Huge media companies like CBS and ESPN are banding together to fight Google and Facebook — but it may not be enough

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  • Big media companies are working together to sell digital ads to better battle Google and Facebook
  • The TrustX initiative, which includes buy-in from the likes of CBS, News Corp., Conde Nast and Vox Media, is ramping its capabilities while promising marketers a safe harbor for their ads
  • Yet TrustX faces potential challenges, including competing agendas and fickle ad buyers


A host of big media companies have come to a difficult realization — the enemy of the digital duopoly may be my new best friend.

The duopoly, of course, is Facebook and Google, and, to battle its growing dominance in digital advertising, media players ranging from CBS, to ESPN to Hearst and News Corp. are pooling together their ad space. The vision is to create a centralized digital outlet where ad buyers can find the best, safest, places to run their ads outside of the Google and Facebook domain.

Whether the combined power of a slew of old-media players can help win back more ad budgets is an unanswered question at this point. An even thornier question is whether these blood rivals have the will and wherewithal to work together and make sure this plan bears actual fruit. Given the rocky history of similar digital alliances  – it won't be easy.

The initiative is called TrustX. It's a non-profit group established by the trade group Digital Content Next, whose members include NBCUniversal, Viacom, Vox Media and The Washington Post.

The big idea is to create a digital ad marketplace where only A-list publishers sell ads using automated software. 

  • The pitch to marketers is that with all the recent swirl over ads ending up in bad places online (next to fake news, hate videos or in front of bots), they'll be able to run their ads on only top quality sites, and these ads will only be shown to real people.
  • And for participating publishers, the hope is that they'll be able to take more direct control of ad inventory and not have to share as much of their revenue with ad tech middlemen. That's a common complaint in the digital ad world– where ad space can be bought and sold via a daisy chain of numerous digital exchanges.

Announced in September of 2016, TrustX has moved at a careful pace, deliberately, say its leaders. The group rolled out a beta push this past summer with a handful of publishers supplying ad space.

Since August the number of publishers selling ads via the platform has doubled, and the number of actual ads changing hands has accelerated exponentially.

"We've seen more than hockey stick growth," said TrustX CEO David Kohl, who cautioned that it's still very early in the rollout. Kohl expects to have 20 publishers up and running by the end of the year. 

unnamed"This process has been driven by a foundational principle, that you don’t put something into the market until you know it really works," Kohl said.

"If you think about the idea that programmatic advertising was built over the last decade, and it took years and years for all of its problems like fraud to creep in, where you now have this trust problem. So we are realists. Undoing that is not fast."

True. But every day that Google and Facebook pull larger portions of ad budgets, the urgency to act only increases.

DCN CEO Jason Kint, who led  the formation of TrustX, has been vocal about the growing power of the duopoly – noting that even as digital advertising grows, fewer budgets are finding their way to top publishers:

 

"This has to happen, and I'm bullish on the prospect," said Mike Smith, senior vice president, revenue, platforms and operations at Hearst Magazines Digital Media. "We all need to leverage against the duopoly, But there is a lot of groundwork to lay."

In August, the Association of National Advertisers, whose members include marketers like Nike, Bank of America and Ford, pledged to spend a combined $50 million in ad spending as part of a TrustX pilot program, reported Ad Age.

Indeed, it helps that marketers are generally bought into the idea that digital advertising needs to clean up its act. 

But as Smith noted, it's crucial for TrustX is making sure its software is integrated with the ad tech used by ad buyers and ad sellers. On that front, this past week TrustX has formed a partnership with the Trade Desk, an ad-buying tech company used by many big ad agencies. TrustX is also compatible with Google's popular ad buying software DoubleClick Bid Manager.

Still, the effort faces a slew of not insignificant challenges, say digital ad industry insiders:

  • Simply wrangling the competing needs of a consortium of companies with differing agendas is hard. History is not on TrustX's side here. There is a long list of previous ad consortiums – with names such as quadrant One, Brand.net, Yahoo Newspaper alliance, and Pangea – that struggled to gain traction.
  • TrustX should theoretically command higher ad prices. Yet skeptical ad buyers may be happy to pay cheaper prices elsewhere, even if that means running ads on lower quality sites.
  • Most publishers are still hedging their bets by continuing to sell ads via other programmatic channels ("nobody's turned off the spigot yet," said one media exec)
  • General inertia in ad tech
  • A lack of awareness in the market (several ad buyers and ad tech companies told Business Insider they didn't know what TrustX was)

"We totally understand that thinking," says Kohl. Before TrustX launched, his team consulted with leaders of previous digital ad sales alliances to assess the challenges, he said. 

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One key takeaway from those conversations: TrustX's leadership and power is centralized, and it's not a profit driven entity. It's a lot easier to get things done when you don't have to get consensus from dozens of members and you're not driven by short-term revenue thinking, Kohl explained. 

"Before we launched, we really tried to minimize the risk," he said. "We've really, really done our homework."

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Contributer : Tech Insider http://ift.tt/2yNsib9
Huge media companies like CBS and ESPN are banding together to fight Google and Facebook — but it may not be enough Huge media companies like CBS and ESPN are banding together to fight Google and Facebook — but it may not be enough Reviewed by mimisabreena on Friday, November 10, 2017 Rating: 5

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