Facebook’s charm offensive with publishers will lead to more media-owner adtech alliances, predicts AppNexus boss

“Facebook is trying to get publishers to basically give up their websites and their audiences, and that’s forcing publishers to see each other less as competitors and more as allies. It used to be you would fight with your other local newspapers for audience and dollars – now they aren’t the scariest competitors around and that forces different behaviours,” he said.

AppNexus is the adtech backbone for the UK premium publisher alliance, led by the Association of Online Publishers (AOP) and including the Telegraph, Times Inc and Dennis. Although it is still early days for the alliance O’Kelly described Europe as a fertile stomping ground for these kinds of coalitions – more so than the US.

“Fragmentation breeds innovation and Europe is fragmented into multiple markets, and that allows for different pockets of innovation. Whereas in the US it’s only one market, so once the whole market shifts in one direction it’s hard to bring it back.”

The AOP programmatic alliance has been modelled on France’s La Place coalition and it is this ability to learn from what has worked and what hasn’t in other European markets that makes Europe such a strong hub for adtech innovation, added O’Kelly.

The publishing landscape is also splintered in the UK, making alliances such as the AOP one critical for survival if publishers are to maintain good yields.

“The challenges publishers have everywhere is that agencies have a lot of power, especially in the UK and Europe, in fact agencies tend to have more power than publishers. In the US it is much more publisher centric because you have publisher giants Facebook and Google which can beat up the agencies. Whereas here the agencies often beat up the publishers, so it’s an interesting dynamic.

“This is why the AOP alliance is so important – it’s about how can you get 30-odd publishers together and try and create some more leverage there to get a fair price, and hopefully combine their teams and get some people efficiencies and combine their data – all of this we hope will happen with AOP, so they can actually stand up as an entity.

“Otherwise the buyers will just use them against each other and because none of them are as big as Facebook they really can’t say no because it wouldn’t put a marketer out of business if they couldn’t buy from these second-tier publishers but Facebook drives a huge amount of the traffic to these marketers, so it’s all about leverage.”

The AOP alliance isn’t the only premium publisher programmatic alliance in town, with the Guardian leading its own efforts along with the Financial Times and global publishers CNN International and Reuters. O’Kelly described the global nature of the venture, called Pangaea, as “very interesting” but added that it will be “hard to pull off” given the market dynamics between the US and Europe are so different.

Yesterday AppNexus unveiled three new products, listed below:

• It launched its first video buying product designed with wide audience, targeted reach and competitive pricing.
• Introduced IQ, a suite of policies, products and features incorporating strict domain transparency standards and pre-bid policy enforcement, along with spend protection for advertisers.
• Introduced a programmable bidder – a technology created to remove the “black box” practices of certain third parties and give clients more control over their data. This means advertisers and agencies can upload their proprietary algorithms directly to the AppNexus open platform and then optimise campaign outcomes.