What Marketers Should Know About Buying Publishers' Custom Audiences

(And What Publishers Should Know About Selling)

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When print was thriving, advertisers would simply use brands as a proxy for the audience they wanted to reach. Want moms? Buy People magazine. Now marketers know more about their targets, have better tools to find them and more ways to reach them. And traditional publishers stood by as digital-marketing budgets flowed toward audience-generating machines like Google's ad networks, Facebook and Twitter. But publishers are fighting back by building ad networks of their own. They're offering ad packages through tech-driven sales platforms designed to meet marketers and media agencies on the new playing field. "We should be thinking like a Google, Yahoo or Facebook," said Chip Schenck, VP-programmatic sales at Meredith. "The flow of money can begin to equalize."

Four Things Publishers Should Know About Selling Custom Audiences

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SELLING AUDIENCES WON'T KILL YOUR BRANDS
People and GQ may not look as highly targeted as they once did to advertisers, thanks to the shift to digital media. But well-known and respected brands haven't been completely trampled in the process. Marketers want to reach a specific type of consumer, but they're also looking for safe environments in which to serve their ads. "It's not just the audience," said Andy Blau, Time Inc.'s senior VP-group general manager of ad sales. "It's the context of the audience."

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BIG AUDIENCES ARE A REQUIREMENT (JUST NOT TOO BIG)
Don't bother pitching a custom audience to buyers unless it's big. "If you can't scale it, it may not be worth selling," said Mr. Blau. Publishers with multiple titles can package them to create large scale. Drawing in third-party sites, however, can water down a publisher's data and undermine ad rates in the transaction. Aim for "meaningful scale," said Josh Stinchcomb, VP-corporate partnerships at Condé Nast, the publisher of brands including Vogue. "We aim to target a certain kind of person: the influential among us," he added. "There is a finite number of people who fit that description."

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ESTABLISH A PRICE LADDER TO PROTECT YOUR AD RATES
Marketers increasingly want to use programmatic technology to buy ads, and plenty of publishers blame its automation, bidding and other elements for undermining CPMs -- the cost-per-thousand page views. But don't blanch. Programmatic doesn't have to mean shrinking ad rates if certain measures are taken. Most importantly, establish pricing and stick to it. "Make sure your CPM ladder is sacred," said Mr. Schenck. "The more data they get, the higher price they pay. You have to apply that formally and religiously, otherwise you'll be undercut."

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TRAIN CURRENT SALES STAFF, HIRE FOR THE FUTURE
Understanding complicated data can be a challenge for traditional ad sellers. Publishers' data wonks are training and working alongside non-wonk salespeople, while hiring people with a mix of qualitative and quantitative skills. "The question we're asking is how we train people to support our existing needs and hire people to think about the future," Mr. Stinchcomb said.

Four Things Marketers Should Know About Buying Custom Audiences

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PREMIUM PUBLISHERS STILL HAVE SOME ADVANTAGES
Traditional media sites offer a safer environment and data gleaned directly from readers. You likely won't find your ad next to a questionable piece of content if you buy a package from a premium publisher. "Not all audience data is created equal," said Kathy O'Dowd, senior manager, programmatic buying-North America at Netflix. "We're moving away from third-party data and have looked for who has the first-party data -- publishers." Expect to see premium publishers try to cash in with higher rates.

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PUBLISHERS' TECHNOLOGY IS BEGINNING TO CATCH UP
"Folks on the demand side have been far ahead of publishers in general," said Mr. Schenck. But publishers like Meredith, Time Inc. and others have invested in tech, including their data-management platforms (DMPs), which they use to store and analyze reader data. "They're getting smarter about leveraging their DMPs," said Matt Prohaska, principal, ProhaskaConsulting.com and former programmatic-advertising director at The New York Times. "The platforms that work on both sides have been built on the buy side, but things should balance out in the next nine to 18 months," he said.

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NOT ALL AD CAMPAIGNS NEED THE HELP OF A COMPUTER PROGRAM
In theory, programmatic technology should make big ad campaigns easier and faster to execute. "If you're thinking about doing something at scale, programmatic becomes extremely important," said Brian Gleason, managing director-North America at the GroupM agency Xaxis. But if you're looking for custom sponsorships and doing different kinds of things with different segments of ad inventory, talking to an actual ad-seller might be a better route. "We're working with clients in both ways," said Todd Haskell, senior VP-chief revenue officer of Hearst Magazines Digital Media.

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SERVING ADS ACROSS MOBILE AND DESKTOPS IS THE NEXT WAVE
Imagine consumers spotting your ad on a publisher's desktop site and later seeing a similar ad from that campaign on the publisher's mobile site. That would align nicely with the way people consume media, Mr. Prohaska said. "But it's hard to do. The pipes on the buy and sell side are not aligned," he said. That could all change in the next 12 to 24 months, according to Mr. Prohaska.

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