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Increased revenue prompts News Corp to take programmatic to next level

By Mark Toner

Editor’s note: This is one of 11 case studies featured in INMA’s strategic report “Programmatic Advertising Opportunities for Publishers,” released in September.

Cameron King calls News Corp Australia’s initial moves into real-time bidding around the beginning of the decade “an easy budget line for us.”

With Australia’s concentrated market insulating News Corp’s domestic sales from large ad marketplaces, the company focused first on automated sales of international advertising inventory.

Aside from reviewing participating advertisers to control ad quality, the process was deliberately “low-touch,” encompassing 15%-20% of traffic from international markets, according to King, the company’s commercial head of platforms and products. 

In 2012, News Corp introduced a similar approach to programmatic sales of its domestic advertising inventory, working with the Los Angeles-based Rubicon Project, which it had previously selected as its partner for international inventory sales. 

Initial domestic sales were limited and, again, “configured in a way that was low-touch,” King says. A trading desk manager was appointed shortly afterward to begin migrating non-display advertising inventory, including mobile and video, into the exchange environment and to build relationships with agency trading desks. 

In late 2013, “the numbers started to become material,” King says, with agency partners adding their own trading desks and telling News Corp that they wanted to “take the friction out of the relationship when you deal with a high volume of transactions.”

Given the shift in customer demand, “it now feels like a model of transacting that (advertisers) feel like pursuing,” King says. 

The uptick in programmatic revenue prompted News Corp to shift from experimentation to considering “the implications of selling our inventory programmatically from a customer perspective, a campaign perspective, and a contract perspective,” King says.

In 2014, King added programmatic sales to his responsibility, as News Corp began building out its trading desks and developing its yield management capacity. 

At this point, the company’s programmatic efforts in the domestic space still remain guided “more by experimentation than overt market pressure,” King says.

Yet over the course of 2014, customers have made it clear that “volume that comes to us via an automated or indirect fashion should form part of an overarching partnership,” he adds, calling programmatic a way for advertising customers to leverage their own data as well as that of their media partners. 

Following a merger of sales teams in 2012, News Corp Australia now has the country’s largest multi-platform sales team, which has been trained to understand the basics of programmatic with support from the company’s experts.

“It’s an intimidating concept because it’s really difficult to understand technically,” King says. “For that reason, you really need to dial up the support and the customer-friendly sales staff.”

This year, News Corp Australia is focusing on “moving up the value chain” through programmatic direct offerings, which King believes will become necessary for advertisers as they seek to automate more advertising buys.

“They’re going to be stuck if they stay with remnant inventory,” he says. “If they want to move up to 50% of inventory, they’ll have to start moving up the value chain to premium and reserved placements. That’s where our business is strongest, so it’s up to us to determine what our business looks like.” 

To get there, the company is working on developing an “intimate understanding of clearance rates and yield,” King says. That learning approach, he adds, is one the news media industry as a whole must undertake to become successful in the space — and one which will require investment in a wide range of capabilities to understand the complexities of programmatic.

“I don’t think it’s the case that all publishers understand their inventory and clearance rates and yield,” he says. “They might understand it from their perspective, but not from the audience perspective. They might be wedded to complex rate cards that don’t translate well to programmatic. There are lots of individual capacities that are important in understanding the value of inventory.” 

Yet King believes such investments will be worthwhile in the long run: “It’s rare for such a shift in our industry. You could look at programmatic as an opportunity for a large player like News [Corp] to reset expectations.”

About Mark Toner

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