AOP chair calls for more publishers to embrace private ad exchanges to protect online yields

The result is that advertisers demand high volume for cheap rates, which they can buy on a programmatic basis, rather than paying premiums for unique, quality inventory, which is having a detrimental effect on publishers’ yields.

“One of the big problems in the market has been down to the fact advertisers, ad agencies and ad networks are trying to get better prices, which means they start losing sight of the value quality content brings. It is not sustainable for any publisher to have a valuable audience if the advertisers or agencies continue to drive the price down,” he said.

However, private exchanges are designed to ensure the publisher or media owner can retain control of their floor prices as well as what inventory can be traded on a real-time bidding (RTB) basis.

Barnes, who is also head of digital and tech at Incisive Media, said open ad exchanges are not always appropriate routes for publishers with high-value, unique audiences. For example, Incisive Media, which launched its own private exchange last year, has a title called Central Banking, which is distributed to the world’s central banks.

“There is only a limited number of central banks in the world, and the strategy is that only five to ten people in each of those banks have access to the site and receive copies of the magazine. So it is never going to have 2m page views, but it will have pretty much every central banker in the world.

“You can’t tell me that’s worth £10 per thousand (CPM), that’s worth hundreds of pounds per thousand. So why would I want to let an ad network or exchange buy that for a poor rate when no other publisher can claim that same audience? That’s where the private exchange comes into play,” he said.

His comments follow last week’s news that Rupert Murdoch’s media behemoth News Corp is to launch its own private ad exchange to better control its advertising across its global portfolio, and cut out third-party ad networks from accessing its inventory.

“News Corp has locked its sites down and put a wall around them so it can trade on its own terms and control what cookies are going onto its machines,” he said.

Barnes said publishers were shocked by the volume of third-party cookies being dropped on their sites – a factor highlighted after the arrival of the cookie directive, known officially as the EU e-Privacy directive.

“We realised as publishers we wanted to know how many third-party cookies were being written onto our sites, and everyone was universally shocked when we started doing cookie auditing and saw just how many third-party cookies there were.”

He said that commercial partners still scrape data from publishers’ audiences by dropping cookies on to users’ machines, and that for publishers to take back control of this process, they must follow News Corp's example to ensure they can protect their future ad yields.