A number of major publishers and agencies in Europe expect more ad inventory to be sold via direct deals this year as they seek to reduce their exposure to open exchanges.

The Guardian, for example, which currently relies on open exchange buying for about 80% of its display inventory, intends to rely more on programmatic direct deals in 2019.

The New York Times has already stopped open exchange buying in Europe, while News UK, the publisher of The Times and The Sun, has reported that private auction and programmatic guaranteed deals have increased for both newspaper brands.

And it is not just top publishers that are keen to reduce their dependence on ads bought via open exchanges, because at least two major agency holding groups in Europe want to build more direct to publisher transactions, Digiday reported.

They include GroupM, which wants to simplify digital ad supply chains and increase its control over any transaction, while also avoiding open auctions where it can’t leverage its scale to negotiate a better deal.

“We are structuring deals with the newspapers so that we can have the inventory we want from them, but which we would ordinarily have taken from the open exchange,” said Robin O’Neill, MD of digital trading at GroupM.

“Anything that has us bidding on a like-for-like basis with everyone else in the market goes against our whole thing of scale being used to our advantage, which we don’t want,” he added.

“It doesn’t make sense for us to be competing [in online ad auctions]; therefore, we will look to remove ourselves from auctions and agree to pricing with publishers upfront.”

It is a view shared by Tim Pearce, head of digital investment at Amplifi, the media investment division of the Dentsu Aegis Network, who said there is increasing demand for publisher-direct integrations because advertisers want to maximise spend on media.

“All of the research we have undertaken suggest a positive impact on brand metrics when advertising alongside professionally produced content, which is again leading to an increase in demand for PMPs [private marketplaces],” he said.

Sourced from Digiday; additional content by WARC staff