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With websites covering topics like entertainment (ScreenRant), gaming (Polygon) and automotive (CarBuzz), Valnet caters to users across a wide array of interests.But according to Ji Heon Kim, Valnet’s head of monetization, Valnet realized it could create more value for its users by encouraging them to subscribe or authenticate themselves.Maybe a “mass scale” of users wouldn’t sign up for their websites, but perhaps 10% would. And, as Kim puts it, that “10% would still be valuable, and we can do a lot with that 10%.”“We created more value to [those] users, more exclusive content and high-quality content,” Kim says. “All of that became an initiative on the content side for us to deliver a premium model and give users an incentive to sign up.”Kim further talked with The Current Podcast about balancing advertiser value, user experience and performance, which he says are “always affecting each other.”Episode TranscriptPlease note, this transcript may contain minor inconsistencies compared to the episode audio.Damian Fowler (00:00):I'm Damian Fowler, and welcome to The Current Podcast. Today we're talking to one of the biggest digital publishers. You might not know by name, but you've definitely read their stuff. I'm talking about Net. The company behind Screen Rant, the Gamer, Kaleida make use of, and a bunch of other sites that rack up hundreds of millions of sessions every month. Joining me today is Ji Kim Valnet's, head of monetization. Ji'S been leading the charge on everything from supply path optimization to first party data to figuring out how to drive real revenue without compromising the reader experience. We'll get into some of the big shifts they've made in their tech stack and how they're bringing newly acquired brands like Polygon into their ecosystem and what other publishers can learn from their approach.Ji Kim (00:52):At Valnet, I'd like to think of us as a publishing powerhouse. We started very small. Our motto is humble and hungry. We like to remind ourselves that it's always good to keep a humble mindset. I've been at NET for 10 years and we've grown tremendously. We've went through a lot ups and downs, but even as we grow, we like to think that we're small and agile and the publications we range from automotive, gaming, technology, entertainment, but entertainment has always been our flagship, but we've been kind of branching outside of that and trying to expand more and more. And then we have some lifestyle brands as well as sports.Damian Fowler (01:35):Let's talk about a moment that changed the game for Net. Can you walk us through your, I guess we're going to talk about supply path optimization at first anyway, which is a hot topic around these parts and what work you did around supply path optimization, like cutting resellers and boosting direct inventory. Could you talk us through that a little?Ji Kim (01:57):It's an ongoing process. It's certainly, I think most people agree that SPO is not an easy thing to achieve. You can commit to it one shot, but that's much harder to do considering that there will be a revenue impact. So for us, we tried both ways. We took a few sites and we took the direct approach and we saw a pretty decent stability, and then some other sites did not, and then we have to kind of revert back to it. SPO, it was always a topic that was talked about but not well enforced. And tradedesk took a big initiative to push publishers towards it. And then we started working closely with Jounce Media as well, with Chris Kane started kind of talking through some of the ideas, how should we go about it? How do we retain the value and still achieve removing the resale alliance and keep our inventory as clean as possible?(02:51):But initially our outlook of SPO was about making our inventory as clean and transparent as possible. Net considers ourselves as a premium publisher and we want to make sure that the advertisers see that as well. So we were heading in that direction. But ultimately, I think the biggest challenge with SPO was it's impossible to do an AB test because you have one A TXT file and you can't test one setup with the resell alliance, one setup without. So that's been pretty challenging to understand where's the value going, where is it coming from? And even with the Resell Alliance, when you talk to the SSPs with Resell Alliance, they'll go, oh, these are PP deals. These are not just rebroadcasting and all this stuff. So trying to understand the granularity and all that details of what each resale align means was very difficult. But ultimately we know we have to go in that direction, but we know it's not going to happen overnight, so we're kind of just taking a step at a time.Damian Fowler (03:51):That's great. What would you say was the kind of catalyst or moment that sparked that shift?Ji Kim (03:57):We always talked about advertiser value. It is important to yield as much value as possible and get the performance that we need. We always think that advertiser value is important, and when we think about that, it's like you go through stages. You go, okay, viewability needs to be important. Let's get viewability up to above standard, above average, make sure our CTR is good, but it's high quality clicks. It's not just users just clicking on stuff. Then you go through the lines and eventually you get to SPOs. Make sure that advertisers know what inventory they're getting access to, what they're buying, and make sure that they're getting insights. The transparency is there. Then we've increased the value of our inventory.Damian Fowler (04:46):Yeah, I mean that's the key, right, obviously. And speaking of that, having made these changes, are you in a position to be able to see the kind of impact that they've had from a revenueJi Kim (04:58):Perspective? Honestly, I don't think I can everything, especially with these kinds of stuff, what I've learned is it doesn't change overnight. Let's say we remove all the reseller lines yesterday. Today, likely the performance is going to drop initially and maybe things recover over time, but there's so many moving parts that it's hard to associate the value towards SPO, and that's a lot of things that we do in this industry. But I think that's when we like to look at it as, you know what? Ultimately we are improving the quality of our inventory, so we will get rewarded at some point. And that's how you move forward. But with SPO, I think the other side is that it's not just about removing reseller lines. You also have to market yourself and tell the advertisers that, Hey, we have gone in this direction. We have removed the reseller lines. All of our inventory is direct. It's clean. And that part is also hard to do. We haven't spent a lot of time or resources into marketing ourselves, and that's why we talked about, people may not know net, but they know our brands. It's the same thing. It's like we are now making a big push to let people know who Val net is, and that's going to go in hand in hand with this stuff.Damian Fowler (06:21):In terms of that messaging around the surgery as it were you're doing on the supply path, does that land well with advertisers?Ji Kim (06:32):I think it's always positively looked at when you tell them, it's like everybody, it is never negative, but I don't know if actually if it's meaningful for them because at scale, they're buying at scale. So yeah, we're a big publisher, but they're also buying at multiple publishers. Maybe only small portion of their budgets come to us. So it's positive, but I don't know if it's all that meaningful to them. At least that's what I've felt.Damian Fowler (07:04):So in addition to the SPO, what other tweaks or changes are you as head of monetization looking at to basically bring in those ad dollars and keep readers satisfied, I suppose?Ji Kim (07:17):Yeah, so there's three things. So we looked at the advertiser value, but then there's the user experience and then the performance side. So always those three things, there's constantly affecting each other. Ad density is probably one of the biggest part of advertiser value and performance and user experience. So we are constantly trying to reduce our density, and we look at this metric impressions per session and request per session. So we look at that and injections our injections based on content length, a paragraph breaks and all that stuff. So we'll try to work with the content team to create optimal breaks. I'll have a little sit down session with the content team. The leads say, okay, this is how the admin injection works, and how you break out your content really does impact, because we won't break a paragraph in half to inject an ad. So there needs to be natural breaks for the ads to inject. So if you have massive paragraphs, we're going to have less ad injections, which is fine if the content works like that, but they also need to think about how all this stuff works.Damian Fowler (08:26):That's really interesting. I mean, I think that sweet spot between not being the Vegas strip, but also ads have to populate at the right time to have value.Ji Kim (08:35):For net, we've focused mostly on open market programmatic spend. We have a small direct initiative. This is something that we've been trying to grow, but when you don't have huge direct sales initiative and direct spend coming in, you kind of need the density because the CPMs that you get from open market is much lower. So we want to try to move away from that as much as possible. I don't think found that will ever be a publisher where we drive like 50% of the revenue from direct sales, but we want to grow it to maybe 15, 20%. And once we do that, we can yield higher CPMs, which allows us to reduce the density, which would be better for advertiser value, better for user experience, and we'll still get the performance that we need to kind of go forward.Damian Fowler (09:24):So it's a balance.Ji Kim (09:25):Yeah. Yeah. I think if we can drive higher CPMs, we would love to reduce density, but it's always the constant battle between the two of, okay, well we reduced density. Oh, we went too far. Okay, we got to bring it back a little bit.Damian Fowler (09:38):How difficult is it to kind of innovate in ad tech? This is a broader question, I guess given how fast things are changing, especially on the programmatic front,Ji Kim (09:47):It's been very, very difficult. Rapidly changing environment is definitely one of them, and you have to adapt quickly. For example, the video definition of having instream outstream, and then now there's a third definition of accompanying that stuff. When it happened, the enforcement happened quickly, so we had to adapt quickly, and that's difficult. But innovating is, I think, much more difficult than just adapting to the new policies and new rules. So many different ways to innovate pre, for example, you have the open source code, you build that, but there's so many customizations that you can do and even a single customization, you interpret how you should approach that topic and how you should build your tech. So you kind of have to talk to your developers and walk through. And our biggest challenge I would say was bridging the gap between developers and ad ops. I was like, because I am an ad ops guy, I understand programmatic landscape very well, but our developers do not. And I'm not a developer, I'm not a technical guy. Obviously through 10 years I've learned a lot of stuff, but still, if I needed to build something, I'm not going to be able to tell them exactly how to build it. So you need somebody in the middle that understands both sides,(11:03):And that was the most difficult part. And eventually we did find resources that they were able to bridge that gap and were able to build stuff. But ultimately, there's just so many different ways to build your product and you want to make sure that product that you build or tech stack that you build is going to keep that balance that you need between the user experience, the performance, and the density, everything that pertains to page speed as well. If you build it to be too slow, everything gets affected as well, and that's harder to tell. So yeah.Damian Fowler (11:37):So how have some of these technical changes influenced your broad and monetization philosophy?Ji Kim (11:43):Yeah, so I guess one of the things, if we talk about authentication, we talk about cookie deprecation and why authentication became so important to majority of the publishers. And I remember our thought process around authentication was pretty pessimistic, I would say. But eventually we said know what? We can create content or value for the users that's going to want them to sign up and want them to get authenticated. And we said we got to start somewhere. Ultimately, maybe we've become a little bit more realistic about what critical mass of a value would be if we're at, if we're expecting 50% of users will log in, that's not going to happen, but 10% is still very meaningful. So it was about our philosophy was changing, about our expectations changing and still understanding that 10% could be very valuable and we can do a lot with that 10%. So we created more value to the users are more exclusive content, high quality content, high quality videos. All of that stuff became an initiative on the content side for us to deliver the premium model and to give users the incentive to authenticate a sign up on.Damian Fowler (13:03):That's really interesting. I think one of the things that also I'm hearing is that you kind of have different audiences, but you're getting to understand your audiences. I mean, this strategy gives you more insight into who's coming.Ji Kim (13:15):Yeah. We also created what we call threads. They can talk about the article, talk about topics that we're discussing, and that really improved our engagement.Damian Fowler (13:30):As you look to the future, how do you think about, as it were, locking in some of these changes and this value that you see from this audience?Ji Kim (13:40):So I want to go back a little bit about innovating and how difficult it is. So I went through the stages of, okay, what am I focusing on to optimize to yield more value? And initially it was demand. Okay, we want to work with as many high quality as P as possible, but then you do work with all of them. There are going to be going to be one or two that come here and there, but generally speaking, they're not going to create incremental value. They'll just take a piece of pie that was taken by somebody else, not meaningful value. Then you work on ad tech innovation, all that stuff, and that we'll continuously work on that, but that also has lots of limitations, and you eventually reach a plateau point of say, you're not going to find a lot low hanging fruits. So now we come to premium inventory, which we need to learn our users, we need to learn who they are so we can offer these users to our advertisers to grow our PMP programmatic direct, as well as your conventional IO based direct deals that's going to yield as higher CPMs.Damian Fowler (14:53):Yeah, I mean, talk of premium inventories is characteristic of the moment we are in when it comes to programmatic sales for publishers.Ji Kim (15:02):Yeah.Damian Fowler (15:04):Let's draw back and look at the big picture and some of the kind of industry context. I guess think I'm correct in saying Valnet reach has more…
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