After earning reports were released last week the industry started to question what the real impact of programmatic buying will be on publishing. Interest escalated when the New York Times cited programmatic as having already affected their digital ad revenue decline for the quarter. There is no question that programmatic buying will influence publisher yields as direct sales to agency/client are always going to capture a higher CPM and often a larger deal size. But the impact that programmatic is having at the moment is primarily focused on national advertising campaigns. This in turn affects national magazines and national newspapers much more dramatically than metro or community papers.
Both metro and community papers for years have put their out of market inventory up for sale through third parties with the understanding that yields would be lower. When someone in Cleveland visits a newspaper website in Dallas to read more about the Cowboys they generate ad impressions for the Dallas paper. To maximize revenue, local properties make out of market inventory available for sale through third parties and exchanges where programmatic buying resides. For them, programmatic has been an important tool to generate passive revenue. In market traffic is something they monetize effectively through their local sales staff usually securing strong cpms in the process.
For national properties, the challenge is clearer and the resolutions are more complex. They require that publishers develop unique, first to market products that allow advertisers to do things they couldn’t do before. When these products work they create demand and command a premium. That’s why native is the word of the day. It allows marketers to explore a new frontier that is difficult to replicate in a programmatic buy. It’s also why pay wall models have begun to change. Technology like Google Polls creates a porous barrier to content and affords publishers a more user friendly toll booth that doesn’t deter traffic or engagement.
Programmatic isn’t going away and has already set its sights on broadcast as the next frontier. In the interim, publishers will need to continue to develop pathways to remedy the immediate losses programmatic creates. So far the solutions they have created are those that the marketplace welcomes. If that continues, it will not only guard revenue but make the user dynamic on newspaper platforms even more compelling and important.
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