In March four major international news publishers announced that they had joined forces. The driving force behind the coalition is to offer advertisers access to their combined inventories and compete with the internet giants like LinkedIn, Facebook and Google. The Guardian, CNN International, the Financial Times and Thomson Reuters have come together and created the “Pangaea Alliance”.
How will it work?
The Pangaea Alliance will use programmatic to give brands the opportunity to buy and access their combined inventory and audiences programmatically via a central exchange. The alliance is progressive; ultimately they are all competitors of one another. Now they will share data and combine formats to deliver targeted campaigns and results for brands. The commitment to sharing first party data is significant in such an alliance. This should be an attractive prospect for advertisers who will have more insight into premium audiences. The data from each publisher will be inputted into the DMP and advertisers will be able to access audiences across the entire group.
Pangaea is partnering with Rubicon Project for the delivery platform behind the venture. It is likely that more publishers will join the alliance in the coming months.
Historical success of such alliances
This is not the first of such alliances. In France the premium publisher exchange group La Place Media has been operating since 2012. In this alliance 5 of the biggest media players in France came together to create a joint venture in order to enhance programmatic revenues. La Place Media is predicting that 2015 will be their best year yet with 20 million euro revenue on the horizon. La Place Media has new ideas on how it can take this alliance even further. It will add a second level and allow publishers access to the stack it has built so that they can run the programmatic directly, through licensing agreements. They are also hoping to utilise more of the publishers’ first party data. For example one publisher in the group has 10 million monthly users so there is huge opportunity to build large data assets to compete alongside the likes of Facebook. However, QuadrantONE which was a joint venture of newspaper companies including The New York Times Co closed its doors in 2013. At the time sources claimed that this was part due to bickering over the investment the partners would be willing to contribute going forward. Some also claimed that it could suggest that exchanges were creating better yield, and therefore there was no need to manage a separate exchange. Clearly however the team behind Pangaea would not agree with this viewpoint.
These premium alliances, such as Pangaea, as well as offering a chance to compete with the giants, also arise as a response to fears around brand and quality of content in the programmatic sphere. Tim Gentry of the Guardian and one of the leaders of the Pangaea Alliance project said:
“Pangaea’s uniqueness lies in the quality of its partners. We know that trust is the biggest driver of brand advocacy, so we have come together to scale the benefits of advertising within trusted media environments, which are geared towards delivering cutting-edge creative campaigns in technically advanced formats.”
The Pangaea publishers claim that one in four of the 110 million users across the Pangaea network are in top income segments, while one fifth are c-suite or senior management executives. Targeting these users requires both a combination of premium content and premium placing.
With the ad tech market so fragmented Pangaea offers advertisers a single solution for scaling. Beyond that, the high quality partners will resonate well with those brands looking for trust and excellence. The future success of Pangaea will no doubt lie in its ability to offer targeted yet technologically advanced, creative and united campaigns to advertisers which sit well with brand perception.
The sharing of first party data will be extremely valuable and will allow advertisers to profile and target and profile audiences across the entire alliance.
It has long been established that scale is a key component to successful online advertising. Out there on their own these publishers struggle to compete with the 1.4 billion monthly active users of the likes of Facebook. Together, these joint forces will hopefully be able to compete on a more level playing field.