McClatchy’s Darwinian Approach To Programmatic

Tobias Bennett McClatchyThe McClatchy Company’s programmatic strategy didn’t look good when it played second to direct sales. CPMs were low and block lists barred big advertisers.

With the support of McClatchy leadership, Tobias Bennett, the digital display revenue manager, removed block lists and implemented Google’s dynamic allocation tool, designed to let all impressions compete with each other.

“Rate wins regardless of channel for all cases,” Bennett said of the equal opportunity approach to sales.

It represented a big shift from the previous mindset, where “the opinion was that the only reason they weren’t buying with us directly was because they could get it cheaper somewhere else, and if you block them, they’ll come back and pay rate cards.”

The results of the change, implemented in the second quarter of last year, were immediate. “We saw our CPMs go up and our programmatic revenue go up – it was jumping double digits,” Bennett said. Less than a year in, CPMs have grown more than 50% and continue to trend upward.

Since the national direct sales team wasn’t making headway on the accounts it had blocked, sales didn’t lose out.

And after removing the block lists, “the newsroom was happy to see the low-quality ads go away and the high-impact brands return,” Bennett said. “There was an internal perception that the lower-quality ads gave the impression that the journalism wasn’t as quality.”

Google’s dynamic allocation product changes how ad servers decision, allowing a high programmatic bid to win over a direct-sold impression. But the vast majority of the time, direct deals still beat programmatic.

Bennett said he sees exceptions, typically seasonally like in the fourth quarter. When programmatic bids rise due to increased competition, the price spikes can usurp a direct buyer’s impression.

Making programmatic an equal player to direct changed how salespeople perceived the value of McClatchy’s inventory.

“It seemed to sales teams that we had this inexhaustible supply of inventory, and value was arbitrarily determined,” Bennett said. “Now we have a number to point to: There’s a marketplace where it’s valued at X number, and to get guaranteed placement, they have to pay a bit more.”

The national sales team offers programmatic options to buyers as well as direct deals.

“We’ve empowered everyone to talk about programmatic, our reach and scale, and acknowledge that we have these auctions,” Bennett said.

Getting the message out that McClatchy was open for programmatic business took time, but the team has seen results. “We opened up a dialogue with agencies about what we needed to do in their eyes to have success in the future down a programmatic path,” Bennett said.

“We haven’t come close to recapturing the budgets we used to with advertisers and agencies, but we’ve changed the tide. Instead of the crickets, they’re picking up the phones and calling us” when they have incremental spend, Bennett said.

While the impact of programmatic has been most noticeable in national sales, McClatchy is starting to see local buyers catch on to the idea. “Some of the more savvy regional buyers and companies are moving that way,” Bennett said.

McClatchy is also optimistic about programmatic supply available through the Local Media Consortium, a publisher coalition of news media. “It’s early days, but it’s become a considerable part of our repertoire,” says of the impact the exchange has on McClatchy’s digital business.

McClatchy is also optimistic about partners like the Local Media Consortium, a publisher coalition of news media. “It’s early days, but it’s become a considerable part of our repertoire,” Bennett said of the impact its programmatic exchange has on McClatchy’s digital business.

To continue its embrace of programmatic, McClatchy is exploring its options for programmatic direct – though it hasn’t made a decision yet in terms of technology.

As a publisher, it hasn’t seen a deluge of buyers requesting viewability yet, given it skews toward regional buyers, but it knows that is ahead. And it hopes the messy viewability landscape, where multiple vendors make reconciliation a challenge, cleans up in the interim.

Ultimately, it knows such shifts to quality will benefit McClatchy and help differentiate it from the profusion of “garbage inventory out there,” Bennett said. “Our belief that there is a lot of value in our inventory and in our audiences.”

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