The Financial Times’ digital ads strategy following the introduction of the General Data Protection Regulation appears to have been a formula for success, bringing about a healthy spike in programmatic ad revenue.
Its approach to GDPR was a strict one as far as digital ads go. The risk of data leakage was lessened by removing inventory from the open exchange, and instead selling through private deals, specifically programmatic-guaranteed ones, Digiday reports. It also limited its ad tech partners to 20 where previously there had been no limit.
The result has been a turnaround in the make-up of programmatic revenue – in 2017 programmatic-guaranteed and automated-guaranteed deals made up only 4% of programmatic revenue; by the following year that figure was 40%, and now it’s 70%, says the FT. Programmatic ad revenue has also grown 9% in the last year.
The strategy shift was not as radical as it would have been for many publishers because the FT was not reliant on open-exchange revenue. Even so, Jessica Barrett, global head of programmatic for the FT, describes the change as “drastic”.
Barrett said over the last year the greatest interest from buyers was in programmatic-guaranteed deals, with private marketplace (PMP) deals tapering off – PMPs previously accounted for 70% of programmatic ad revenue. That situation has now reversed, says Barrett, with programmatic-guaranteed deals making up 70% of revenue, and PMPs around 30%.
The FT’s revenue model is heavily based on subscriptions, and programmatic ad revenue makes up only around 5% of total ad revenue, the publisher says. Nevertheless, it’s a revenue stream the publisher intends to grow.
Demand for guaranteed deals, which allow advertisers to automatically match their data with a publisher’s relevant audience data, but at a pre-agreed fixed price, has been boosted by GDPR.
“Post-GDPR, a lot of buyers are asking, for legal reasons, how you collect and segment your data,” Barrett told Digiday.
“Lots of publishers will say they have first-party data available, but no one was quite clear on who those people were. Whereas we’re able to show that, for instance, a CEO has declared themselves specifically as such on our site [thanks to subscriptions data].”
The FT says it aims to raise programmatic ad revenue – from private marketplace, programmatic and automated guaranteed deals – to around 20% of digital ad revenue over the next two years. Cutting operational costs is a key focus and the publisher aims to automate all ad deals below £5,000.
Sourced from Digiday; additional content by WARC staff