Editor’s note: This is one of 11 case studies featured as part of INMA’s strategic report “Programmatic Advertising Opportunities for Publishers,” released in September.
To date, Guido Conterno describes the approach of Grupo de Diarios América’s (GDA) newspapers to programmatic as a “shy” one.
“There’s been a lot of trial and error in the space to understand how it works,” says Conterno, executive director of the conglomerate made up of 11 newspapers: O Globo (Brazil), La Nación (Argentina), El Mercurio (Chile), El Tiempo (Colombia), La Nación (Costa Rica), El Comercio (Ecuador), El Universal (México), El Comercio (Peru), El Día (Puerto Rico), El País (Uruguay), and El Nacional (Venezuela).
GDA publishers first looked at programmatic advertising sales in 2013 when its individual newspapers began experimenting with serving advertising inventory to visitors from outside their home countries (“out-of-IP” inventory) on the open exchange. GDA used Google’s AdExchange service.
Yet as a group, GDA has focused on private deals with select advertising networks for the media company’s U.S. and European-Hispanic advertising inventories. Each of the channels has a fixed price. “We’re doing a very manual optimisation of the yield of that inventory,” Conterno says.
But importantly, all digital advertising inventory in the newspapers’ home markets is still marketed only through direct sales: “Locally, there’s nothing being done in programmatic.” This is true because of the low CPMs programmatic sales have garnered to date.
For GDA’s individual newspapers, sales in the programmatic space have been limited to non-branded, open auction sales because of technology limitations: Most of the ad servers at its newspapers can target neither individual users nor segment impressions beyond broad channels like sports and rich media (pages featuring videos).
This, in turn, limits what GDA can sell on programmatic exchanges, which keeps CPMs low.
But it doesn’t have to be this way, Conterno argues.
“We have this misconception that programmatic is cheap,” Conterno says. “It’s cheap if you sell a cheap product, which for us is a pair of eyes that knows how to read Spanish. It is all a matter of what you are selling.”
By the end of 2014, most of GDA’s newspapers will have implemented new ad-tracking technology and data-management platforms. This will allow the clustering of users.
By “selling users instead of selling impressions,” Conterno says, CPMs will rise as its newspapers move out of the open market and focus more on direct sales involving specific segments of audience such as business travelers.
Each newspaper experimented with serving advertising inventory to visitors from outside their home countries. Meanwhile, all local, digital advertising inventory continues to be marketed only through direct sales because of the low CPMs garnered by programmatic to date and technological limitations.
“It won’t be very cheap, but it’s going to be programmatic,” he says. “The salesperson will make the deal, but once you make the deal, you load it into the machines, and they will talk.”
With 27 million monthly visitors going to GDA member Web sites each month, the group’s newspapers are among the most-visited sites in their 11 countries.
The use of new data-management platforms that combine all customer records — subscriptions, classifieds, and online user information — will allow the newspapers to use programmatic to re-target their users on other sites, thus expanding their reach even further for advertisers.
Colombia’s El Tiempo, for example, will soon be able to take its 22 million unique online visitors, aggregate their data, and have 22 million cookies with primary user data. “That’s going to give us a very good competitive position,” Conterno says. “Once we understand that we sell users and I don’t have to sell only my own properties, there’s no barrier.”