Federated Media Prepping Private Exchanges For The Fall

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In addition to running several vertical blog networks around subjects from tech to food to health, Federated Media has built up its tech side in the past year. The first anniversary of its acquisition of ad net operator and supply side platform Lijit is approaching and FM is preparing to start offering private exchanges to publishers this fall.

We spoke with CEO Deanna Brown, who also announced two new hires designed to bring in more car advertisers and enthusiasts. New auto category lead Liz Boone was previously General Motors' global director, digital and social engagements; and new Executive Editor Jennifer Krauss is the former editor of Lexus Magazine.

AdExchanger: It’s almost a year since Federated Media acquired Lijit, which added the ability to manage real-time bidding in addition to FM’s “conversational marketing” offerings through its vertical blog networks. How have the two sides been integrated?

Deanna Brown: What we liked about Lijit from the very beginning is they were publisher-centric as we have always been. They fit very nicely in the longtail as well as premium publisher mix. Depending on what source you read, there could be as much as 25 percent or as much as 35 percent of brand display dollars going to programmatic buying. When we as premium publishers spend our time talking to brand display media planners, we have that full suite to offer them.

What does “premium programmatic buying” mean?

What premium programmatic means for me is, it’s the marriage of the efficiencies and the effectiveness of programmatic exchange buying and selling with the art of launching a product or making a brand more relevant to a consumer. Ultimately, for us, it’s about offering the right programs that are conversational in nature. The integration of conversational marketing and Lijit’s programmatic buying is about supporting premium programmatic buying.

Now that you have the RTB side with Lijit, as a publisher network, are you planning on developing private exchanges?

We are working on a number of products, including private marketplaces that we will be rolling out throughout the fall.

How does a private exchange fit into FM’s offerings and strategy?

I believe a private marketplace or private exchange are valuable as part of the suite of products, not as a standalone offering. The reason it makes sense for Federated Media is marketers want to take advantage of the technology side of our platform as well as the high-end conversational media piece. Brands are constantly looking for solutions around paid, owned, and earned media. A private exchange allows us to continue to build those relationships with major brands. A the same time, we want to continue to be working with premium publishers.

How big a business do you expect private exchanges and RTB to be for FM?

I’m hesitant to share percentage of revenue, etc., with you but I would suffice to say that it is the fastest growing part of our business. There is a big opportunity financially there for us, but that’s all I can say.

It sounds like you like the way the Lijit acquisition has worked out. Any other acquisitions planned on the tech side?

We are very happy with the acquisitions we have made thus far. FM has a lot of the right pieces in front of us and we are also constantly partnering and even building our own tools along the way. So we’re in a very good spot in terms of having a full service offering for brands as well as with publishers. That said, we’re not looking for anything in particular to fill any gaps. But as much as stuff is presented to us, we will take advantage of it.

Let’s talk about how others are pursuing “conversational marketing.” What do you think of Facebook’s and Twitter’s efforts to become marketing vehicles? And do you see any way you can partner or use Facebook Exchange or others tools from those entities to promote FM’s advertising programs?

Facebook and even Twitter are what I’ll call the social platforms, we see those as great ways to share the fantastic content from the publishers we represent. We have been quick to advise brands and publishers to be cautious of only relying primarily on those platforms. They offer limited opportunities in terms of really understanding your consumer, particularly the data piece. And publishers have little-to-no monetization opportunities. That said, Facebook and Twitter have indirectly supported the general notion of conversational marketing. In other words, they validate the idea that content in context in a native environment makes advertising more powerful, whether it is sponsored stories or promoted tweets.

But how do you measure success in those formats? Is it all about engagement metrics?

One of the criteria that we select our for partners is how socially engaged are users. We do that by looking at how often content is tweeted or shared. It’s that social energy that we really look for in publishers in order to engage them as part of our portfolio. One of things we talk to our advertising partners about is figuring out the value of the media that we offer in terms of engagement and in terms of amplification. Although we are not pricing that way, that is part of the value equation and why people pay premium prices for our programs.

What do you make of Facebook Exchange? Is that something you can work with?

We have had initial conversations with them and that is probably all I can say.

Follow Deanna Brown (@deannabrown) and AdExchanger (@adexchanger) on Twitter.

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