As we close out 2018, the Guardian is just over three months away from the deadline of its three-year plan to break even. Digiday asked the Guardian chief revenue officer Hamish Nicklin about the most important developments in 2018 and plans for next year.

What stood out as being pivotal moments in media to you this year?
Martin Sorrell leaving WPP and establishing S4 was a huge moment, one we have yet to see the implications from. When [WPP CEO] Mark Read spoke about his new strategic approach, he talked about the fact size with regard to buying power is less relevant than it once was. These are big statements and have huge implications for the media and how it is traded. We’ll see the full implications next year, but we can’t underestimate how big an impact that will likely have on the media landscape.

What are the implications for publishers there?
That’s not yet clear. The good thing about size and scale in trading is you know you have a deal in place and you know what the size of the prize you’re going after is. If it’s less around trading and more around technology-based solutions and relying purely on programmatic technology to plan and buy your media — we’re not there yet. So that would be a danger. Ultimately it will be a good thing, but we need to let the dust settle. The other major talking point is the General Data Protection Regulation.

What will be the long-term effects of GDPR?
GDPR will ultimately be good for the industry. It has forced us to have a reset around who owns data and how it is used and where the balance of power from a data perspective sits. Historically you could argue the industry has exploited the use of data and now there has to be a more open and transparent use of that data between vendors, publishers, agencies, and ultimately users. Publishers who have got consent will see significantly more value in time. Publishers were so used to putting tags on our pages and having no idea what they were doing or what has happened with the data — those days are gone. So we should get back more control of our data, and that can only be a good thing.

What are the downsides?
In the short term, it probably has strengthened the duopoly. All those meetings Google called with publishers to tell us how they were going to interpret it — all the headaches that caused were very real. But we got over them. The first time the ICO fines someone big it will be interesting to see how the industry reacts. GDPR is far from over. But in the long run, it should be good for publishers who are open and transparent with their readers.

What would you like to see the back of in 2019?
The opacity that exists in the programmatic ecosystem makes it really hard to follow the money. So, I want to see the back of vendors hiding money from people in a way that allows themselves to make money in a way they shouldn’t. To have reconcilable transaction records where I can match up logs from the buy and sell side so we can keep following the money.

How satisfied are you with the proportion of marketers’ budgets that ends up with the Guardian?
We still buy our own inventory randomly just to check and we’re confident it is all good. The 30 percent that we saw coming to us was from time to time [and reported in 2016] not the majority of the time. But of course, over time they were worth a lot of money. We replicated the test recently and it showed a split we were happy with. It’s hard to give an average figure as it depends on the deal with each tech vendor. We check regularly enough to give us confidence that we’re keeping on top of it.

Did your settlement with Rubicon Project this year feel like a milestone?
I’m not able to talk about that in detail. But it’s nice that it’s over, as these things are always a drain on resource. What’s interesting is the fact that the [ad tech] industry or certain vendors in it, seem to be holding each other to account more now, after this bid caching scenario. That mafia gathering of silence that always surrounded it [ad tech] because no one wanted to talk about things, that silence has gone and that’s really powerful. It’s a sign of self-regulation. In terms of milestones, Ozone feels a bigger milestone for us [than the Rubicon settlement].

Do you think advertisers will spend less on the open marketplace next year?
Absolutely, 2019 will be the first year open marketplace buying will decrease and the proportion of money going into premium deals will grow. There will be less focus on just trying to find an audience as cheaply as possible across the open marketplaces regardless of context. Last year 80 percent of our programmatic revenue was via the open marketplace, I’d like to alter that in favor of more direct programmatic deals. The amount of money I am getting from premium programmatic direct deals is triple-figure percentage growth compared to this time last year.

What will be your focus post hitting your break-even target next year?
We have been banging on about trust, transparency and quality for years, and have been proved right that banging on about that matters and has an impact on advertisers, so we’ll continue to do the same. We will double down on transparency, in terms of how we work with vendors and how we negotiate with them to get access to the data we need. I predict next year that more publishers will try to wrestle more control back from tech vendors. We will see more unbundling of the services you get offered from tech vendors today, such that we end up with pure utility rather than these added-value services that were always quite questionable.

We will invest more in unique native ad formats that can be bought programmatically, and be more intelligent about how we price our floors. An ideal situation would be a dynamic pricing algorithm where we can change our floors per impression. No publisher I know is anywhere near that. But we should get there.

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