Advertising Models Based on Guaranteed Revenue Aren’t Effective for Anyone

On 18/07/2018 by Elodie Dratler

This article has been originally written in French and published in mind Media.

Ligatus, Outbrain, Taboola... why are content recommendation platforms, meant to improve online advertising, acquiring sulphurous reputations? Elodie Dratler, Marketing Director of Ligatus France, traces the evolution of practices over the past five years and their origins, and explains how Ligatus wants to recreate value in the ad world.

Ligatus was created 15 years ago, driven by an idea: a new advertising format designed by a publisher, for a publisher. This publisher was a German entity called OnVista, an equivalent of what is Boursorama. To monetize its inventory, OnVista considered an advertisement that would be integrated into a content page, associated with an interesting placement to retain attention without disrupting navigation. The ‘text-link’ at the foot of the article was born, and with it, a new advertising experience that would prove its effectiveness.

In 2008 the company is acquired by Gruner + Jahr a 100% subsidiary of the Bertelsmann Group. Bertelsmann is a Germany-based media company that has one distinct advantage: it is a privately held company. The groundwork of Ligatus' DNA is thus laid. In five years, based on the sponsored content recommendation model, the company has become the main (and sometimes sole) performance marketing partner of the largest media groups in France: Groupe le Monde, Les Echos, Lagardère Active, Groupe Figaro, 20 Minutes, Groupe Nice matin, Groupe Sud Ouest, RTL, Prisma Media, among others. So, why is it that a perceived qualitative format is now garnering criticism.

A Vicious Cycle Sets In

We must look back to 2013-2014, when the digital advertising context and its practical uses changed. In the United States - likewise in Europe - agencies and advertisers deplored the growing inefficiency of banners, which were less and less adapted to mobile. Thus, big media groups endow their offer of native advertising carried by a range of rich technologies, and Ligatus loses some titles and exclusivities. The competitive landscape grew in number as much as it deteriorated in value. It must be said that for 20 years, the online press struggled to find its balance; classic online advertising did not offer the expected levers. Not to mention the difficulty of converting an Internet user into a paying subscriber. The web-based press subsidy system did not exist. And it is not Google that could become an impartial patron.

Publishers, determined to produce quality, were forced to seek resources outside their group. Practices to achieve model stability and development introduced a set of relays with the regulators and sub-regions that now guarantee recurring monthly revenue lines. By 2015, the advertising market hardened and bad practices were taking hold for good reasons. Despite goodwill, we were witnessing the multiplication of publisher briefs demanding income guarantees, which mechanically led the players - those recommendation platforms but not only - to select content or advertisements generating the highest click rates. The problem: these are often not the most qualitative. Advertising models based on guaranteed revenue aren’t effective for anyone.

Being More Selective Is Key

Progressively, the rise of advertising content inversely proportional to the quality of editorial content damaged the user experience. In 2015, the audience reacted with the massive adoption of ad blocking, and advertisers intervened to put advertising quality back at the center of the debate. This is also Ligatus's bias. Our company chooses to rely on its ability to renounce unreasonable briefs; it is costly in terms of turnover and spontaneous attractiveness, but more effective in the medium term to attract major accounts and the Big 6 agencies.

What are our convictions to recreate market value from branded content recommendations? First, assuming to have a more selective network, less than 100 media group partners and without long tail. Then, a mobile-oriented service. Finally, by guaranteeing brands the performance of their campaigns through a brand safe media context: we now exclude advertisers with misleading promises (exit Forex and other sectors at risk for Internet users). We don’t engage with arbitrageurs or click farms, and we avoid the risks of fake ads as much as possible. We have become much more selective. At the same time, we have made a major shift. Two years ago, we decided to go beyond our advertising network strategy to anticipate changes in practices. We now offer our own DSP and SSP programmatic technologies to agencies, brands and publishers. We do not believe in strategies that seek to create dependencies and constraints. For example, advertisers can use our DSP to buy all the native programmatic levers, on all available inventories. Obviously, with a better offer on our own inventory.

Moving Forward, You Must Also Win the Branding Game

Since 2017, XXL formats and video ads with 30-second sound have been excluded from the new norms of the Coalition for Better Ads standards, accelerating the process of finding new solutions. Creativity associated with branding campaigns is becoming an essential issue. It is necessary to rethink writing content that adapts to the flows, to consider the XS format as the future so much that it offers benefits, and to bet on quality. Good practices are known: think of page placements that allow to create diversified advertising experiences, bill visible formats according to bounce rate or time spent, and give access to a rich audience panel via programmatic sales. We are regaining ground thanks to these quality standards and ideological convergence with publishers who expect their advertising to be in line with their requirements. It is through the quality of content and medium and long-term strategies that we will create value for all - publishers, monetization players, brands - in a sustainable manner, and not by excessive revenue guarantees.

Willing to debate? Want to share your advertisers' or publishers' experiences on the limits of this model? Do not hesitate to contact me: