A New Chapter in Automated Publisher Payments

In adtech (advertising technology), a publisher refers to an individual or organisation that operates a platform or website where digital ads are displayed. In the online advertising ecosystem, publishers play a crucial role by providing the audience and space for advertisers to reach potential customers. Here are a few key points about publishers:

Monetisation
Like traditional publishing, digital publishers generate revenue by selling advertising (ad) space on their platforms. This can be done through:

• Display ads
• Video ads
• Sponsored content
• Native ads

Types of Publishers
Publishers can live on a wide range of platforms, including blogs, news sites, video streaming, social media, and mobile apps.

Ad Networks and Exchanges
In adtech, publishers often work with ad networks and ad exchanges to sell their ad inventory. First, Ad networks aggregate advertising space from multiple published content creators. The next step is to sell it to advertisers. Ad exchanges provide a marketplace where publishers and advertisers can buy and sell ad space in real time.

Programmatic Advertising
Many digital publishers use programmatic advertising platforms to automate the buying and selling of ad space. This technology uses specific data and algorithms to effectively target ads and maximize revenue.

Ad Formats
To suit different advertising goals and user experiences, publishers use a variety of ad formats, including: 

• Banner ads
• Interstitial ads
• Video ads
• Rich media ads

Audience Data
Publishers collect and use audience data to generate targeted ads. This data can include demographic information, browsing behaviour, and interests, which helps them reach the most relevant audiences and receive the highest publishing revenue.

The difference between an ad network and an ad publisher lies in their roles and functions.

Role
An ad publisher owns and operates their own space. Publishers provide the inventory where advertisements can be shown to their audience, and typically self-publish content. Examples include The New York Times, personal blogs, social media platforms, and gaming apps. Even a self-published author promoting a bestseller falls into this role.

An ad network acts as an intermediary between publishers and advertisers. It aggregates ad space from multiple publishers and sells it to advertisers. Examples include Google AdSense and Media.net.

Function
Ad publishers’ primary function is to create and distribute content that attracts and engages an audience. They then sell ad space directly to advertisers or through intermediaries, like an ad network.

The main function of an ad network is to facilitate the buying and selling of ad inventory. They work to match available ad space from publishers with advertisers looking to place ads. They seek to provide a centralised platform where advertisers can purchase ad space across various publishers.

In adtech, several pricing models are used to determine how digital advertisers pay for their campaigns. These models are developed to align the goals of advertisers, publishers, and ad networks. Some of the more common payment methods include:

Cost-Per-Click (CPC)
Advertisers pay every time a user clicks on an ad. These payment terms are commonly used in direct response and performance marketing campaigns. For example, if the CPC rate is €1 and the ad is clicked 25 times, the advertiser pays €25.

Cost-Per-Acquisition (CPA)
Advertisers only pay when the user takes a specific action after clicking the ad. This can include anything from making a purchase to signing up for a newsletter or downloading a whitepaper. It’s most commonly used for campaigns focused on conversions.

Cost-Per-Mille (CPM)
In this payment model, advertisers pay for every thousand times the ad is shown, regardless of whether the user takes any action, or even clicks on the ad. For example, if the CPM rate is €6, the advertiser pays €6 for every thousand impressions.

Cost-Per-Lead (CPL)
Here, advertisers pay for every lead generated by an ad. This typically includes actions further down the funnel, like completing a contact form or signing up for a service. For example, if the CPL rate is €12 and the campaign generates 20 leads, the advertiser pays €240. 

Flat Rate or Sponsorship
In this case, a fixed fee is paid for a set period or placement of the ad. Advertisers pay a predetermined amount to the publisher account, a common method for high-visibility campaigns (think influencer marketing). 

For example, an advertiser might pay €5,000 to run an ad for a week or €50,000 for a single celebrity post. In this case, there may be a minimum payment threshold for top talent.

Revenue Share
This method pays out a percentage of the revenue generated from the ad. Revenue share is popular for affiliate marketing and some performance-based campaigns with royalty rates. For example, if an ad generates €2,000 in sales and the revenue share is 10%, the publisher earns €200.

Additional Pricing Models

• Cost-Per-View (CPV): Advertisers pay for each video view of the ad.
• Cost-Per-Engagement (CPE): Advertisers pay when users engage with the ad (in a specific way).
• Cost-Per-Install (CPI): Advertisers pay for each app install generated from an ad.

In adtech, ad inventory refers to the space available on digital platforms where ads can be displayed. Ad inventory can include a variety of channels, like websites, mobile apps, social media, or video streaming sites. In essence, ad inventory represents the total number of opportunities that a publisher must show ads to an audience.

Ad publisher inventory is critical, as it directly impacts supply in the online advertising ecosystem.

Types of Ad Inventory

• Display: This includes space on websites and ads for banners, sidebars, and other graphical placements.
• Mobile: Ad space that lies with mobile apps, including banners, interstitials, and rewarded video ads.
• Video: This includes video content like pre-roll, mid-roll, and post-roll ads.
• Native: Ad space that blends seamlessly with the content, like in-feed ads or sponsored ads.
• Audio: This is ad inventory for audio content like podcasts and music streaming services.

Measuring Ad Inventory
Ad inventory is measured in a few ways. Impressions represent the number of times an ad is displayed to a user. Ad slots involve a specific position on the webpage or app, with each slot representing a unit of ad inventory.

Measuring ad inventory also considers viewability. Viewable impressions must meet certain criteria, such as the user remaining on the page for X amount of time.

Managing Ad Inventory
Publishers can sell ad inventory directly to advertisers, with media agencies, or through automated platforms like ad exchanges and real-time bidding (RTB) systems.

Many different factors can affect ad inventory value, including audience demographics, content quality, placement, and user engagement. Effective management and optimisation of ad inventory are critical for publishers to maximise revenue and for advertisers to reach target audiences.

Yes, automating publisher payments in AdTech is not only possible, it’s a widely accepted practice that ensures accurate, timely, and efficient transactions. Automation is achieved by integrating the best tools to meet business needs. 

Look for a platform that can streamline the payment process, ensure compliance, and manage financial data. Tipalti is a comprehensive payment automation system that can significantly streamline publisher payments in AdTech. Here’s how:

Invoice Management
Automated invoice processing to capture invoice data submitted by publishers. This includes streamlining approval workflows and creating a payment schedule with automated notifications.

Payment Processing
Tipalti offers global publisher payment processing with various payment methods, including ACH, wire transfers, PayPal, and more. It handles payments in multiple currencies (not just USD) and supports local payment methods, increasing flexibility for international publishers.

Tax Compliance
The Tipalti solution automatically collects and validates various tax forms from publishers. It helps to generate compliance reports and adhere to local and global tax regulations.

Publisher Management
When it comes to self-service, Tipalti is top-notch. They offer a supplier portal where publishers can upload payment details (like contact and bank account), upload invoices, check on payment status, or run a quick payment report. This empowers publishers and keeps the advertising AP team free from constant queries. 

Integration Capabilities
Tipalti integrates with a myriad of AdTech platforms, enterprise resource planning (ERP) systems, and accounting software to automate publisher payments and streamline data flow. It supports the creation of custom workflows to match specific business needs.

By leveraging solutions like Tipalti, AdTech companies can significantly streamline publisher payment processes, enhancing efficiency, ensuring accuracy, and strengthening compliance with regulatory requirements.

Effectively managing publisher payments in the EU requires special attention to regional regulations, currency differences, and cross-border transactions. 

Here are some simple best practises tailored to the EU:

Comply with All EU Regulations

• GDPR: Ensure all payment data handling complies with the General Data Protection Regulation (GDPR). This includes secure storage, processing, and transmission.
• PSD2 and Open Banking: The Payment Services Directive 2 (PSD2) governs electronic payments and promotes secure payments across the EU. Utilise open banking APIs for enhanced payment transparency and security.
• VAT compliance: Understand and correctly apply VAT rules, which vary across EU countries, especially for cross-border services.  

Support SEPA Payments

• SEPA (Single Euro Payments Area): Use SEPA transfers for euro-denominated payments within the EU. These are faster, cost-effective, and standardised transactions.
• SEPA direct debit: Consider SEPA Direct Debit for recurring payments, which is a convenient and reliable method for both parties.

Multi-Currency Management

• Multi-currency accounts: Will minimise currency conversion fees and simplify cross-border payments with additional payment options.
• Currency hedging: Large or frequent transactions in non-euro currencies should consider currency hedging strategies to protect against rate fluctuations.
• Automated currency conversion: Automate these processes to ensure timely and accurate payments in the publisher’s preferred currency.

Additional Best Practises

• Ensure transparent communication with local support and tax documents.
• Regularly update publishers on payment status and compliance checks.
• Align payment cycles with common European business practices (net 30/60).
• Utilise payment platforms that are optimised for global and EU transactions.
• Implement Strong Customer Authentication (SCA) in line with PSD2.