It is one of the leading lights among paid-for online news publishers, with 625,000 premium digital subscribers, but that isn’t stopping The Financial Times from making money from new-style advertising, too.
In fact, while the FT is typically known for selling big brand ads to luxury buyers, it is also taking advantage of programmatic technologies that promise greater efficiencies.
Doesn’t programmatic risk devaluing inventory for which a high-end publisher charges a pretty penny? Not at all, says the FT’s global head of programmatic, Elli Papadaki, who will be speaking at The Drum’s Programmatic Punch conference on 8 December.
Programmatic is changing, and the technology is often misunderstood. What does the term mean to you?
As a brand, we use programmatic to identify new audiences and convert them in to new customers for us, just like many other marketers are doing.
From my perspective in commercial, however, programmatic is a way to create efficiencies in the buying process. We use it as another route to inventory. We are not using it for remnant inventory.
We are trying to bridge the gap between direct and programmatic – we say to buyers, whether it is content, pure-play display or even video pre-roll, our relationship with our audience allows you to leverage data programmatically.
How has your use of programmatic evolved at the FT?
We started trading about three years ago in this place. Our approach was to say, part of our inventory will go in the open exchange. We quickly realised, though, that all that meant is having different price points – you’re half-insinuating the value of the inventory is less good. But, in our case, it really wasn’t.
As of this year, we started saying, we appreciate all the efficiencies … we do want to facilitate that for the buyers we work with. However, the commitment we make to the advertiser is exactly the same as that we do directly.
What is the role of advertising automation in a publisher so reliant on paid subscriptions?
Being premium subscription, we have access to first-party data, which is very hard to find. It means we sell out direct.
If you want to target a C-suite audience, you’re more than welcome – whether through direct or programmatic marketplace. The quality will be the same, we don’t differentiate.
We have a very premium product and people pay a premium price. So we tread a very fine line – we have to be conscious of dangers of serving inappropriate or irrelevant advertising.
This is why we’ve maintained our pricing on par with direct. The very nature of the pricing floors means it excludes certain ads from running on the site – more often than not, we know who we’re trading with. You’re seeing a rise in conversations where the buyer actually knows they are trading with us.
How do you think programmatic execution for the FT’s audience differs from that of other publishers?
We’re trying to shift the perception that programmatic is a different product – it isn’t. It’s a smart way to leverage on existing activities.
We’re trying to educate the buyers and brands we work with to explain ... we don’t have separate programmatic teams – we have a single, unified sales team; they are vertical experts, selling by category, selling across portfolio – whether that be in magazine, paper, insert or digital.
The FT was a founder member of the Pangaea Alliance, publishers’ programmatic cooperative. What is the progress?
We launched a year-and-a-half-ago, and there have been additional publishers added to the ranks. We look at the audiences we’re all contributing and are looking for niches to add to the portfolio.
Brand safety and fraudulent inventory is still a problem when it comes to programmatic buying. For buyers, knowing they can run ads at scale in a brand-safe environment with audiences that are prequalified is quite important.
What’s missing from the programmatic ecosystem?
There is a lack of consolidation and transparency. We often find an obstacle is no standardisation. One technology vendor may say, ‘We require the buyer to have a DSP’, another won’t. Instantly, you have pockets of possibilities, which means multiple systems for the publisher to manage.
Something is going to have to change quite quickly. We increasingly hear frustration in the market – there will be increasing pressure for transparency.
We are seeing brands start to realise the complexity involved with programmatic. There will come a moment when brands evaluate whether to take it in-house. Some will start to do so, but resources will be required.
What changes will reshape programmatic in 2017?
The new European Union General Data Protection Regulation [GDPR] directive that’s coming in to place in the next year or so will be significant. Any business that deals with any organisation in the EU will need to comply. Considering that programmatic is an audience buy, this will throw a spanner in the works.
The fees and penalties if you breach the regulations are significantly higher than in the past. It will certainly force more businesses to take it seriously. If they do have data, they will have to prove they have users’ consent.
It is going to increase the pressure to make sure the quality of data is there and that there is permission from users and consent to use it. It will lead to everyone reconsidering who they work with.
More details on The Drum's Programmatic Punch and how to attend can be found on the dedicated website.