Body language can be as revealing as words. So the fact that the sales chiefs of News UK, Guardian News & Media, Telegraph Media Group and Reach were happy to talk together for the first time on stage at Campaign’s Digital Media Strategies conference about how they have pooled their online ad inventory was symbolic.
The four news publishers, once fierce rivals, are equal shareholders in The Ozone Project – a joint venture to sell digital display-ad inventory and aggregate their data at scale.
Ozone positions itself as a trusted, brand-safe and fraud-free environment that attracts 42.5 million engaged readers a month across titles including The Sun, The Times, The Guardian, The Daily Telegraph, Daily Mirror and Daily Express.
Collaboration would have been unthinkable until recently but the Google-Facebook duopoly has forced their hand. UK news brands’ annual ad revenue has nearly halved to £764m since 2010, with digital worth only £277m, Group M says.
As Dominic Carter (pictured above, second from right), chief commercial officer of News UK, puts it: "We are creating a platform to help save publishers in the long term."
The British newspaper groups announced their plans for Ozone last June, after attempts to pool all ad sales, including print, were stymied by regulatory fears. Now the platform is up and running, it has a chief executive, Damon Reeve (pictured above, right), and about a dozen staff in a London office, plus six developers working in Poland and the US.
At least half-a-dozen advertisers, including Dunelm, Betfair, William Hill, Quilter and Jet2, are using Ozone to buy and target ads.
The results of test campaigns are said to be good. Angela Porter, marketing director of Dunelm, says: "It has certainly delivered reach for us, and the dwell time on the articles [that our ads appeared] around exceeded expectations."
Dunelm recorded increases in preference and consideration and higher conversions from ecommerce transactions on its own site, according to Sam Drake, managing partner at Goodstuff Communications, Dunelm’s agency.
Giving brands direct access to publishers’ first-party data at scale is a major focus for Ozone, which has been talking to Direct Line, Sainsbury’s, Sky, Tesco and Vodafone.
"We’ve had a lot of direct interest from brands wanting to connect their first-party data to publisher first-party data," Reeve says, noting that privacy regulation such as GDPR and the rise of in-housing are driving it.
Still, some of the publishers are impatient for more companies on the buying side, particularly big agency groups, to embrace Ozone. The news publishers have heeded calls to unite their offering, and "we need the market to respond", Piers North (pictured above, left), group digital director of Reach, says.
Carter is hopeful that Ozone is nearing a "tipping point" with agencies. If there is a reason some buyers and intermediaries may be hesitant, it is that a more direct, transparent relationship between advertisers and publishers potentially threatens the third-party commercial interests.
'The open marketplace is not the place where advertisers should be'
— Dominic Carter, News UK
Cleaning up digital advertising
Ozone has not just been a defensive move, the publishers insist; they believe there is an imperative to clean up digital advertising.
The promise of programmatic was that it would lead to efficient, automated, data-driven ad-buying. The reality was that the market became "broken and dysfunctional", according to Reeve.
Advertisers and agencies focused on audiences, not context. Media owners overloaded their sites with ads and allowed, sometimes unknown, tech companies to put pixels and tags all over the page and harvest data for their own benefit (in some cases not even buying ads and using that data to buy more cheaply elsewhere). That slowed loading times and created a poor user experience.
What’s more, as Hamish Nicklin (pictured above, centre), chief revenue officer of GNM, puts it, advertisers discovered "there’s a dark side to reach" when they chase scale at the lowest cost and their ads are served next to inappropriate content.
The open marketplace became opaque as GNM found when it bought its own inventory in 2016 and only got 30p in the £1. Now advertisers are waking up and "want to see end to end" when it comes to their ad-buying, Nicklin says.
Carter adds: "The market just needs to start accepting that the open marketplace is not the place where advertisers should be."
Taking control of data
Reeve, an adtech veteran, says the key for publishers is to take more control of data, especially as Apple and others are restricting cookies in browsers. Ozone therefore plans to move all third-party pixels and tags "off the page" into a server environment by the end of the year.
Reeve talks about "moving the pendulum from where we are today to a world which has the interests of brands and publishers more at heart". Most importantly, it is "good for the readers", according to Dora Michail (pictured above, second from left), managing director of commercial growth at the TMG, because the experience should be better. Significantly, this shift means the relationship between advertiser, agency and publisher is becoming more triangular – rather than linear from advertiser to agency and then agency to publisher.
"The primary relationship that Ozone is interested in is connecting first-party data between the brand and the publisher," Reeve says.
"This is a compliant way of being able to build custom audience and audience understanding that is separate from media activation [which is more likely to be carried out by the agency]." He insists Ozone is not "trying to cut out agencies".
Reeve adds that it is relatively easy to share revenue between the publishers because automation and real-time bidding means all inventory is treated equally on the basis of the desired audience.
Ozone says its initiative is not about cutting costs but rather driving efficiency by eliminating third parties that add no value. "It’s about finding ways to put more money into working media because we all run large news rooms and it’s important we sustain that," Michail says.
What buyers and brands think
Sam Taylor, head of group commercial marketing at Direct Line Group, says Ozone "couldn’t have come at a better time for marketers", which want assurance that "their ads will be viewed and placed against quality, engaging, editorial content and in brand safe environments".
Porter likes the way that Dunlem can target a custom audience "who we knew were interested in homewares" via Ozone. "The fact that its whole model is based on contextual relevance made sure we weren’t just looking at demographics," she says. However, she adds that they need more publishers to get involved to ensure the ability to reach new audiences in the future.
That’s a sensitive issue, as some publishers, notably DMG Media, owner of MailOnline, has stayed out of Ozone. Reeve hopes more news and magazine brands and broadcasters might join and suggests the digital ad market is so large that it should not raise competition concerns.
Emma Dibben, head of media partner engagement at Wavemaker, says Ozone has had "a halo effect" on news brands and is "gaining traction with clients and agencies".
Still, some in the industry have doubts about the need to buy via Ozone when they can still go to each publisher to buy inventory. One buyer wants to see more case studies and worries about whether "inventory gets prioritised for Ozone versus clients buying via other routes", as the highest bid wins. Others question data costs and the incremental revenue Ozone might generate. "It probably won’t last in my opinion," one doommonger at a big agency group predicts.
However, after years of falling revenues and inaction, the publishers can’t be faulted for challenging a status quo stacked against them.