"Content aggregators would like to commodify our content, while
data scrapers would like to aggregate our audience -- the only way
to reach the world's greatest content and the most prestigious and
lucrative audiences is directly through our digital properties.
Third parties are no longer invited to the party," said News Corp.
CEO Robert Thomson in a statement.
Over the past few years big-name publishers including Conde Nast, Business Insider and Hearst
have erected private advertising exchanges as a way to cordon off
prized display inventory and make it available only to certain ad
buyers at certain prices. The rationale: protect the value of
prized direct-sold ads and prevent third parties from skimming
margins and data.
Those private exchanges have been largely experiments with only
portions of inventory allotted to them and results mixed --
Forbes has
seen more value in open exchanges. But News Corp. has decided to
commit to the closed model.
News Corp.'s motivations are two-fold. First, it believes it's
leaving money on the table by selling ads via ad networks that
prioritize audiences over content. That is, ad networks pitch
advertisers on the ability to target, say, a business executive but
to do so on the lower-priced gossip blog he or she may read during
lunch than on the more expensive Wall Street Journal.
Second, News Corp. wants to stem the ability for third-party ad
tech companies to siphon their audience data. By dropping cookies
or other tags on News Corp. sites, those ad tech vendors would be
able to those those visitors on and off News Corp. properties and
create audience pools such as "New York Post readers interested in
the Yankees" to sell advertisers those audiences on other sites,
without cutting News Corp. a dime.
News Corp.'s private exchange aims to attract advertisers based
on the audience its properties' attract and the first-party data
the company is able to collect on that audience, such as addresses
provided when subscribing to a publication or email addresses when
registering an account that retailers and others could
hypothetically use to target people in their own customer
database.
News Corp. is partnering with automated ad seller Rubicon
Project on the private exchange. The ad tech firm, in which News
Corp.
took a minority stake in November 2010, will provide technology
to sell desktop and mobile display ads via real-time, Wall
Street-style auctions as well as to process ads sold directly via
the publishers' sales teams, said Matthew Karatz, chief of staff
and head of strategic operations at Rubicon Project.
According to a spokeswoman, News Corp. has been winding down its
relationships with ad networks over the past year. It will
discontinue remaining arrangements with third-party networks as it
rolls out the News Corp. Global Exchange in the coming weeks.
Those networks included Manhattan-based Tremor Video and Undertone, an insider said.
Wednesday's announcement served as a reminder that the new News
Corp. is still the company that used to characterize Google as a vampire for
making money by aggregating content it didn't own—like that
of the Journal or New York Post, which the company also owns.
According to Outsell Inc. media analyst Ken Doctor, newspaper
sites can set minimum prices on their own exchanges that are 20% to
50% higher than what they would get from ad networks. He added that
News Corp. is well suited to operating its own exchange since it
can offer advertisers space across more than 50 websites.
"News Corp., having multiple brands and distinct yet overlapping
audiences, has more ways to mix and match," Mr. Doctor said.
-- Crains' New York Business contributing
