For the past year, executives at The New York Times Company speaking on its quarterly earnings calls have singled out a particular challenge for the newspaper publisher’s display ad business: programmatic media buying methods.
With this month’s hire of online ad veteran Matt Prohaska as programmatic advertising director, the NYT still regards exchange and automated media selling environments with a clear degree of concern but also considers them manageable and advantageous.
“We haven’t changed our opinion in that we firmly believe programmatic is disruptive,” Todd Haskell, the NYT’s group VP of advertising, told AdExchanger in an interview. “We feel it has created downward pressure on price, and it has created new capabilities for people to buy around inventory on premium sites. So we have issues with it.”
The NYT is not a stranger to programmatic activity. The company has used the Google DoubleClick Ad Exchange for some time. But there’s more work to do in balancing sales channels and buying mechanics.
The ad side of the Idea Lab put the same interface into the service of a Wisk detergent article page ad that revealed how dirty a consumer’s shirts are without the brand.
“This type of creativity and custom work cannot be executed in a programmatic environment. Setting up a direct programmatic role within the NYT lets us sweep premium budgets off the table, before they start going into programmatic channels,” said Haskell.
The NYT began looking for someone to fill a senior programmatic sales role back in February. Prohaska had a long track record dealing with both direct sales and programmatic, starting with his post in 2005 as VP of sales and distribution at Root Markets, an early ad exchange operator focused on lead gen and personal data management. Later, Prohaska spent three years as VP of North American sales and account management at Aol. Along the way, Prohaska was CEO of video ad net Smartclip and SVP of Media & Data Solutions at targeting platform [x+1].
As the NYT’s first programmatic ad director, Prohaska is in charge of all global programmatic and indirect revenue in display, search, text, mobile and video. Now that the NYT’s video offerings are no longer behind the paywall, an early focus will be capturing the long-tail opportunity in that associated inventory.
Speaking with AdExchanger two weeks into the job, Prohaska said the NYT has already struck five individual deals with advertisers interested in having automated access to the publisher’s inventory. While there are no plans to set up a dedicated private exchange for advertisers, Haskell noted that one doesn’t seem necessary at this point, since the block list it maintains on Google AdX contains “thousands” of names who cannot view its available ad placements.
The timing of his hire and the NYT’s greater openness to programmatic is based on the sense that marketers aren’t simply interested in getting the lowest price through exchange-based channels. Marketers speak of other things now. Finding specific audiences and saving time are among the “premium” benefits that programmatic methods can supply, Prohaska said.
“Everyone always talks about the benefits of efficiency when it comes to programmatic,” Prohaska said. “And that immediately triggers the thought of ‘cheap CPMs.’ That’s understandable because, historically, publishers looked at these systems and thought, ‘Well, I’ll just throw my garbage in there.’ And buyers, in turn, responded, ‘Well, I’ll see what I can get for five cents a click.’
To demonstrate what a “direct programmatic” ad sales conversation could look like, Prohaska offered the hypothetical example of a veteran NYT ad seller who handles financial services clients. This person is likely to have strong relationships going back the better part of a decade with the client and its agency. “In addition to the typical discussions, this person could propose a way of eliminating all the transactional pain the client, the agency and their colleagues have, and offer access to six months’ worth of ad inventory with the promise of saving roughly 50% of their time to execute the sale,” Prohaska said. “Why wouldn’t they want to do that?”
The big publisher worry about programmatic is the threat of channel conflict. Why should Wisk, which as of this year does all its advertising online after shifting its TV budget to digital, buy an ad directly instead of going through Google AdX?
Brendan O’Marra, director of digital/promotions of Sun Products Corp., which owns Wisk, applauded the greater use of programmatic by the NYT. While the allocation of direct versus programmatic are largely done in consultation with the brand’s agency, Merkley+Partners, O’Marra said the two sides could work in concert.
“It’s fair to say the industry is headed that way [toward the use of programmatic buying methods],” O’Marra told AdExchanger. “For us, we’re really trying to move beyond efficiencies of real-time trading desks to see where we can leverage smarter, shopper data to target where our advertising happens. We’re moving towards blending all the needs of a campaign – whether it’s reach, education or conversion – and make sure that the lens we’re looking through is influenced by purchase data.”
Echoing O’Marra’s remarks, Haskell spoke about a distinct advantage that the NYT has in offering programmatic ad placements without directly threatening the higher CPMs the publisher typically commands.
“The fact is we, like everyone else, do have some unsold inventory from time to time,” Haskell said. “We’re a premium marketplace with a premium audience and we need to protect that, and advertisers will have different needs at different times. This is programmatic on our terms, and we can offer a deeper, more involved experience with the Idea Lab and ad units like the special one we did with Wisk, or we can have something more basic.”
Prohaska hinted at some specific tools that are being developed to draw clearer lines around guaranteed and indirect sales in the coming weeks. In the meantime, Haskell also pointed to an ongoing website redesign being rolled out, and new ad units that will also extend the uses and appearances of banner ads on its site.
“I’ve been managing the digital ad operations for six years and one of the things I’ve learned is the need to constantly innovate,” Haskell said. “We’ve changed our approaches to networks, exchanges, and every 12 months we need to make a significant change. And it’s only accelerating. You’re seeing the market change every quarter now. So we need to reevaluate everything we do, everyone we partner with, every 90 days.”
