monitoring.

The Monetization and Analytics department must create comprehensive strategies against invalid traffic, incompatible/unsafe content, and low-quality ads. Taking robust measures against these threats, you can safeguard user experience, enhance trust with advertisers, and optimize revenue streams.

Here’s what your Monetization and Analytics department will do to reach those targets:

• Integrate IVT detection tools.
  IVT detection vendors like Human provide efficient CTV/FAST ad fraud interception mechanisms. Adding them to your list of integrations will help enhance your inventory's value and earn your demand partners' trust.
• Integrate creative review and approval.
  Platforms like SafeX provide the UI for publishers to review and approve video creatives. Overseeing this aspect will enable you to prevent the display of inappropriate content, avoid penalties from regulators, and present users with relevant and engaging content.
• Monitor ads.
  Monitoring ads enables you to understand the user experience and identify any potential roadblocks users may encounter throughout their journey.

The Head of the sub-department delegates these responsibilities to Data Science and AdOps leads:

• A Data Science lead appoints data scientists and data analysts to be responsible for the implementation of the identified yield optimization tactics.
• An AdOps lead assigns subordinate AdOps specialists to onboard and maintain direct campaigns and programmatic partners and yield optimization tasks. They primarily set up ad campaign interfaces to improve yield from programmatic partners.

The organizational structure of Monetization and Analytics will look as follows:

Business Development

The Business Development unit is also crucial for the Ad Revenue department to increase revenue from advertising inventory sales. It aims to acquire new supply sources, expand the partner base, boost the number of deals, and enhance the attractiveness of advertising inventory for premium advertisers.

The Head of Business Development leads and holds responsibility for various strategic initiatives to generate and increase ad monetization revenue. The most common ones include:

Development of an extensive network of programmatic partners.

• SSPs and DSPs
  Partnership specialists can cultivate relationships with different players within the programmatic ecosystem. They can negotiate with sales teams hired by SSPs and convince them to bid on your inventory on favorable terms. 
  
  When organized correctly, the workflow enables collaborating with many SSPs simultaneously, thus increasing competition. Ultimately, this process will engage a substantial demand pool, enhancing RPS metrics through optimal bid density.
  
  Partnership specialists can contact DSPs through channels like direct sales teams, partnerships, or programmatic platforms. They will negotiate with DSPs to present their inventory offerings, audience demographics, and targeting capabilities. 
  
  Establishing these direct relationships allows you to negotiate favorable terms and optimize revenue generation. Additionally, publishers may provide DSPs with insights into their audience and inventory to enhance campaign performance and achieve mutually beneficial goals.
  
• CPA buyers
  Partnering with cost-per-action (CPA) buyers can breathe new life into your unsold impressions. New CTV/FAST businesses that don’t face a lack of interest from advertisers are hard to find. Most of them will have to deal with lost advertising opportunities.
  
  You can leverage a chance to monetize your inventory without bids through programmatic pipelines to solve this issue. The primary target will be to partner with entities that pay per ad conversion instead of display. Direct response agencies and affiliate networks will be the most relevant candidates. 
  
  Partnership specialists will gradually create a network of strategic CPA partners that match your objectives. Next, they will incorporate these partners into your AdTech stack, converting every user interaction into a potential revenue source.

Collaboration with demand facilitation partners.

The Business Development team negotiates with third-party SSPs like Xandr to acquire more video ad monetization opportunities. Such platforms aggregate inventory from various publishers and sell it in bundles tailored for DSPs. Eventually, they provide the targeted reach for your inventory, increase bid density, and optimize revenue.

Having a dedicated team of partnership specialists helps a lot in this regard. They will provide the communication and negotiation skills to allocate advertising inventory across different campaigns.

Audience extension.

Another opportunity for revenue increase lies in expanding the reach of advertising campaigns beyond your actual inventory capacity. Say an advertiser seeks more impressions than you currently possess. Your business development team can partner with third-party websites, apps, or platforms to target similar audiences.

Known as Audience Extension (AudEx), this approach allows for engaging with audiences across a broader network of partner platforms. This move ensures the publisher remains competitive and attractive to advertisers seeking broader reach and exposure.

Accessing high-margin advertising campaigns.

Nothing boosts a publisher's reputation and revenue-generating capabilities more than being on the list of partners of premium advertisers. To work in this direction, you must initiate relationships with exclusive advertisers. This move will help secure high-margin national campaigns that reach relevant audiences extensively. 

Through proactive outreach, persuasive communication, and strategic negotiation, you will showcase the value proposition of your advertising inventory. Your sales team can tailor customized offerings that resonate with the target audience, maximizing revenue potential and fostering long-term partnerships. Additionally, ongoing account management and performance tracking ensure the successful execution and optimization of campaigns.

By understanding each advertiser's unique objectives, sales teams can tailor customized solutions that resonate with their target audience, maximizing revenue potential and fostering long-term partnerships. Additionally, ongoing account management and performance tracking ensure the successful execution and optimization of campaigns.

To ensure successful execution of all these initiatives, the business development department needs to fill the following roles:

Conclusion

Our article provides a ready-made structure for establishing an ad revenue department with clearly defined roles, responsibilities, and strategy elements. By utilizing this structured approach, you can swiftly implement ad monetization best practices in your company. 

The next step is to source and hire the right specialists for the job. This includes individuals with expertise in data analytics, ad operations, and business development. By assembling a talented team that aligns with the roles and responsibilities outlined in our article, you can drive revenue growth for your new CTV/FAST business.