Inside the new Guardian-led programmatic ad sales network
Advertising is clearly heading in a programmatic direction. By one estimate, from Magna Global, the worldwide programmatic ad market will double by 2017, to top $32 billion. But niche publishers face the same challenge of competing for scale as they did with online display advertising.
Today, the Guardian is announcing an alliance with four other publishers to address the size barrier by pooling their programmatic inventory into a network that will let advertisers buy their influence audience at scale. The ambitiously named Pangaea Alliance, launching in beta in April, will let advertisers buy across 110 million unduplicated users (per comScore, via the Guardian) reached by founding partners Guardian, CNN International, Reuters and the Financial Times, along with The Economist.
The Guardian has grown from a niche U.K. paper to a global news brand and is widely admired for its journalism and use of data to inform the product. But the alliance speaks to the limits of its growth, said Tim Gentry, the global revenue director at Guardian News & Media, who is taking the lead on the Pangaea project.
“The sort of quality audience and trusted relationships we have with the audience we have — at the scale we have it — doesn’t get anywhere close to what some of the digital pure plays like LinkedIn or Twitter do,” Gentry said.
The alliance speaks to a few trends. Five years ago, premium publishers with like audiences were banding together to create premium ad networks to compete with online giants. Then came the rise of machine-based buying, and its association with remnant, low-priced inventory. To protect their rates as sales became increasingly automated, publishers have created private exchanges that would let advertisers access their best inventory programmatically.
The Pangaea alliance is a way for premium publishers to get the benefits of programmatic buying at more scale than they could provide on their own, while ensuring advertisers who have been wary of programmatic that their messages will only appear on premium sites.
Publishers have had their share of challenges when doing programmatic sales on their own, though. It’s easy to imagine how the hurdles would be that much greater when multiple media organizations, each with their own business models, cultures and objectives, have to come together.
“The key challenges have been around ensuring that we navigate the differences in approach from one publisher to the next,” Gentry said. “Different publishers had slightly different approaches, and that has taken some work, but we’ve found some strong common ground.”
For one thing, the alliance is using the Rubicon Project’s technology platform, which theoretically should simplify the operation. To make the process fair to lead sellers, the media company that closes the deal will get an extra revenue advantage, Gentry said.
One selling point of the alliance is that the subscription-based FT and Reuters will share anonymized first-party data on their subscribers, which will afford deep audience targeting to advertisers.
Programmatic consultant Matt Prohaska applauded the alliance as a way for the publishers to extend their audiences but in a more controlled setting. “This is a natural next progression where publishers are curating their inventory and offering a little bit of a network-walled garden of well-known properties,” he said. “It’s another step toward publishers selling more in a private marketplace and slightly less in an open environment.”
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