Digital advertising is moving into a âdifferent chapterâ where transparency is key and publishers will play âa much more active role in deciding what changes will come through in the futureâ.
These comments from Ozone Project chief executive Damon Reeve come as the digital ad platform for national news publishers is expanding its offering to buyers, moving away from open market programmatic trading.
The move follows Googleâs decision to stop supporting third-party cookies on Chrome by 2022, following Firefox and Safari. The digital marketing industry has been reliant on cookies to track a userâs online behaviour and serve them relevant ads â often products theyâve just been browsing.
The death of cookies means marketers will be less able to track users from site to site and more reliant on particular brands for providing access to audience.
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What is the Ozone Project?
The Ozone Project is a rare joint venture between rival publishers News UK (Sun and Times), Reach (Mirror, Express and Star), Telegraph Media Group and Guardian News and Media, which acts as a single platform selling digital ad space across the publishersâ network of sites.
All the publishers who contribute to a particular audience â e.g. business â are remunerated in proportion to the audience they contribute.
Ozoneâs goal is to give publishers more control over their ad business while offering a premium environment for advertisers âwithout a lot of the negative aspects of programmatic advertisingâ, said Reeve.
He said marketers had relied on metrics around impressions â when a digital ad is shown to a user â and clicks on ads, while the âvalue of the audience theyâre reaching has very much been secondâ.
But, he said there were now more conversations being had âwhere measures of success shouldnât be based on impressions and clicksâ but on âbusiness measures, in line with other media channelsâ.
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How news publishers are competing with Duopoly
In 2019 total UK digital ad spend reached ÂŁ15.7bn, up 15% on the year before, according to figures from the Internet Advertising Bureau and WARC. Of this, ÂŁ6.2bn was from display, up 17% year-on-year.
In the first half of 2020, the IAB found that total UK digital ad spend fell 5% to ÂŁ7bn under the coronavirus pandemic, but remains ârelatively stableâ. The display market has grown slightly, up 0.3% to ÂŁ2.84bn.
Digital advertising is the largest media channel today, with programmatic advertising making up about 90% of the channel, said Reeve.
Google and Facebook (including Instagram) hold nearly 80% of the market share of digital display ad spend in the UK.
Reeve said buying ads through these Big Tech platforms had led to the loss of the relationship and âstrategic engagementâ that publishers â even large ones â can have with brands.
âWhat ultimately ends up happening, if you do nothing, is publishers just see an erosion of revenue,â he said. âWe created Ozone to be a counter to that sort of buying behaviour.â
Brands are âgetting a lot more engagedâ
The issues with programmatic advertising â the automated buying and selling of digital ads â were exposed in a report by marketing trade body ISBA and professional services giant PWC, published in May, which for the first time mapped the programmatic ad delivery system end-to-end from January to March 2020.
Of the 267m ad impressions served from advertisers to publishers, only 31m (12%) were successfully âmatchedâ to their target audience. The report said the remaining 88% âcould not be mapped due to low data qualityâ.
The report found that publishers receive half (51%) of advertiser spend on programmatic advertising on average, and that 15% of advertiser spend could not be attributed. ISBA and PwCâs study called for industry collaboration to investigate this âunknown deltaâ further and push for standardisation across the system âto facilitate data-sharing and drive transparencyâ.
Reeve said the report had spurred a âhuge wave of activityâ in the marketing industry. âBrands are asking a lot more questions, theyâre getting a lot more engaged, they want a lot more control over where their money is spent,â he said.
âI think that weâre now entering a different chapter in digital advertising where transparency is much more the flavour of the day and brands and publishers will have a much more active role in deciding what changes will come through in the future.â
Reeve said that over time he believed quality would grow to be more valued over quantity in the digital ad market â âthatâs the direction of travelâ he said, but added: âNothing turns on a dime.â
As such, one of Ozoneâs selling points is that its portfolio of news websites offers an audience that rivals Google and Facebook in the UK. Comscore web data for September 2020 puts its reach at 45.5m UK adults, compared to Google at 45.2m, Facebook at 44.1m and Amazon at 41.7m.
Reeve said: âWorking together and collaborating to create that scale, to build that front door where itâs easy for buyers to engage in quality environments, thatâs necessary for us to be successful.â
But the revenue it captures is still only 1/40 what the Duopoly turns over.
Ads bought through Ozone run across its network of news websites, so they can appear on the paywalled Telegraph and the free Daily Star, for example. This means the quality and type of content that ads appear next to â and their accessibility to readers â can vary wildly.
âOzone is principally an audience network,â said Reeve.
âIf youâre looking to reach an audience, letâs say itâs a business reader or a business user, the logic would be that you would target them on the Telegraph in the business section, for example.
âBut the truth is, a lot of those readers actually do read the sports section of The Sun⊠and so we have access to that information to be able to say: âWe know that youâre reaching this audience, and thatâs your target audience⊠[but] that audience also does other stuff.â
Ozone has seen four-fold growth during Covid-19 and is expanding its service with the roll-out of Ozone Marketplace, offering programmatic trading through direct connections as an alternative to the open market, as well as greater GDPR compliance.
This is alongside its pre-existing audience offering, covering Ozoneâs entire network of news websites, which is led by its sales team.
Buyers will also be able to buy digital ad campaigns with News UK and TMG through Ozoneâs Advertising Centre of Excellence from January next year. TMG chief executive Nick Hugh said Ozone would âexclusively deliverâ all of its digital display and video advertising.
Putting editorial before ads is âgood for advertisersâ
The Telegraph and Times titles have both pursued subscription strategies, erecting strict paywalls around their online content in an attempt to grow reader revenues and reduce reliance on advertising.
Reeve said this strategy was âkeyâ as consumer attitudes towards advertising continue to decline.
âI think the user experience has degraded for the last few years,â he said. âI think itâs starting to turn around now, but in the chase for short-term revenue, the user experience has been compromised.
âI think that premium publishers have realised that was the wrong path, that that was a mistake.â
He said putting editorial before advertising was actually âgood for advertisersâ, as it meant âless ads on the pageâ and a âbetter user experienceâ. This, he said, is a âmuch better outcome for advertising that in the long-term builds value for bothâ.
He added: âIf your measure of success is around brand engagement, brand recall, consideration, rather than impressions and clicks, then, a better user experience and a better environment will drive those measures much more successfully.
âOzone are here to support a reader-first strategy, not to compete with it.â
Reeve said his view was that premium publishers had been âunder-representedâ in the world of programmatic advertising, which he said supports the âlong tail webâ over the likes of the Times.
Premium publishers can offer a quality environment to brands, said Reeve, adding that readers are much more engaged and attentive in quality environments, something he said was backed up by research.
âIf you want to build a brand then quality environments are where you build brand. So I think that as long as thatâs the marketersâ objective, which it always will be, then those environments are required,â said Reeve.
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