UK programmatic publisher alliance struggles to launch

The idea of publishers banding together to create more leverage in programmatic ad buying is good on paper. But then, so was Communism.

Case in point: The Association of Online Publishers-led effort to link together U.K. premium publishers to boost their programmatic yields by offering brand-safe, fraud-free environments. That 15-month effort, known as Symmachia (though that brand is being dropped in favor of the simpler “Alliance”), has yet to come to fruition, and now the trade group has sold it to ad tech firm Intrinsic Europe for an undisclosed sum.

The goal is to speed up the launch of the alliance. The reasons for the slowness: Contracts were too complex, and like with any committee-led initiatives, locking down agreement on decisions from multiple, competing parties, can be like herding cats.

“When it was under the AOP, it was all centered on committee-based decisions,” said Julia Smith, who spearheads the alliance and will continue leading it as general manager of Symmachia. That’s a bit like going to a hairdresser’s and, rather than cutting your own hair, everyone deciding to cut each other’s instead. It doesn’t work,” she said.

Big-name publishers in Europe have been increasingly clubbing together to form alliances as a way to maintain higher programmatic yields and offer data-driven advertising at larger scale than their individual portfolios. In the U.K., there are three alliances. Pangaea is a group formed of The Guardian, Financial Times, CNN International and Reuters, with inventory also supplied by The Economist. Earlier this month, it revealed Dennis Publishing will be an inventory partner for magazine The Week.

Since launch, it has delivered around 500 campaigns in over 20 countries worldwide for clients in sectors spanning banking and finance, travel, IT, real estate, media and fashion, according to the Guardian. Tim Gentry, Guardian News and Media chief revenue officer, said the alliance is “going from strength to strength.”

Elsewhere, the verdict isn’t so rosy. Enders analyst Thomas Caldecott has previously said that the alliance had generated “negligible” revenue for the Guardian and other partners at the back end of last year. One agency source, who would only speak on condition of anonymity, said Pangaea hasn’t had the traction with the major agency groups that it had hoped for, which is most likely due to the fact agency trading desks have their own competing private marketplaces.

There is also a group of 30 regional publishers, including Johnston Press, Archant and Newsquest, launched in 2014, which offers a combined 1 billion impressions to trade on. Newsquest claims its digital ad revenues have doubled as a direct result of the alliance.

Such alliances have historically run into problems around infighting, lethargy and incompatible data and systems. U.S. newspaper programmatic alliance QuadrantOne, formed between The New York Times, Tribune Company, Hearst and Gannett in 2011, was abruptly shut down two years later. Reports cited internal bickering within the joint venture over who would invest what, as one of the reasons for the rupture.

“As we’ve seen from the time it’s taking to get the AOP/Intrinsic off the ground, it’s a clunky, legislative process to onboard publishers,” said Tim Pearce, head of digital investment at Dentsu Aegis’ media-buying arm Amplifi. “Agency trading desks are building PMPs, which are various collections of direct programmatic relationships they have with publishers. These direct integrations are far quicker to set up.”

ESI Media, which owns the Independent and Evening Standard, and The Telegraph have been on board the AOP co-op to pool inventory since last March. But other publishers have been snail-like in their signing off, delaying the alliance’s roll-out.

Julia Smith has been spearheading the alliance and has now been made Intrinsic board adviser. She agreed the project has been frustratingly slow but said several of the issues that have slowed down the alliance will fade under the ownership of a commercial enterprise.

The complexity of the contracts that were being drawn up also delayed the launch. Publishers can be slapped with fines of 10 percent of their revenue growth if they’re found in breach of the Competition Commission.

Another big change will be the scrapping of the sign-up fee, a five-figure sum each publisher would have paid to cover administrative costs. From now on, it will be revenue-share only. AppNexus will still power the AOP/Intrinsic alliance and yield-optimization company Alephd will also remain. There are also plans to bring in more audience data-driven opportunities, extend it for mobile and video and introduce header bidding.

Time Inc, Sift, Dennis Publishing and Future are expected to commit as partners, according to Smith. She has the third quarter as a launch date and said initially the alliance will likely launch with between 50 million and 100 million impressions, with expectations to increase that to 500 million over time, said Smith.

For publishers like the Telegraph, the alliance helps in its overall goal: to reduce how much inventory it puts into the open marketplace. Mike Buckley, commercial director at The Telegraph, said the move is a low-risk, win-win situation, which was echoed by ESI Media’s strategy and commercial director Jo Holdaway. “I can’t see a down side,” she told Digiday.

With Google and Facebook taking up to 80 percent of all new digital ad spending, publishers have no choice but to continue resorting to strength in numbers. There are numerous examples of this throughout Europe. In Germany, eight of the 10 biggest publishing houses, including Axel Springer, are pooling data to turbocharge their data-targeting sell to advertisers, as part of a collaborative data alliance aimed at directly competing with Google and Facebook. In Sweden, publishers have formed a united front to tackle another growing threat: ad blocking. They’ll run a month-long ad-blocker ban this August.

Pearce also believes that publishers risk overestimating the value of an ad being placed on their platforms, when buyers are more interested at targeting the right audience at the right time, rather than a specific publication.

“If data suggests the correct user is viewing the ad, then it is valuable, as long as the environment is brand-safe and fraud-free, then it is of limited importance. That’s why the huge supply trading on the open marketplace drives such attractive cost efficiencies,” he added.

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