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Is the Open Marketplace Done? The Slow Exodus from OMP to Direct-Sold Advertising

Ah, the digital age – a world where you can have 500 friends yet be terribly alone, and where advertisers think they’re omnipresent until they realize 70% of their audience is in the digital witness protection program. But in an age of hyper-targeted advertising, there’s a plot twist worthy of a classic film noir. The Open Marketplace (OMP) – the trusted intermediary between publishers and advertisers – seems to be on the ropes. Are its days numbered?

The Great Disappearing Act

Let’s begin by understanding this curious case of vanishing data. Ever since data privacy became the talk of the town, with consumers singing the chorus of “Don’t Track Me, Bro!”, a substantial number of users have opted out of tracking. Combine this with a buffet of cookie-blocking browsers, and we arrive at a startling figure: 70% of the internet is effectively playing hide-and-seek with adtech.

This mass exodus is more than just a slap on the wrist for adtech. It’s turning into a financial migraine for publishers who relied on OMP revenue. Advertisers, too, are feeling the squeeze. Imagine gearing up for a blockbuster advertising campaign and then being told you’ve lost 70% of your audience. Not quite the blockbuster start they had envisioned.

Stats Don’t Lie (But They Can Break Your Heart)

Don’t just take my word for it; the numbers spell out the heartbreaking story. EMarketer’s projection suggests that by 2024, direct-sold ads will be the leading man in the advertising world, accounting for a staggering 75% of total programmatic digital display ad spend. In contrast, OMP will be playing a tiny supporting role with just 8.5%.

Remember the heady days of January 2020? The average monthly CPM in OMP was $1.45, but by January 2023, it had tumbled to $1.21, a rather ungraceful faceplant. Couple this with the insight that publishers are losing more than 50 cents on every dollar to third-party adtech, and it’s evident why the publisher CROs are starting to look elsewhere.

The Green Pastures of Direct-Sold Advertising

Enter direct-sold advertising, the knight in shining armor. As the OMP landscape gets murkier, direct-sold gleams with promise. A prime example is Ranker, which by shifting its strategy to direct-sold and leveraging high-intent audiences, has seen a 4x jump in revenue year-on-year.

Furthermore, publishers are now positioned as the next-generation data owners. They can offer brands a direct line to 100% of their audience, unlike the paltry 30% reach of the OMP. As such, publishers have the chance to illustrate to brands that there’s an untapped goldmine right under their nose.

But let’s not write an obituary for OMP just yet. Yes, it has challenges – the lack of control, transparency, and premium ad placements, and the ever-looming shadow of ad fraud. The new regulations like California Privacy Rights Act (CPRA) aren’t doing it any favors, either. The act is pulling back the curtains and making sure adtech intermediaries don’t play fast and loose with consumer data. Add to that the mounting concerns about the environmental impact of real-time bidding, and it’s clear that OMP needs a radical overhaul.

However, what we’re witnessing isn’t so much the end of OMP but rather its evolution. We’re moving from a “Wild West” era of digital advertising to a more mature, transparent, and sustainable landscape. OMP can still play a role if it adapts.

The Verdict

Is the Open Marketplace done? Not quite, but it’s facing an existential reckoning. As the tide shifts towards direct-sold avenues and publishers reclaim the narrative, the future of digital advertising is being redefined. In this evolving storyline, there’s room for both direct-sold and a reformed OMP. But for now, publishers and advertisers would do well to place their bets on direct-sold. After all, in the unpredictable world of advertising, it’s always wise to go with the sure thing.

Pesach Lattin
Pesach Lattin
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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