Private Exchange Deal With Google Just A First Step For ‘Reconstituted’ Local Media Consortium

local-media-consortiumA deal between Google and a collective of 42 local media holding companies could enable private exchange deals spanning some 800 newspapers and 200 broadcasters. The agreement is the first in a series of projects that the so-called Local Media Consortium (LMC) – formerly known as the Yahoo Newspaper Consortium — will bid out to vendors.

These sourcing initiatives will support infrastructure, content and revenue- and audience-producing opportunities for LMC members like A.H. Belo, Morris Communications and The McClatchy Co. “We’ll negotiate deals with multiple partners in all sorts of categories,” said Chris Hendricks, VP for interactive media at McClatchy and chair of the LMC executive committee.

Google will offer LMC members ad-serving (DoubleClick for Publishers), ad network (AdSense) and exchange-trading capabilities to partners – presumably at favorable terms because other platforms were involved in the RFP process. Read the blog post. The set-up process will take about 90 days.

Other terms were not disclosed, but Hendricks said, “From a demand-side perspective, there’s no exclusivity. Anyone can purchase this.”

He added, “Right now, most ad exchanges operate in a non-guaranteed fashion. Being able to partition a marked section of this and say it’s premium, that’s a good move. And as the exchanges open up to guaranteed buying, that positions us even better.”

Almost as interesting as the prospect of a national private exchange for local news media is the fact that Google – and not Yahoo – is providing the infrastructure.

In 2006, Yahoo brought together hundreds of local news outlets into the Yahoo Newspaper Consortium to work together on digital ad sales. The early promise faded as Yahoo’s platform ambitions proved larger than its ability to execute, but the vision was not forgotten.

Last fall, the band got back together, but with a vendor-neutral stance and no involvement from Yahoo. The redubbed Local Media Consortium boasts 250 million monthly uniques and 10 billion ad impressions per month. Hendricks calls it a “reconstituted” version of the Yahoo-run consortium.

“We reformatted it to make it its own entity that could negotiate deals around multiple partners,” he said.

The group represents a lot of audience, but it remains to be seen how effectively LMC members can collaborate. For instance, will they be able to sell each other’s inventory through the Google private-exchange arrangement? Morris Communications, with its sales teams based in the South, would seem well equipped to represent the southern visitors to websites owned by A.H. Belo – which are based in Texas, California and Rhode Island.

Back in the day, such symbiotic selling was held up as a key benefit of the Yahoo Consortium, but the partners struggled to overcome their competitive instincts. With several more years of digital disruption under their belts, now may be the time to work together to serve ad buyers’ need for high-quality content.

“After five years of working together there’s a much more collegial atmosphere,” said Hendricks. “We’re working more closely together.”

The LMC renewed regular meetings a year ago, and its board now meets once a month by phone. The group is now open to new members, including digital-only publishers or other non-traditional media companies. It has a process in place by which it votes on new memberships.

“The consortium is constructed to be inclusive,” he said. “As long as someone is a local media company that creates and owns first rights to its content, we’re open.”

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