Category: Data-Labor-Technology Stories

Publishers will enter 2018 more focused than ever on diversifying their revenue streams away from display advertising. For many digital local news publishers, which have been hit the hardest as ad dollars moved to Google and Facebook, that shift is already underway as they eschew display advertising to focus on branded content and consumer revenue.

The Charlotte Agenda does not sell display ads on its site. Instead, it lets advertisers sponsor sections of its site. WhereBy.Us, a Knight Foundation-funded startup that runs The New Tropic in Miami and The Evergrey in Seattle, gets most of its revenue from branded content and $60-per-year memberships. California Sun, a newsletter startup created in November by former New York Times and Washington Post reporter Mike McPhate, plans to make money by selling subscriptions.

Display ads are hardly a growth area in digital media, with most of the digital ad pie going to Google and Facebook. But the market is even tougher for local media, as evidenced by the closure of Gothamist and DNAinfo and Spirited Media’s pivot to memberships, that some are just ignoring it.

“We don’t sell that stuff because other people are better at it,” Charlotte Agenda founder Ted Williams said. “You need to have really integrated advertising that makes sense. We continue to attract really good clients that need good brand advertising.”

Most local ad spending in the United States is going to traditional ad formats like direct mail and local TV advertising, according to BIA/Kelsey data. But advertiser demand for contextual relevance offered by a publisher websites has dried up as ad dollars have gone programmatic.

“Two years ago, we were doing almost exclusively direct site buys,” said Jason Tabling, svp of digital at BrandMuscle, a local agency that helps national brands including Allstate and T-Mobile allocate their local brand budgets. “Today, it’s all programmatic. We’re looking for behavior, not sites.”

Even small businesses that used to be local media’s bread and butter are losing interest in direct buys with publishers. When BKLYNer, an award-winning digital publisher that covers several neighborhoods in Brooklyn, saw many of its advertisers shift their budgets toward the duopoly, it was forced to launch an emergency membership campaign in December to avoid going out of business. “It’s not that we couldn’t get ads,” BKLYNer founder Liena Zagare said. “It’s that we need a more predictable stream of revenue to make payroll.”

Some local news publishers have plugged into ad networks like Nucleus, a joint venture from Gannett, Tribune, McClatchy and Hearst, or platforms like the one that local publisher Patch offers, which offers local publishers the chance to be part of a scale play that demands advertisers commit to certain spending minimums.

Increasingly, local publishers are selling non-display ad formats, though. At Whereby.Us, that includes paid placement in local events calendars, native ads in newsletters and co-branded events along with custom content that runs on multiple platforms.

Rather than trying to compete with national publishers with large branded content studios, Whereby polls its audiences and segments them based on their interests and behaviors, then tries to sell advertising based on those interests. It worked with the Miami-Dade County Department of Transportation on a multimedia series about public transit in Miami in 2016, for example, on a campaign that remains ongoing.

“The advertising model is disconnected from the value proposition of media, especially when it’s local,” said Whereby co-founder Chris Adamo. “The key is not, ‘How many people do you have?’ It’s, ‘What are they doing, how do they spend their time?’, and solving for that.”

Consumer revenue is another area of focus for local publishers. Consumer revenue represents 10 percent of Whereby’s revenue, and Adamo said he expects that to triple in the next couple years as Whereby identifies more services and programs to offer to members.

The Charlotte Agenda has just under 900 members paying $60 per year for coupons and other perks, including the chance to contribute to a monthly op-ed that Agenda staffers write after talking to them about a key local issue.

Not everyone sees reader revenue as a viable option for local publishers. “Some folks in the market are centrally focused on subscriptions, but I tend to believe that’s a really hard thing to do,” said Jed Williams, chief innovation officer at the Local Media Association. “You have to have really exclusive, really valuable content, and an incredibly tight relationship with your audience.”

The post Local digital news publishers are ignoring display revenue appeared first on Digiday.

With publishers realizing that they can no longer be wholly dependent on ads for their revenue, Purch is getting more serious about selling proprietary technology to other publishers.

Purch — a commerce-focused publisher that owns tech and product review sites such as Tom’s Guide, Top Ten Reviews and Live Science — is profitable. It makes about $120 million a year in revenue, with about 20 percent coming from ad tech products that it licenses to 25 publisher clients, said Purch CRO Mike Kisseberth. Over the next year, the company plans to grow its number of publisher clients to roughly 40, and have its tech licensing operation account for about 25 percent of its overall revenue, he said.

Purch began developing its own ad platform nearly four years ago. What’s changed is that the company has gotten more serious about licensing it to other publishers. In December, Purch broke out its tech licensing business into a separate unit, called Purch Publisher Services. About 60 of Purch’s 400 employees work on Purch’s tech platform at least part of the time, and 10 work on it full-time, Kisseberth said. These employees are made up of salespeople, engineers, data scientists and support specialists.

By licensing software, Purch is aiming to build a revenue stream in an area that most publishers have avoided. This is because most publishers don’t have the resources or patience to build their own ad tech, let alone build tech that can be licensed to other media companies.

One exception is The Washington Post, which calls itself a tech company and sells ad products to other publishers. But the Post is an outlier due to the fact that its owner, Amazon CEO Jeff Bezos, is a tech enthusiast who happens to be the richest person in the world.

What has driven the growth of Purch’s tech licensing business is that it was an early adopter of server-side bidding. Unlike on-page header bidding — where publishers simultaneously offer inventory to multiple exchanges before making calls to their ad servers — going server-to-server speeds up page-load times since the ad calls are hosted on publishers’ servers and not on users’ browsers. For over a year, Purch has sold all of its programmatic inventory through server-to-server connections.

The benefits of server-to-server might sound enticing, but as publisher tech teams are typically stretched thin, few publishers have shifted over to selling the bulk of their programmatic inventory this way. This is where Purch pitches itself as a vendor.

Purch’s server-side solution operates on a revenue share, but Kisseberth wouldn’t disclose monetary terms. It is a managed-service product where Purch takes control of the setup and maintenance, ad ops and relationships with the 30 supply-side platforms that are plugged into the product.

Purch last summer tested a self-service bidding product with some of its clients but found that it required more tech and service support than was worth it. As self-service gains steam within the ad tech industry, Purch is open to shifting its products to be self-service in the future, but that likely won’t happen in 2018, Kisseberth said.

Other tech products that Purch sells publishers include commerce management and CRM platforms. But these products are more geared toward B2B publishers. Purch’s programmatic bidding product is the main driver of its licensing business.

Purch doesn’t limit itself to selling its tech to non-competitors; its publisher clients include tech sites like VentureBeat, Mobile Nations and How-To-Geek. Purch figures that selling products to other tech sites, as long as they’re brand-safe, can bolster the reputation of Purch’s ad tech with buyers and in turn help Purch’s case when it comes to setting up private marketplace deals, where the ad rates tend to be much higher than on the open exchange.

Kisseberth emphasized that Purch isn’t looking to simply grow an audience extension. If a publisher already builds its own ad tech or runs its auctions server-to-server, then it’s likely not a fit as a client. Unlike the Washington Post, which licenses self-service products to a wide swath of publishers, Purch is focusing on selling its products to niche sites that want another publisher to control and scale their programmatic selling.

“This is not a huge land grab where we are signing thousands of publishers,” he said. “It is signing publishers who we think are good additions to our portfolio.”

The post Purch is a publisher with a $24 million business in licensing ad tech appeared first on Digiday.

Early last summer, Jack Ma, chairman of Alibaba Group, flew to Detroit to deliver a keynote in his company’s first-ever conference in the U.S. His pitch to over 3,000 conference attendees: E-commerce is booming in China, and Alibaba can help small-to-medium businesses oversea tap into that opportunity.

Ma, who has cast himself in his own kung fu movie, is not yet a household name in the U.S. like Silicon Valley tech titans. But Alibaba’s eye-popping growth — it rang up $25 billion in sales over Singles Day in November — makes Ma as the one force, outside of government intervention, that could smash the chokehold of Amazon. When pitching international brands, Ma and his team position Alibaba as a helper that bridges the gap between western sellers and Asian consumers, as the name of its conference indicates. They emphasize that different from Amazon, Alibaba doesn’t tightly hold consumer data, create its own private labels, or keep any inventory. As more and more brands in the U.S. are bristling at Amazon’s dominance, Alibaba could become a silver lining.

The post How Alibaba is positioning itself to crack Amazon’s dominance appeared first on Digiday.

Founders Fund, the venture-capital firm co-founded by Peter Thiel, has bought large sums of bitcoin that are now worth hundreds of millions of dollars.

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L’Oreal will expand a media ownership strategy it piloted in Mexico to other Spanish-speaking countries to generate first-party cookies from its customer base. The idea is similar to sponsored content, but instead of working with a brand-name media company on a story package, for the past year L’Oreal has developed fiufiu, a kind of pop-up… Continue reading »

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For those whose New Year’s wish was never to see the word “duopoly” again: Take cheer! Soon we may start talking about the “triopoly” instead. Amazon’s $1 billion to $2 billion per year in ad revenue in 2017, according to eMarketer estimates, may be a pittance to the tens of billions earned by Google or… Continue reading »

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LendingTree has named data-driven creative and media agency R2C Group as its new media agency partner, following a review. R2C Group will be tasked with handling media buying and planning for the Charlotte, N.C.-based company, as well as TV and radio analytics. The agency transition will take place this month, as R2C Group takes over…

Substantial shares of Americans of nearly all religious groups – as well as those who have no religious affiliation – say they meditate at least once a week.