MAGNA GLOBAL reports that 63 percent of all display
advertising in the United States will be programmatic advertising in 2014, up
from 50 percent in 2013. By 2017, MAGNA GLOBAL predicts other countries will be
close to the level of the United States in terms of penetration of programmatic
advertising compared to other digital display categories.
For example, the countries outside the United States with
the predicted highest penetrations of programmatic advertising in 2017 are the
Netherlands, 70 percent; United Kingdom, 59 percent; France, 56 percent;
Australia, 52 percent; and Japan, 40 percent.
As these and other countries ramp up programmatic buying
strongholds, publishers are recognizing the value in occasionally partnering
with their longtime competitors in order to bolster their national advertising
businesses.
The most important advantage of developing national networks
is improving national advertising revenues. Publishers and broadcasters in many
countries have seen their national advertising diminish. For example, national
advertising in the United States dropped 11.7 percent from 2011 to 2012 alone.
An advantage to developing advertising consortiums is to re-gain lost national
advertising. The key is to aggregate as many publishers and geographies as
possible to create a “national buy.”
National advertising networks are being built by publishers
and broadcasters in many countries, in an effort to raise CPMs in their own ad
networks, and in conjunction with ad exchanges that employ programmatic buying.
Newspaper companies in countries including Brazil, Switzerland, Italy, the
United States and Japan have creating ad network consortiums in an effort to
improve revenues.
The Local Media Consortium, a group of 800 daily newspapers and 200
broadcasters in the United States, has partnered with Google in order to
leverage its strength in numbers and quality of audience with the growing
presence of programmatic ad buying. Members will have the choice of using
Google’s two advertising products, the DoubleClick advertising network or
Google AdSense contextual advertising. Together, the 1,000 media outlets serve
almost 9 billion ad impressions per month.
The real draw for the partnership, launched in February 2014, is
participation in the new private advertising exchange that was created to sell
the publishers’ inventory through programmatic buying. “The vision is that this will be not just about remnant inventory, but a
way for the consortium members to monetize their full businesses,” said Laurent
Cordier, managing director of Americas Publisher Sales at Google, according to a Feb. 2014 article published by Neimanlab.org.
Some American media companies are
conspicuously absent from the consortium: The New York Times, the Washington
Post and News Corp. Each of these companies launched its own ad exchange in
2013 to leverage the programmatic advertising buying trend.
While programmatic buying is certainly an
opportunity to make more digital revenue, traditional publishers and
broadcasters still face a familiar conundrum: teaming up with the likes of
Google, which stands to gain the lion’s share of revenue on the backs of
publishers and broadcasters who own the content. However, on the positive side,
many publishers are forming alliances with former competitors in order to build
scale in their countries. These strategic moves are promising and have the
potential to result in a healthier bottom line for media companies struggling
to monetize their digital businesses. Time and effort will drive the success or
failure of these ventures.
World
Newsmedia Network has published Global Digital Media Trendbook each year since
2006. The 2014 trendbook contains 500 data sets and 230 pages of analysis about
digital media usage and revenue patterns, including this data set. To download
the GDMT free executive summary, go to www.wnmn.org
