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February 25, 2018

New News Ad Networks Aim to Keep Bigger Slice of the Pie

Important Details: There’s no shortage of online ad networks out there, and the number’s recently grown by two. In the US, Gannett and Tribune, two of the three largest news publishers, announced a new network, quadrantONE, which is jointly owned by the two as well as by Hearst Newspapers and the New York Times Company.

  • quadrantONE includes websites (newspaper- or broadcast-related) in 27 of the top 30 markets. Those websites collectively reach 50 million unique visitors a month.
  • The aim of the network is to aggregate news-branded local sites. While Gannett is involved, its national USAToday.com site is not. While New York Times Co. Boston and regional newspaper sites are involved, NYTimes.com itself is not.
  • Each participating site is devoting 10% of its inventory to the network, guaranteeing space for advertisers.
  • The venture will utilise a sales staff of 17, based in Chicago.
  • A so-far unnamed technology partner will be associated with the venture.

Meanwhile, Reuters, which has been moving innovatively ahead on many online fronts, announced a major addition – Guardian America – to its own affiliate ad network, which it launched in December. The network, which targets business news audience demographic for advertisers, will now reach about 10 million monthly unique visitors, Stephen Smyth, general manager of Americas Reuters Media, told Outsell.

“[Ad] buyers are looking for one-stop shops which favor portals,” says Smyth in explaining Reuters’ new push. Smyth says that top news brands are being lost in a high-volume, lower-CPM pay-for-performance world. His formula for regaining position and earning top ad dollars is several-fold: keep control of sales of Reuters, Guardian and other authoritative content presented within the brand context and underpin it with state-of the art ad management technology that provides the analytics that today’s busy digital ad buyers require. Smyth says that a thorough set of analytics is a minimum requirement for today’s ad networks and points to his technology partners (Doubleclick for ad serving, Revenue Science for behavioral targeting, Operative for inventory management, Salesforce for CRM and Rapt for forecasting and pricing).

“The water level [in digital ad sales] is rising. Everyone needs to have numbers and the analytics to even be in on the RFP,” he says.

Guardian America, Reuters’s “cornerstone” partner, has grown its presence since launching its US edition in October, now reaching five million unique visitors monthly (out of 18 million in total), according to Tom Turcan, general manager of Guardian News and Media (GNM) Digital. Its American presence is anchored in a Washington, DC-based editorial staff of seven, with all supporting business and technology operations based in the UK. Reuters will be its exclusive ad rep in the US. Turcan says that while the company uses Value Click for its lower-value inventory, the aim is that the Reuters affiliate partnership will produce “quality response” higher CPMs in niches such as international travel and personal finance.

Implications: News about these two networks coincided with the placing of Yahoo! into play by Microsoft’s buyout offer. One implication of that offer has been a questioning of the US newspaper industry’s growing reliance on Yahoo! as an ad partner. As Yahoo! and Google (as well as MSN and AOL) have come to dominate online advertising, buying up numerous ad tech companies, major news publishers wonder about their own place and how to reassert it.

While the answers are far from clear, Outsell believes that two fundamentals will separate out winning ventures from the also-rans:

  • Number one on the list is state-of-the-art integrated ad technology, as Stephen Smyth points out well. In an increasingly measurable and trackable world, only ad sellers who can provide the range of analytics that ad buyers need to make and adjust buying decisions can succeed. Clearly and publicly, Reuters has thought this out. quadrantONE, on the other hand, has neither publicly named any partners and, we are told, hasn’t shared that information with other would-be network members, several of whom decided against investing in the venture.
  • Scale is key. Reuters is trying to build it in within a business audience demographic. That may work as it is a well-sought-after audience commanding top-end CPMs, including $100+ for video. For quadrantONE , that may be more difficult, and it will have to answer the question of whether it is really scale or sub-scale. Advertisers have had numerous choices for targeting “local” and through larger networks. Centro has performed well for local operations, based on larger scale than quadrantONE can offer, while Real Cities, the old local network, has foundered. Networks aren’t about publishers’ desire for more revenue or higher revenue splits; they’re about better serving advertiser needs, and that’s what will decide their success.