Asda’s ambition to be viewed by brands and media agencies as a publisher akin to the Guardian will see it launch its own private ad exchange in the coming year, but this will not threaten traditional media owners, according to industry experts.
Asda’s senior director of marketing innovation and revenue, Dom Burch, exclusively revealed to The Drum last week, that it is selling unsold ad units programmatically – through Google’s DoubleClick for Publishers (DFP) ad server and Rubicon's supply-side platform – across its major websites, ahead of launching a private ad exchange to “become a credible publisher”.
“We can do what an Express, or a Guardian, or Telegraph group can do in terms of selling audience and we’re only one step away from purchase," Burch said at the time.
Industry observers believe Asda’s plans for a private ad exchange is just the start of a wider charge from retailers looking to wrestle better revenues from their own sites, and potentially from traditional publishers.
Asda attraced over 5.9 million of shoppers to its desktop site in December 2014, according to comScore. In the latest ABC figures, covering the same period, The Telegraph pulled in over 68 million monthly browers (across all devices) while the Guardian generated around 90 million.
However, the key differentiators will be first-party data, which Asda's Burch said it can link to actual purchases as opposed to simply intent, and loyalty.
Mark Syal, partner and head of media practice at Essence, suggested while some traditional publishers may only see users visit the site sporadically, Asda's audience is comprised of loyal customers who visit daily or weekly and it could use this as a tool to persuade media buyers to shift their ad buy.
“If they have an audience that is more loyal than the news site they’ll be competing with, they can use that to persuade buyers that this [the Asda website] is where people are spending time and is a good place to reach them.”
But publishers are unlikely to be too concerned due to the breadth and depth of their own exchanges and the trust they have gained from brands and agencies.
David Pemsall, deputy chief executive of Guardian News and Media, downplayed the prospect of non-traditional publishers, such as Asda, rivalling it for advertising budgets any time soon.
He said that premium ad inventory, shaped around “innovative” ad formats and an “understanding of data and targeting”, has helped it push the proposition of “premium programmatic”.
“There was a time where programmatic looked at aggregating remnants whereas now it’s being understood more and I don’t think it’s a contradiction to talk about premium programmatic,” said Pemsall. “We are playing in that space at the moment and we have relationships with all the big buyers; from GroupM to Omnicom. Thankfully our ability to charge a premium for the quality of audience we deliver means we manage to keep that yield even within the programmatic space.”
Dentsu Aegis Network is working with the retailer on a consultancy basis around the launch of the private marketplace. The network’s UK chief executive Tracy de Groose agreed that the move wouldn’t threaten traditional publishers, describing it as a “brilliant” and “positive” step for the industry.
“Clients are looking at how they can monetise their owned assets, and are looking at how programmatic can help them do that. The kind of thing Asda is doing will get clients understanding the value of programmatic…it wouldn’t ever be a threat [to publishers] but an opportunity.”
However, Asda has to overcome a number of hurdles to offer the same scale of premium inventory, frictionless processes and level of trust which traditional publishers have spent years building with brands and media agencies.
Raising one such issue, Syal said when Asda sets up its own private exchange apparatus, media buyers would have to search it out and wouldn’t have the scope to experiment in the way they can when they connect via a third party.
“We’d have to have a case proven to us that it was worth prioritising [Asda]. I can see why they’ve done it though. Asda thinks it can get better yield, which is a key thing. I hear media buyers complaining that other exchanges don’t necessarily give them great yield and they don’t have the tools to get better yields. By creating your own you can create your own tools and affect your own yield. But the downside is that people have to specifically search you out.”
Syal added that Asda will also have to negotiate offering advertisers rich, innovate, formats and premium position on the site – if they want to generate a worthwhile revenue stream – without distracting from the e-commerce process.
“It’s never been a huge revenue stream [for retailers in the past] because they’ve felt the need to control it. I imagine Asda are going to find some restriction in how far they allow themselves to go, how far they allow brands to go on the site. There’s inertia to overcome.”
However, if it successfully navigates these issues, Tim Cain, managing director at the Association of Online Publishers said that in time Asda and other retailers following in its footsteps would be welcomed into the industry body.
“Our overarching representation and focus is on the role of supporting and developing content led media, and as digital content becomes a core component of more non-traditional media businesses, we would certainly consider the possibility of retailers and those businesses in other sectors joining the association in due course.”