While the terms of the deal are new, many Local Media Consortium members have a relationship with Yahoo that began seven years ago with a partnership called the Yahoo Newspaper Consortium. That arrangement disbanded when that deal expired last October and the Local Media Consortium formed in its place, allowing members to work with multiple tech providers and expand beyond newspapers to all local media.
Google was one of the tech partners with whom members began working. In February, Google began powering a private exchange with members’ inventory. While the exchange is currently operating, many members are still onboarding the exchange and the Google platform.
Coats said consortium members will get better contractual terms from advertisers, providing efficiency. There’s also hope they can drive higher CPMs through their alliance. “If you start those CPMs at $2 and get to $3.25, and get that to 4 billion impressions (out of 14 billion) that is a huge amount of money, all because we’re better monetizing.”
The deals with Yahoo and Google are only the start, he said.
“For me this is the first of several steps with Yahoo,” Coats said. “They have many overlapping interests and capabilities with local media. It’s the same with Google. We’re taking the long view. Our members are signed up [with the Local Media Consortium] for five years, and our agreements with tech companies are three to five years within that.”
Smaller technology companies are also interested in striking a single deal with the Local Media Consortium, Coats said: “Startups who have taken two years of angel funding to get to seven media companies like the idea that we can bring 55 media companies to the table, instead of spending years to get those customers.”