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For nearly a decade, the digital advertising ecosystem has been dominated by a handful of social media platforms, whose data-rich targeting, ease of use and reliable performance revolutionized the field.
But according to proprietary data collected for Adweek by market research firm NewtonX, a confluence of emerging factors has loosened the platforms’ stranglehold on the industry, putting some publishers in a position to benefit.
Results from the study, which polled 80 digital advertising decision-makers in early November, found that 55% of marketers plan to increase their ad budgets next year, and 45% intend to keep their allocation of spend between publishers and platforms the same.
One in three marketers plan to decrease publishers’ share of their total ad budget, but 23% plan to expand it—raising their share, on average, by nearly 10 percentage points, from 34% to 43%.
This limited increase comes largely from brand-marketing budgets rather than direct-response budgets (83% vs. 17%), which reflects the primary factors motivating marketers to shift their spend: the evolving privacy landscape (39%), Apple’s App Tracking Transparency framework (22%) and brand safety concerns (17%).
The changing privacy landscape and ATT, in particular, have hampered the platforms’ ability to measure and attribute conversions, increasing the cost of acquiring customers, said Ryan Pauley, chief revenue officer at Vox Media.
Rather than shift these performance budgets to publishers, marketers have instead chosen to reduce their direct-response spending or convert that budget to brand marketing, an area in which publishers excel, Pauley said.
“As it relates to direct response campaigns, it is objectively true that the prices of conversions and reach are going up,” Pauley said. “That is not necessarily something that gets shifted into other channels. You just get fewer customers.”
Overall, the findings reflects the staying power of the social platforms, whose dominance in the digital advertising economy remains largely unchanged. But key trends in the data suggest that this control is wavering, publishers say.
The research also highlights the growing influence of the shifting privacy landscape and ATT, two nascent factors whose effects have played a key role in elevating the appeal of publishers.
The platforms’ flat growth is a good sign for publishers
Despite persistent economic headwinds, according to survey data, 55% of marketers plan to increase their spend compared to 2021—itself a record year for the digital advertising economy.
Another 12% plan to keep their total ad spend the same, while 33% plan to shrink their budgets in 2023. The findings align with recent forecasts from media agencies Dentsu, GroupM and Magna, which predict 2023 will see tempered growth across the digital advertising sector.
Marketers plan to keep the composite of these ad budgets largely consistent next year, allocating 67% of their spend to platforms and 33% to publishers, according to the survey data. This represents a 1% increase in favor of the platforms, compared to 2021.
However, given that these composites have moved in favor of platforms for nearly a decade, publishers could interpret the near-stasis as a positive sign, said Jason Wagenheim, the president and chief revenue officer of Bustle Digital Group.
“If you did this years ago, you would see numbers far higher,” Wagenheim said. “One percent is essentially flat, which is a good sign for publishers.”
Plus, although the binary can be illuminating for broad takeaways, dividing the digital advertising ecosystem into the tidy camps of publisher or platform obscures important nuance, according to Wagenheim.
For instance, publishers creating branded content for advertising clients will often distribute that content using a mix of organic and paid marketing. For paid efforts, publishers will often advertise on platforms, muddying the financial distinction between the two budgets.
Privacy, ATT and brand safety concerns spur increased publisher spending
The publishers most likely to see an increased share of ad budgets will be those offering the best solutions for the after-effects of ATT, said Jess Simpson, the senior vice president of solutions consulting and verified tech at Publicis Media.
“What brands are very concerned about is how to turn their own first-party data into value,” Simpson said. “The publishers and platforms that can help them do that win their advertising dollars.”
These shifts, which reduce the number of signals marketers can collect about consumers across the open internet, put publishers with sizable audiences of known users and contextual alignment in a position to benefit.
Specifically, publishers with subscription products, registration walls, newsletter readerships and diverse portfolios will be able to create rich user profiles and offer advertisers a variety of segmented audiences, said Pamela Drucker Mann, the global chief revenue officer and president, U.S. revenue and APAC, at Condé Nast.
In short, after a decade in which advertisers could simply track audiences across the web, a new, more privacy-compliant paradigm stands to finally put publishers on a more competitive footing with platforms.
“With the algorithms of social media today, people only see content that they actually want to watch,” Drucker Mann said. “That means advertisers need to partner with people good at making content, and that’s our wheelhouse. Before you could buy your way to the top—now you can’t.”
