The emergence of the publisher cooperative, or alliance, was one of the key trends in the UK digital media scene during the last 12 months, but questions remain over the model. For instance: can former foes successfully band together? What exactly does the new proposition pose to the market? Most importantly, will advertisers want to do business with them? The Drum probes further.
UK-based publisher collective Pangaea - formed by The Guardian, FT, CNN International, The Economist and Reuters - was soon followed by the announcement of the AOP-led equivalent Symmachia - representing Dennis Publishing, Telegraph Media Group, plus Time Inc.
Pangaea launched in beta in April this year, and has since appointed Fiona McKinnon, the outfit's general manager, and Cadi Jones, sales director, to help the running of the outfit. Meanwhile, Symmachia is understood to be in the process of working with its individual members to sign them up to the proposed outfit, with members understood to be taking legal precautions due to concerns about how such as body would be viewed under competition laws.
Sources approached by The Drum have explained how particular areas of concern centered around vulnerabilities to charges of price-fixing, with prosecution over such charges potentially leading to prohibitive fines.
However, those with knowledge of the initiative have told The Drum the alliance should be ready to launch before the close of 2015, with Seventures acting as the operational face of Symacchia, with responsibilities for running the marketplace, along with billing and invoicing
Once launched, the offering will be based around the inventory being presented in verticals such as motoring, sport, travel, etc. In addition, there is also a roadmap in place for phase two of the launch with the potential to add mobile, rich media, video, as well as unique ad formats on top of more data-led segmentation.
The European alliance precedent
The emergence of both Pangaea and Symmachia - powered by Rubicon Project and AppNexus respectively - echoed moves elsewhere on Continental Europe, most notably in France where La Place Media and Audience Square blazed a trail for the model since late 2013.
Here the ad tech pairing of AppNexus and Rubicon heralded the alliance model as the best way for premium publishers to confront the threat posed by scaled global players, such as Facebook and Google, when it comes to media spend.
However, question marks have since been raised over the model, with La Place Media's initial managing director Fabien Magalon leaving to join Facebook-owned supply-side platform (SSP) LiveRail in August this year.
Meanwhile, reports in the French language media cite subsequent moves from members of the alliance as an indication that their enthusiasm for the model was cooling, this was primarily due to the emergence of ad tech vendors (notably AppNexus and Rubicon) also offering them the ability to sell inventory programmatically via private marketplaces, or PMP, see video below.
Condé Nast opts out of Symmachia
The creeping sense of unease over the model was further underlined this year when The Drum revealed that Condé Nast was pulling out of the AOP-led alliance, instead that its unique content is best suited to selling inventory programmatically in a “bespoke, controlled” manner.
Indeed, Fabien Magalon, La Place Media's founding managing director, earlier told research and events company ExchangeWire how many publishers experienced difficulty in working with former competitors, especially when it came to having full autonomy over their own programmatic strategy.
The potential for 'data leakage'?
Given that the alliance model asks members to pool their data and inventory, The Drum approached individual members of Pangaea, with particular reference to the potential for 'data leakage' (i.e. the potential for individual publishers to lose out on the uniqueness of their own insights).
Answering questions from The Drum at the recent ACI Publishers Summit, Emily Palmer, Thomson Reuters, head of programmatic, explained how it was working to mitigate any data leakage, both within and outside of the alliance setting.
"Through Pangaea, we have a separate instance - we use Krux [as a DMP] - and each of the publishers pushes data in (the data that we each agreed to share, not all), and then it's a separate account," she said.
"So it's not like I can just sneak in there [the collective Pangaea data pool] tomorrow and just take some of the data."
Palmer went on to explain how it was working with the Media Trust to "see how the data is branching out" by auditing what parties are dropping cookies on its users, she said, when discussing the publisher's individual precautions.
"As a publisher we use a DMP , and we use Lotame for that, and it can also sell on third party data (which is anonymised and not sold as ours) but one of the things we're looking at is mitigating data leakage before we start to sell data," she added.
Similarly, Stephane Pere, The Economist's chief data officer, also told The Drum how his outfit was also working with the Media Trust to ensure security. He further added how The Economist's involvement with Pangaea was limited to supplying inventory, due to potential concerns around "commercial value leakage".
He went on to say: "You get some agencies or vendors trying to drop retargeting pixels, and we've just signed a deal with Media Trust to scan the ad tags and report of data leakage. One thing we tell clients that you cannot add tags without asking us first."
So what's the unique value of a publisher alliance?
Speaking at last week's Publisher Summit conference, Thomson Reuter's Palmer went on to explain how her outfit wanted to balance monetising its inventory via Pangaea, along with selling inventory via PMPs.
Speaking at the same event was Pangaea's sales director, Cadi Jones, who spoke about the outfit's unique offering to the market, who said the alliance enabled advertisers to engage with each publisher's audience at scale.
"So for instance, one of our readers might wake up in London and go Reuters to find out what happened in the Asian stock markets while they were asleep. We know that reader is a business user, and that they might then go to The Guardian to look up the travel section. We then know that this is a business user that is planning to travel in the near term," she said.
"So as Pangaea, we can know all of this, in a way that none of the publishers could know individually."
Jones went on to echo AppNexus' and Rubicon Project's message that media buyers looking to buy quality audiences at scale using data-led insights have thus far struggled to do so at scale.
"So in terms of the differentiation it is that first party audience data at global scale," she concluded.
Balancing the offering
Likewise, Telegraph Media Group's commercial director, digital Mike Buckley, explained how Symmachia will be a core pillar of the publisher's programmatic monetisation strategy, as a means of limiting the amount of inventory is sells via open marketplaces (where inventory traditionally returns a lower yield), in addition to its own PMP.
He added: "After launch, Symmachia will be able to offer circa 1 billion impressions per month to market, and being part of that scale is appealing to us in parallel with our own programmatic offering."
Additionally Buckley explained to The Drum that premium publisher alliances will provide advertisers assurances over fraudulent traffic, a topic that has generated much negative coverage in the past 18 months.
But how do advertisers feel about publisher alliances?
However, key questions remain over advertisers' interests in such an offering, with much of their pending fortunes lying in the transparency of the offering, despite their claims to take the 'black box' out of programmatic media buying.
Mark Syal, joint managing director, and head of media practice at GroupM-owned Essence, told The Drum: "Essence’s experience working with consortiums in Europe is that, potentially they provide significantly less transparency than when we work directly with media owners.
"This inhibits our ability to buy the inventory that we most require and our ability to optimise. Pangaea may succeed for us in this regard as it is possible to buy directly and transparently with each of the constituent publishers. Buying with Pangea offers convenience, scale and presumably price benefits, but the trade off is control and transparency."
The Drum will host a conversation on the viability of the publisher alliance model at its Programmatic Punch event hosted on 8 December in London, with representatives Pangaea, Telegraph Media Group, and Symmachia, with Essence's Mark Syal also on stage to interrogate the model. Click here to find out more.