Time Inc. is expanding its private ad exchange for domestic digital inventory to include its digital properties worldwide, including brands belonging to its U.K. division IPC, like Wallpaper and the music title NME.
It's another sign that publishers are placing greater emphasis on their programmatic ad sales, a source of both revenue and tension for the business.
Programmatic ad technology, which enables marketers to automate ad buying across a range of sites, is expected to account for nearly 25% of all display ad-spending this year and nearly 30% by 2017, according to eMarketer. But many publishers grapple with the idea of programmatic sales, fearing they will cannibalize their direct sales and undermine ad rates.
Executives at The New York Times have repeatedly blamed declines in the paper's digital ad revenue partly on programmatic buying. Last week, the Times' first director of programmatic ad sales said the company had eliminated his position after less than a year, which some in the ad community took as a signal the Times was retreating on programmatic. Michael Zimbalist, senior VP-advertising, is now overseeing programmatic, according to a Times spokeswoman. "We are currently re-imagining and growing our programmatic organization and strategy with a focus on yield optimization and process automation," she said in an email.
Private exchanges set up with the help of vendors such as Google, Pubmatic and The Rubicon Project are seen as a way to take advantage of ad tech while preventing ad rate erosion, because publishers can make some of their premium ad space available while retaining the ability to establish price floors and approve buyers. "As programmatic has become capable of handling more complex units and data, there's been a rising demand for our ultra-premium inventory," said Andy Blau, Time Inc.'s senior VP and group GM of ad sales.
"We're seeing quite a bit of momentum among premium publishers embracing programmatic," said Bonita Stewart, VP-Americas Partner Business Solutions at Google, whose DoubleClick programmatic platform Time Inc. is using for the global exchange.
$46.8B Record U.S. agency revenue in 2015
Time Inc. has been exploring the space for some time. It introduced an ad exchange called Time Axcess in 2009, replacing it in 2012 with the private ad exchange that is now being expanded. The company's ad revenue from programmatic selling has increased dramatically since the current exchange came online, according to Mr. Blau.
The expanded exchange looks impressive, according to Brian Gleason, managing director-North America at the Group M agency Xaxis. Other publishers haven't always provided enough inventory to make similar offerings worthwhile. "We've seen publishers make announcements like this before, but the inventory hasn't followed," he said, declining to name a specific publisher.
Time Inc. plans to sell editorial-themed packages programmatically through DoubleClick. It's also looking to hire about 10 people to specialize in programmatic selling, with plans to train its 700 existing sales and marketing staff on the technology next month.
Earlier this month, Time Inc. began laying off about 500 people as part of a broader restructuring effort. The bulk of those layoffs -- about 90% -- tore through the company's business and support staff, according to a person with knowledge of the cuts. Time Inc. is planning to spin off from parent Time Warner in the second quarter.