LORI TAVOULARIS: We've upgraded from the days of fax machines, at least. But there's still a lot that's inefficient on all sides of digital, both on the exchange side and direct sales. Obviously, the exchange side is where most of the efficiency advances are taking place, thanks to private marketplaces and Deal ID.
Systems can interact without a lot of back and forth emails and conversation about what goes where and for how much. But it's still a lag when it comes to connecting our creative teams and the agencies' creative. Trafficking is another headache.
Simply put, there's just a lack of consistent systems that all sides can plug into. Rarely do two publishers have the exact same workflow system in place. There are similar ad servers, but that often doesn't go far enough when you get to the detailed offerings that publishers have. Some publishers have integrated digital and offline sales, some haven't, for example.
A number of ad technology vendors have been aiming to solve workflow problems for ad sales, such as Mediaocean and Centro. Do you see anything compelling in what they offer?
Right now, we work with Centro more as a digital agency than as a provider of workflow systems. They connect us with advertisers and their workflow systems do help, but only insofar as the marketers they deal with. We've also had conversations with Mediaocean. It's an interesting conversation and we'll work with multiple ad tech vendors, particularly if it involves simplifying the connections on the agency side. We spend a lot of time at conferences discussing how the digital ad dollar gets sliced between the marketer and the publisher, but we still haven't found that single, overarching solution.
Private marketplaces, like the one you have powered by The Rubicon Project, is also supposed to simplify things. Does it?
To start, I don't like the term private marketplaces. It doesn't provide a clear, full description of the relationship between sellers and buyers. For one thing, it's not "private" because we can segment it out to a million different buyers. Secondly, it's not a marketplace – it's a connection between a seller and a distinct buying entity. A marketplace connotes something open and accessible, where anyone can buy and sell.
That said, we've gotten a lot of success from the private marketplace we have with The Rubicon Project and their REVV Connect product. It's no longer buyers who want transparent access to our inventory at a really low rate. Some of the buy side entities and demand side platforms have found a way to make private marketplaces work as well. Ultimately, it is helpful to the publishers.
How do you use the private marketplace and REVV?
REVV connect is a vehicle for connecting with the private exchange. There are two ways it works. For example, we'll talk with trading desks such as Omnicom's Accuen or Publicis' VivaKi, and we'll put out the word, "If there's something in your budget that might fit with one of our sites, let us know." And from there, we can give them first right of refusal for a particular kind of placement, or private access to selected inventory or we can just do a direct deal.
Another way, we put packages of inventory up on the exchange in the REVV Connect marketplace. Buyers can just come in and select available inventory there. We get pinged, telling us a buyer in interested. We can then go back and negotiate for a better rate or set something else up. I would like to see more buy side entities put their plans together based on what's available in these kinds of marketplaces. As they're planning, contact us about inventory we don't yet have available, but once they're interested, we can craft a deal that makes use of both the direct, traditional method of selling ads, and the automated, programmatic method.
Rubicon also offers consultative direction: they can look across private marketplaces and identify the biggest spenders in a given month and suggest we connect with them. So there's a sales lead aspect as well to all these automated services.
Are there any other benefits of these private exchange tools?
The point of all this is that digital ad sales are substantial, but the revenue is not large enough to warrant the time and constant dedication of a large team. At least not in the way a direct sale does. The entire digital ad operations team includes about 75 people. In order for us to do anything close to what we can do with the private exchange, we'd need three times the amount of people we currently have.
Deal ID is another layer that publishers can use within their private exchanges. Has that become a more important tool for Tribune as well?
When we're setting up the inventory with Rubicon, that deal gets associated with all the parameters around price and placement we previously assigned to it when showing it to buyers and DSPs. That allows the buy side to identify that segment of inventory that they have worked out with us. It's certainly made it easier for the buy side to keep tabs on inventory that they've deemed important for a campaign.
It helps publishers by making the deals on exchanges happen more quickly and more often. Previously, we would set up a preferred deal. But often, we'd put that preferred deal out there and too often, we'd see that buyer choose a similar piece of inventory on the open exchange for a much lower price. So Deal ID gives buyers more transparency, and in that sense, makes it more attractive to them. And for us, we get to sell more of our inventory.
Does this represent more of a mix of direct and programmatic ad sales?
Not yet. I hope we get to a place where we can get more automation into our direct sales process. But if programmatic reserve means getting our premium inventory for a lower price, that's not going to happen. As long as rates stay healthy, though, we don't care how a deal gets done, whether it's direct or programmatic or some combination of the two.