Stronger together: why publishers are cooperating to compete
If they can iron out internal frictions and provide an answer to the inadequacies of Facebook and Google’s ad offerings, collectives can mount a real challenge to the status quo, writes Ally Stuart
Google and Facebook are the heavyweights of digital advertising - absorbing one-fifth of global ad spend last year - and, so far, individual publishers have struggled to compete with these media juggernauts.
Yet the balance of power could still shift, if the wider ecosystem can enhance its strength by unifying its numbers.
Of course, programmatic alliances between rival publishers are nothing new in Europe, with German publishing houses such as Axel Springer selling programmatic ads via AdAudience, and French publishers like Amaury Médias, and FigaroMedias offering their inventory through premium publisher collective, La Place Media.
The UK is also home to many publisher groups; the best known being the Pangaea Alliance, which counts The Guardian, Financial Times, CNN International, and Reuters among its members.
Yet while these alliances have existed for years, a recent change in the digital advertising climate fuelled by rising brand safety and transparency concerns - especially after YouTube's placement of ads for Marie Curie and Mercedes Benz next to extremist content - may be just the boost alliances need to successfully challenge the dominance of the digital duopoly.
So what is driving the formation of publisher collectives, and can they use the current focus on quality over quantity to reinforce their position in relation to Facebook and Google?
The motivation for publisher alliances
Most publisher alliances have one main purpose: to increase the reach and quality of the audiences they offer, and in doing so, improve their advertiser appeal and ability to optimise yields across all supply. The Pangaea Alliance, for example, boasts a considerable audience of 200 million ‘influential individuals’; including almost a third of the UK population.
This means it allows publishers to create a trusted and desirable advertising environment in the open marketplace, capitalising on their joint value to provide scale. Better still, we’re now seeing publisher alliances like Belgium’s OPPAb introducing the first premium private marketplace for mobile advertisements, boasting the highest reach in Belgium.
Better access to audiences is good for brands too, enabling them to create hyper-targeted campaigns for niche audiences that are large enough to warrant greater spend. For instance, an established alliance of UK regional publishers known as 1XL – which has been in place since 2014 and includes Johnston Press, Archant and Newsquest - claims an unduplicated audience of 26.4 million across 1,000 titles, offering advertisers around one billion programmatic impressions to trade on.
Independently, the reach of such regional publishers is often too limited to entice bigger brands, but together their proposition is much stronger; presenting brands with country-wide access to unique local markets that national publishers – often with a defined south-east bias - simply can’t provide.
By pooling their resources, publishers can provide a more granular and varied level of data-driven advertising than their individual portfolios allow, helping them both enhance revenue and stand out against dominant industry forces.
A challenge to the duopoly?
In the current climate, where the brand safety of programmatic advertising is a major concern, it looks as though publisher collectives might begin to find competing with media giants slightly easier. With premium publishers offering quality inventory and audiences, they prove to be an increasingly appealing option. And with programmatic budgets moving from broader exchanges to private marketplaces in response to these brand safety concerns, publisher collectives provide an alternative solution that keeps trading open.
After all, through publisher collectives, advertisers can purchase quality placements and audiences at scale via a single point of access, rather than having to work with multiple individual private marketplaces.
Yet to truly compete with Facebook and Google, publisher alliances must also consider how they can address some of the downsides of these walled gardens in their own offerings.
A common complaint about the duopoly is that there is a lack of transparency, with limited third-party verification of performance. So, to increase their attractiveness to advertisers, publisher alliances must provide a highly measurable offering. Additionally, owing to data privacy and protection laws, the use of Facebook and Google can make it challenging for advertisers to use consumer data to inform campaigns outside of the platforms. As a result, publisher alliances need to find ways to package data so advertisers can use it for integrated multi-channel campaigns if they want to differentiate themselves.
For example, Deutchse Telekom is one advertiser that has been allowed to access pooled data from German AdAudience publishers and leverage it in its own campaigns, but only because it owns the DMP and is also bringing its own data. To become real competitors, publisher alliances must play on such weaknesses, and highlight their own strengths.
The sustainability of publisher alliances
While there are several well-established publisher collectives across Europe, entering into this type of alliance isn’t without its challenges; the biggest of which is fragmentation. Typically, individual publishers will favour diverse technologies and ad formats, and will each bring different types of data or inventory to the alliance, creating the potential for silos and inaccuracy.
Take the UK alliance, Symmachia, originally led by the AOP. Slow to get off the ground, it was acquired by Intrinsic Europe last year in a bid to help it keep up with rapid development in technologies and trading practises.
Then there are the possible difficulties of publishers who are technically competitors trying to work collaboratively. An early programmatic alliance in the US - QuadrantONE - only lasted two years following reports of internal arguments over investment.
Furthermore, The Guardian and News Corp are currently looking to form a joint commercial sales operation known as project Arena in response to a decline in print advertising sales.
But many are questioning whether political and editorial differences will make this feasible, especially as The Daily Mail, The Telegraph and Trinity’s Mirror have already pulled out of the project.
Thus, the core lesson we must learn is that if publisher alliances are to present a sustainable alternative to the duopoly, internal issues must first be addressed. Though some publishers may feel they would rather go it alone with their own private marketplaces, as Conde Nast did when it pulled out of Symmachia, others committed to working together should prioritise constructing a unified front.
Facebook and Google may have the inside track in the digital advertising industry, but current concerns around brand safety provide just the opportunity publisher alliances need to fight back and provide a premium, brand safe, alternative to the duopoly.
If they can iron out internal frictions and provide an answer to the inadequacies of Facebook and Google’s ad offerings, publisher collectives can mount a real challenge to the status quo, proving publishers really are stronger together.
Ally Stuart is regional director EMEA, Sharethrough