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Future’s programmatic … future

One of the UK’s leading specialist consumer publishers is using programmatic trading of its online inventory to give advertisers more choice and improve consumer targeting - and at the same time lift its own CPMs. Jo Bowman reports.

By Jo Bowman

As Future Publishing links its central and digital agency teams into one central agency unit, with a new team of senior executives at the helm, it is using audience and traffic data to optimise the supply of inventory – and rates – primarily through private market places but also on the open online market.

Future’s publishing stable spans sport, hobby, music, gaming and computing titles. The recent restructuring puts Gerson Barnett as head of third party revenues & programmatic, with Rob Elms in the new post of head of trading under Stuart Staves. Future brands reach more than thirteen million unique users every month in the UK, and the restructuring is designed to help advertisers and agency partners reach those audiences more effectively and efficiently.

Barnett says programmatic trading – the automated system through which software rather than people put together deals that match advertisers’ needs with publisher inventory – is being used to serve more than 300 million ad impressions each month, a figure that’s forecast to grow rapidly as both buyer and seller side become more comfortable with the process.

“Future’s programmatic growth will be heavily dictated by how quickly clients and agencies fragment and migrate their budgets to trading programmatically,” he says. “Some of our key direct sales agencies project 15 per cent of their digital display investment will be programmatic in 2014, and believe media owners similar to us will open 20 per cent of digital inventory to programmatic buying comfortably in the next two years. I don’t disagree with this prediction, but this will ultimately be dependent on the pace of clients and agencies moving their budgets to programmatic.”

Future’s programmatic strategy, Barnett says, is based on an “open door” policy, which allows clients and their trading desks to link their demand-side platforms with the publisher’s supply-side ad technology. At the heart of this is data-driven insight into audiences and their behaviour, enabling advertisers to programmatically target specific audiences and buy inventory in a private marketplace. The effect of this is that high-value display inventory can be sold at a premium price, rather than on an open exchange, where rates tend to be lower.

“Although the main focus will be aimed at private marketplaces and premium programmatic, as part of the strategy, we will also devote time interrogating analytically our RTB offering by identifying ad technologies that can assist to improve CPMs in our open exchange and ascertain new trading initiatives that can drive positive floor prices, better yields and higher fill rates across our global territories.”

Rising stars

The premium programmatic marketplace is seen as the way to get top dollar for inventory that goes beyond the space being sold by the human direct sales team. “Overlaying first and third-party audience data segments from our data management platform (DMP) on user demographics and contextual interests will turn unsold inventory into very desirable inventory that can be traded programmatically,” Barnett says. He is reluctant to put a number on the CPMs that are being achieved programmatically, but says it’s into double digits for what the Internet Advertising Bureau (IAB) calls “rising star” formats. These formats include giant billboards and filmstrips, overlaid with data segmentation and delivered at the right time for the target audience.

The data that adds so much value to inventory by detailing the kind of people who are seeing each impression and indicating their value to advertisers, is at the heart of the shift towards programmatic, Barnett says. He says the company’s data management platforms allow clients and agencies to gain insight on users, and then target them differently according to their interests and whether they are already enthusiasts or are ‘intenders’.

“This is based on the frequency of visits to our content within a specified period of time. The value of data is dependent on type of content the users read – such as articles or review pages. In addition, we can also ingest demographic data from our registrations and subscriptions that will give us deeper insight. Currently, we’re creating bespoke pools of audience data that clients and agencies can use to target programmatically in real time or with set campaign-time key performance indicators.

“One of our initiatives is to promote the science behind using data and programmatic together, showing how it can deliver efficient campaigns with insight and healthy results. We believe using our first-party data is the lifeblood of effective programmatic audience targeting. We’re working with trading desks to create bespoke packages that can allow them to target our audience using data segments built in our data management platform, and we’re also looking to offer data segments that can be bought ‘off the shelf’.”

Multiple markets

There has been much hand-wringing in the publishing world about the assumption that by releasing what’s seen as top-quality inventory into auction-style sales processes, there’s a risk of that inventory being written off as remnant and sold for peanuts. Walled gardens, in which inventory is curated and offered only to a select group of potential bidders, sometimes with guaranteed floor prices, are an alternative. At Future, the sales strategy uses both approaches.

“Our RTB offering is an open market and our premium programmatic is a walled garden environment through private marketplaces and private auctions,” says Barnett. Opportunities for big advertisers to cut up-front deals at fixed prices are also on the radar.

There's a lot of discussion about the provision of guaranteed minimums for publishers trading programmatically, and perhaps linking up-front deals for big advertisers with the ability to approve individual impressions in real time. “Absolutely,” he says. “It’s imperative that trading programmatically incorporates the direct sales needs of our big advertisers. We are actively including programmatic terms within our larger agency group trading agreements.”

In addition to traditional ad revenue, funds are also being generated through new media opportunities off the published page, which operate on straightforward CPM terms in some cases, and on revenue-share models with third parties in others. “We deem third-party revenues to be any commercial real estate that is on the page and isn’t sold by our direct sales team. Revenues are from third-party premium display ad networks, content discovery, contextual and image initiatives, mobile, video and app opportunities, as well as our RTB / programmatic opportunities.”

New skills

The new leadership team at Future has experience across technology, media agencies and the client side. Stuart Staves was previously advertising director for Future’s Technology Group and, prior to joining Future, was sales manager for Haymarket’s FourFourTwo, before heading up Haymarket’s London 2012 Official Media, working on cross-platform campaigns. Rob Elms, now head of trading and a five-year veteran of Future, has experience at agencies including MEC, MediaCom and MediaVest, working with clients such as the Central Office of Information, Kraft Foods, Heineken and Fiat. Barnett, meanwhile, was previously head of digital sales at Telegraph Media Group before moving to Future as advertising director of the Sport Group and then digital sales director. “I believe my time working in other areas of the digital display business will only strengthen our position to deliver and exceed our programmatic expectations by working closely with our direct sales teams,” says Barnett.

The push towards programmatic sales has not led to a reduction in the ranks of the human sales team, and nor will it in future, Barnett says. The link between the physical staff and automated side of sales is, so far, limited. “In our initial stage of programmatic, direct sales will only be involved in private marketplaces (premium programmatic), whereby they are working closely with the programmatic to share intelligence on direct sales campaigns and monitoring key client and agency activities using private marketing places.”

The digitisation of the sales process means that the demands of the role are evolving, and it now takes a slightly different set of skills to be effective in publisher sales than it did a decade or so ago. “It’s vital that the sales person can fully understand the make-up of our entire inventory from direct sales, premium third-party display through to RTB / programmatic and, importantly, understand how this inventory is managed within our ad server,” says Barnett.

“Having an analytical approach is also crucial based on how impressions are traded in a programmatic environment. In addition, the sales person must have the traditional persuasive sales skills that can sell our audiences and give solid rationale behind pitches to win campaigns. Therefore, the ideal sales person is a person with traditional digital sales experience that has in-depth knowledge of ad trafficking and is able to think and sell analytically. We need a hybrid of a Mad Man and a Math Man!”

Does Barnett see a time when all – or almost all – inventory will be traded programmatically? “Yes,” he says. “Provided there are advertising technology platforms that are commonly available, intuitive, robust and intelligent enough to manage our entire inventory dynamically within our ad server, and if we decide to move our direct sales strategy to open premium auctions. This will be dependent on the demand side. At the moment we are some way off from this happening, however, I think this landscape will happen in a few years for some media owners.”