Machines are now selling some print ads at Time Inc.

The nation's largest magazine publisher -- owner of People, Time, Sports Illustrated and InStyle -- is letting marketers buy print ads with the same automated technology used to buy digital ads. This type of deal, where a computer facilitates a transaction, is referred to as programmatic ad buying.

Target is the first brand to buy ads from Time Inc. in this manner. The retailer's media agency, Haworth, handled the deal, buying ads in People, Entertainment Weekly, Time and Sports Illustrated.

It's A Programmatic World
Programmatic ad-buying is a booming practice among digital marketers. Nearly $15 billion worth of digital advertising budgets will be spent using this technology in 2015, according to an eMarketer forecast. That represents 55% of all the money spent on digital display ads in the U.S.

"Our overall strategy is to use automated marketplaces as a way to alleviate some of the work we have humans doing, so they can do more custom content integrations," said Kristi Argyilan, Target's senior VP of media and guest engagement.

The use of programmatic technology is growing "exponentially" at Target, she added. "The ability to start to experiment with print and buy it programmatically fits nicely within our overall strategy."

But the practice is also deeply concerning to media executives. Publishers drop their unsold ad inventory into online auctions, where machines bid on them. What started as a way for publishers to get rid of excess inventory has morphed into a way for buyers to get audience segments cheaply, leading to price erosion that's cascaded across the industry.

Although print sales are in decline, ink-on-paper ads typically cost more than digital and are subject to a different set of market pressures. Several media executives suggested a move to programmatic could undermine print rates.

Andy Blau, senior VP and group general manager of ad sales at Time Inc., dismissed this idea. "It's not an easy to way to get cheap rates," he said.

That's because Time Inc. -- like other so-called premium publishers -- stemmed some of the decline in digital ad prices by creating a private exchange, where it sells ads across its websites using programmatic technology. Buyers like the ease as well as the ability to plug in data they have on their customers to better target ads. Time Inc. gets to establish minimum prices so the value of their ads doesn't fall into the nickels and dimes (or even pennies) range.

How Print-Programmatic Works
The print-programmatic platform, which ad-tech firm MediaMath helped develop, is nearly identical to the one Time Inc. uses to sell digital ads, according to Mr. Blau.

Media-buying agencies can use the platform to select the audience they want to reach, including "luxury," "women," "men," "lifestyle" and "business/finance." (Time Inc. plans to offer more segments in the future.) Buyers don't know in which magazines their ads will run, only that they will likely appear among the titles in the audience segment. They can request specific placements and positioning around certain editorial content, although that might require separate negotiations.

The chief difference between print and digital programmatic is the data. Marketers can not apply their own audience data when buying print on the programmatic exchange, according to Mr. Blau, who expects that to change in the future.

Magazine publishers including Time Inc. already sell audience groups in print magazines. That means, for instance, your 65-year-old mom's issue of People might have different ads than the one your 35-year-old sister receives. Publishers can also guarantee the editorial context of where the ad will appear in print. Campbell's might want to appear next to an article about soup.

What programmatic does is eliminate the human salesperson -- and that could be an attractive proposition for cost-conscious Time Inc. executives. The company went public last year amid a blistering environment for magazine publishers. During the third-quarter, Time Inc. reported a slight gain in revenue to $821 million, but the uptick was thanks to several one-time transactions.

Mr. Blau said the introduction of a programmatic exchange is not a waystation on the road to salesforce layoffs. "This doesn't replace the sales person," Mr. Blau said. "What you can't do with programmatic is big ideas across multiple platforms."