The rise of the large tech platforms – mostly Google and Facebook – has transformed the sell-side landscape to the point where smaller publishers have been forced into often uneasy alliances with their competitors. By pooling their inventory, publishers hope the joint efforts will make their offering more efficient to buy and more attractive scale-hungry advertisers (e.g. if Advertiser X wants to find User Y, they have more chance of finding that user across a dozen publishers than they do on one).
The trend started in 2012 in France with Paris-based La Place Media, whose shareholders are TF1, Le Figaro, France Télévisions, Lagardère and Team Media, and since then we’ve seen the model attempted in various other markets. Whilst the French have been more successful than most with their cooperatives, in other markets many have struggled to get off the ground, or have collapsed completely as the participating members have failed to agree on terms.
Over the last year or so, we have also seen broadcasters joining forces to overcome shared challenges, mainly with a view to boosting efficiency and extending their pan-European reach. In Europe, the European Broadcaster Exchange (EBX) was founded by ProSiebenSat.1, TF1 and Mediaset, and Channel 4 also signed up too. Then Liberty Global – Europe’s largest pay TV operator – signed up to Sky’s AdSmart, and in the US OpenAP – a joint initiative by Turner, Fox, Viacom – was also launched.
But why is it that some cooperatives work and some don’t? VAN spoke to some of those who have worked with some of the leading alliances to find out.
Friends on the Other Side
To smooth the path for discussions to begin, it helps for potential partners to already have pre-existing friendly relationships at the top level. After all, regardless of how much is at stake, cooperation still requires people to come together and negotiate, and this is made easier if the person on the other side of the table is closer to a friend rather than just a competitor.
This is one area where publishers may struggle more than broadcasters. While broadcasters obviously come to blows at times, they often don’t to have the same sort of acrimonious relationships that some publishers have, who have in many cases spent decades at one another’s throats both commercially and editorially.
Erwan Le Page, Director General of French cooperative Audience Square, Le Page said that one of the secrets Audience Square’s success was the human relationships. “Many the people working with us have worked alongside one another at various points in their careers, or they had partnered with competitors on specific projects, on Christmas bundle offers for example.”
Ellie Edwards-Scott, a London-based digital consultant who has advised publisher alliances in UK in the past, says that the highly competitive nature of the UK print market has complicated moves to deepen cooperation. She said that the publishers have been “warring” for so long that it has been difficult to get them to work successfully with one another. Also, this animosity has been fuelled further still by the pressures that have accompanied the decline in print revenue.
However, if these social relationships don’t already exist between media companies, they can be built, albeit with smaller projects with fewer members. In the broadcast world, ProSiebenSat.1, TF1 and Mediaset all worked together to launch multi-channel network Studio71, which built a solid foundational relationship for the European Broadcaster Exchange (EBX) to be built on.
“Working with Mediaset and TF1 on Studio71 put in place structures and processes that built a common sense of trust and goodwill between all partners. As a result, we were able to draw upon these relationships in the creation of EBX,” said Christof Wahl, ProSiebenSat.1’s COO told VAN.
Wahl believes that EBX itself will provide a base for even more cooperation in the future. “We believe it will kick start a deeper, strategic collaboration between the broadcasters to drive forward technological development in online advertising and addressable TV, which has big potential for broadcasters,” he said.
A Clearly Defined Goal
The foundation of an alliance will usually be a shared goal of some sort, but the experts VAN spoke to emphasised the importance of those with power really understanding and believing in this common cause.
“I think it’s really important that at the offset all publishers are aligned with common goals and objectives of why they’re forming the alliance and what they want to get out of it,” said Edwards-Scott.
In Audience Square’s case, the digital teams saw the benefits to teaming up for a joint programmatic offering, since programmatic trading was still new at the time meaning there was lots to be gained from pooling resources and knowledge.
At the birth of Audience Square, Le Page explained that those at the head of the founding publishers were very receptive to any digital proposals, as they were looking to transform their businesses.
At the same time, at lower level positions in the digital teams there were younger individuals who believed in the benefits of a unified programmatic offering and were willing to evangelise and push the idea to their bosses. Many at the lower levels also knew each other in various ways, having worked together on deals or for the same companies previously.
Le Page believes that a similar urgency is pushing European broadcasters to work together, and making them happy to take risks and accept compromises for what they see as the greater good. “The example with the broadcaster in Europe is striking, because I’m not sure they’d have accepted that kind of deal ten years ago,” he said.
Without this belief in the shared objectives, publishers will be more prone to dropping out once they’re called on to compromise or give up anything of value for the sake of the cooperative.
A Blueprint the Works for Everyone
Having a clearly defined, shared objective is a good start, but things can still fall apart if there is no agreement on how to get there. The zeal with which publishers unite to overcome a problem can quickly dissipate when disagreements arise over the nature of the alliance.
Key to this is making sure that the cooperative will be for the benefit of all players involved, which is particularly important in an environment where there might be a lack of trust between members.
Fiona McKinnon, general manager of the UK’s Pangea Alliance, explained how in the early stages the participating publishers were concerned about giving up sensitive information and compromising their own sales, yielding competitive advantage to their competitors. But by ensuring the alliance was sensitive to the needs of each individual publisher, trust between members was built.
“I soon learned that that is about understanding each of the individual publisher businesses, and making sure that as an alliance, we know what success means to The Guardian versus Fast Company versus CNN,” said McKinnon.
Audience Square similarly set itself up for the benefit of all. “The brief was for a programmatic offering which would not damage in any way the businesses of the publishers involved,” said Le Page.
This is one area where broadcasters may have an easier time working together than publishers, as fiercer competition makes it harder for publishers to find solutions that work for everyone.
“The market for broadcasters is not as segmented as the publisher market,” said Wahl. “In Germany for example, we are facing mainly one other major competitor in the field of free TV. However, publishers have to deal with many competitors each with their own specific agenda, which reduces the amount of common initiatives.”
What can help overcome this problem is clearly defined leadership, preferably from an independent body whose only goal is to see the success of the alliance as a whole.
“If you’ve got an alliance of, say, ten publishers of different sizes and with different motivations, if you’ve got committee-style voting it can be difficult to get anything passed,” said Edwards-Scott. “Some of the alliances that have worked better have had independent bodies running them.”
Clearly defined leadership can prevent cooperatives from falling apart due to disputes over questions like which tech vendors to work with, and keeping the leadership independent can help prevent one publisher overpowering the others.
The Pangea Alliance has been led internally, first by The Guardian and now by CNN, but McKinnon explains how her team operates independently within CNN’s structure in, many ways like a third party, meaning CNN doesn’t get preferential treatment.
A Compelling Product
Finally, with so much focus on how publishers can help each other through cooperation, it’s important they don’t forget to create a compelling product for those they’re selling too.
Usually these alliances by nature will involve offering greater scale to brands and advertisers, but as Edwards-Scott says, “scale is important, but it’s also what’s behind that scale.” It will often take more than simply a larger reach to convince advertisers to buy a new united offering.
The Pangea Alliance overlays content and data from its members to create a more complete picture of a user. “We can find someone who reads a lot of travel articles on The Guardian, but consumes a lot of business and finance across our other titles; put those two together and you’ve got a business traveller,” explained McKinnon.
Audience Square meanwhile bundles up its inventory into thematic packages, allowing advertisers to buy categories like entertainment, B2B and sport from a URL that masks which publications are included (to protect the publishers from competing with each other).
Edwards-Scott says publishers could look to creating whole new formats for video or rich media, which offers a whole new product to the market, at a scale which will make it more tempting to buyers.
Sustainable in the Long-Term?
There’s a lot that publishers need to get right to get an alliance off the ground, and even once these initial challenges are overcome, new obstacles will present themselves. McKinnon for example said that her greatest challenge now is getting the ad tech stack to work, and it’s important that alliance members remain patient and cooperative through these challenges.
Those that VAN spoke to though were optimistic that we’ll see more publisher alliances come to fruition in the near future. As the duopoly weighs ever heavier on their minds, they expect publishers will be forced to put aside their differences and take the sorts of steps outlined above to make sure their cooperatives stay together.
“I think publishers are realising they have to be a little bit cleverer,” said Edwards-Scott. “If 84 percent of ad revenue is going to a couple of businesses, you can’t fight that alone.”
Le Page has actually seen some of Audience Square’s publishers take more of their programmatic selling in house, but remains confident that they understand the benefits of mutualising talent and knowledge. He believes that the threat of the duopoly will create more alliances in the near future too, saying he expects to see some announced over 2018.