Hearst Unveils Private Ad-Buying Marketplace for Its Magazine Websites

A Play for Programmatic Online Advertising Dollars

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Another big magazine company is looking to ad tech to make its online ad inventory more valuable.

Six months after Conde Nast launched a private ad marketplace to increase the sell-through of its online ad space without opening it up to public ad exchanges, Hearst Magazines' digital unit -- Hearst Digital Media -- is starting to work with an ad-tech vendor on its own exchange.

Unlike Conde's exchange, though, Hearst Digital Media's platform is not aimed at increasing sell through on its sites; the company will continue to partner with select display and video ad networks to unload its unsold ad inventory. Rather, the new "audience exchange" (as Hearst is calling it) will let advertisers who are making upfront buys with Hearst's direct sales team target specific groups of consumers across Hearst Digital Media's 25-plus online brands, which include web and mobile sites for Seventeen, Elle, Good Housekeeping and Esquire.

For example, Hearst will start selling the ability to target ads to readers it has grouped into various food-related audience segments -- "dieter" may be one audience segment and "entertainer" may be another.

Advertisers' trading desks or demand-side platforms will plug into Hearst's exchange -- powered by Pubmatic -- to execute these buys. In theory, more targeted ads should generate better returns for these advertisers who are already doing business with Hearst. And happy advertisers usually mean increased budgets the next time around.

What's unique about this exchange is that it will also be connected directly to a Hearst-owned data-management platform that brands use to organize and create their own customer profiles and audience segments based on their own first-party data. This integration means advertisers can easily port over their own segments that they've created and then target ads to those custom groups across the Hearst sites.

The data platform came to Hearst in December, when Hearst-owned digital agency iCrossing acquired a company called Red Aril. Separately, Hearst Digital Media eventually plans to use the data-management technology to help it group its own readers into different categories and personalize the content experience for each set of readers, according to Kristine Welker, the unit's chief revenue officer.

Hearst's hope is that the new audience exchange also helps it tap into budgets that its existing direct-sales advertisers have set aside for automated ad buying.

"We definitely recognize the growing need for efficiency," Ms. Welker said.

Hearst Digital Media properties registered 20.3 million unique visitors in May, up 39% from 14.6 million in the same month last year. When broken up into audience segments, the potential reach for a given ad buy is much smaller. With that said, Hearst plans to eventually allow advertisers to extend their audience buys to the digital properties of Hearst newspapers in addition to its magazine sites, according to Ms. Welker.

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