How Condé Nast retooled for programmatic
Condé Nast may be a glossy magazine company at heart, but it’s also embracing the promises of programmatic selling, at least in its own way. Here’s a look at how it’s made programmatic work.
Direct deals, not open exchanges
The company, which gets 53 million unique visitors a month online in the U.S., was a relatively early programmatic adopter, having launched its own private exchange back in 2011. Even so, its programmatic embrace still felt tentative. Condé Nast was intent on keeping access to its inventory exclusive, despite the greater industry push for publishers to open themselves up.
That approach hasn’t changed much. Condé Nast’s overall strategy is to structure its programmatic sales so that they mirror its direct deals, particularly with regards to price and access. Because the company doesn’t put its inventory up on open exchanges, it has a better handle on which advertisers it deals with — and the prices those advertisers pay for its inventory. The decision feels prescient in light of agencies like GroupM announcing that they’re moving away from open exchanges.
Ultimately, though, there’s no avoiding the reality: Despite what publishers say about the promises of programmatic, the shift to real time-bidding invariably means lower CPMs, even for publishers with high value inventory. When The New York Times posted its fourth quarter 2013 results in February, for example, it blamed its 6.5 percent decline in digital ad revenue in part on programmatic buying, which was pushing down prices. In a later interview, Times ad products svp Michael Zimbalist said that the company planned to release more inventory in open exchanges — albeit cautiously.
Big programmatic partnerships
Conde Nast’s efforts have also expanded in new directions. In May, it teamed up with Google to pitch programmatic deals to buyers, which the companies are pushing towards Google’s YouTube-powered “Lightbox” banner ads. The deal made sense for both parties. Google wants bigger brand dollars, and Condé wants to offer advertisers more premium placements for their messages.
“We look at this as a powerful new medium,” said Condé Nast’s digital ad chief Alanna Gombert. “Programmatic opens up the industry to new and innovative ad technologies, which is what we want. We’re in advertising, after all.”
Data, data, data
Despite some publisher hesitation about programmatic, Condé Nast is in a good position to take advantage of the shifts in automated selling. Publishers are sitting on a ton of data about what makes their readers tick. This includes not only basic info about what articles people click on and what topics they’re interested in, but also data about who those readers are, where they live and how much money they make. And with Catalyst, Condé Nast’s audience targeting tool, the company wants increase its data pool even further.
“The people reading our magazines, either online or offline, are of a certain ilk,” Gombert said. “They’re influential and have a lot of brand affinity.”
A combined, programmatic-friendly sales force
And then there are the human considerations. Beyond the revenue concerns for publishers themselves, programmatic also changes the equation for publishers’ sales teams, which have to adjust to both a new way of selling and a new compensation structure. At Condé Nast, the solution was to merge is direct sales and programmatic teams, reducing conflict between the two channels.
“This evolved as a time-saving advantage for both buyers and sellers,” Gombert said. “We don’t see any difference between buying programmatic and direct.”
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