Until a few years ago, Bauer Media sat on the digital advertising sidelines.
Since Bauer Media earned most of its revenue from newsstand sales of well-known brands, such as InTouch Weekly, J-14 and Life & Style, it didn’t want to give content away for free online.
“The strategy until a few years ago was to do nothing,” said Bauer Xcel Media President Christian Baesler, who joined in 2012 with the task of growing its long-neglected digital division.
Back in 2012, websites for its 15 magazines attracted just 400,000 unique visitors a month. With a small audience to monetize, Bauer Media decided to use third-party relationships to increase advertising, including ad networks and programmatic. It tested everyone, including partners like OpenX, Undertone, Google AdX and Rubicon, eventually amassing nearly 50 demand sources.
The programmatic route enabled Bauer to steadily increase revenue in lockstep with its audience growth.
“All the traffic growth we’ve been seeing we have been able to monetize,” Baesler said. “If you double traffic tomorrow with a direct ad sales approach, it’s unlikely for your revenue to double.”
But that is possible with programmatic. From 2014 to 2015, monthly uniques soared from 10 million to 25 million, based on completely organic traffic growth. Bauer invested the revenue generated from its growing audience, increasing its staff from 15 to 50 during the same time period.
But as its audience grew, Bauer Media realized that its 50 partners created a huge reporting burden while not improving yield. Bauer employed just a single ad ops person who didn’t have enough time to devote to tasks like optimizing priority levels in the ad server regularly.
So in August 2014, it tapped Operative as a technology and consulting partner. Bauer wanted help optimizing yield, paring down partners and improving reporting.
Operative whittled down Bauer’s demand partners to fewer than 10, picking the ones with the highest performance using “real CPM,” which multiplies CPM by fill rate.
It standardized floor prices on different exchanges. Buyers could previously shop around to find the lowest price. Now, floor prices on all exchanges are identical.
Operative moved Bauer from small-business DFP [DoubleClick for Publishers] to DFP Premium. That enabled it to create a more granular product catalog. For example, Bauer could separate and package specific inventory for advertisers, such as J-14 content about Justin Bieber or Selena Gomez.
“With more granular and descriptive offerings, we see a lift across the open exchange,” noted Kiernan Collins, Operative’s services architect.
Those changes helped boost average CPMs by 89% from Q1 2014 to Q1 2015.
Bauer maintains that lift by using Operative’s technology to make daily adjustments to ensure the highest performing exchanges serve the most impressions. On a weekly basis, Bauer adjusts floor prices.
Outside of the ad server, Baesler is optimistic about the ability for header bidding to increase demand, calling it a “publisher-centric” technology that’s “better for the industry and [which] creates more efficiency.” Bauer’s sites work with Amazon A9, Sonobi and Yieldbot, but so far bidding rates are low with these header partners, which are picky about impressions.
With its programmatic pipes optimized, Bauer is looking ahead to other direct response-focused ways it can earn money digitally.
“Our long-term strategy at Bauer is to move beyond standard display advertising to transactional models,” Baesler said. The strategy fit Bauer’s direct marketing approach to the business.
He is eyeing the content-commerce models of PopSugar and Thrillist. The corporate buy-in for a content-commerce strategy, as well as the resources to execute them, already exist. Bauer Media, an international brand, owns a flight comparison tool in Germany and the largest classifieds site in Australia.
To determine which shopping opportunities best fit its readers, Bauer is creating a proprietary data-management platform to capture user data. The data will help Bauer create personalized product recommendations, from which it will take a cut of resulting sales. Look for a rollout in the next year.
“In order to build up a big business,” Baesler said, “we feel like we have to be in the transactional space.”
