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Publisher Set To Unveil Private Ad Exchange

17 Nov 2011

The assault on third-party ad networks continues. On Tuesday, Conde Nast, publisher of magazines such as The New Yorker and Vanity Fair, is launching a private ad exchange to sell unsold inventory on its digital properties to a select group of advertisers. The US exchange, powered by Admeld, will feature CPM price floors and real-time bidding.

"Like any publisher, we're interested in maximizing the revenue on our inventory," said Drew Schutte, exec VP and chief integration officer at Conde Nast. "By opening a private exchange, we're getting all the controls we wanted while providing access to our premium advertisers who commit to Conde Nast in the most significant way."

The minimum requirement for advertisers to get access to the exchange was that their fourth-quarter ad spend with Conde Nast this year had to be higher than last year's. Five advertisers, including eBay and Macy's, will have access to the exchange through the end of 2011. Mr. Schutte said Conde Nast will offer access to more advertisers in 2012.

The exchange is the latest in a trend that's seeing similar private offerings pop up across the digital media landscape. Last week, AOL, Yahoo and Microsoft finally announced their long-rumored private exchange that they hope will raise CPMs on inventory that they believe is undervalued on third-party ad markets. The difference here is that Conde Nast hasn't previously made any of its inventory available on third-party platforms other than a brief test in 2007 selling ads through ad networks, Mr. Schutte said. As a result, the central goal is to simply increase the sell-through on its inventory.

Advertisers will be buying audiences on the exchange, and so will not have the option to choose which sites within the Conde Nast digital family their ads will run on. The exchange does not include video ad inventory or inventory from the company's mobile or tablet apps.

Still, having the ability to access Conde's inventory more efficiently through automated buying was attractive to eBay, said Chad Wehrmaker, the company's director-display marketing.

"The dynamic nature of pricing married with brand-safe inventory plus the ability for us to use our first-party targeting data and customer segmentation make it very interesting for us," Mr. Wehrmaker said.

Conde Nast said it will not initially make its own first-party data available through the exchange.

Mr. Schutte said he doesn't expect more than 35 per cent of the company's total digital ad inventory to be available on the exchange at any given moment, with the majority of inventory still getting sold direct through the company's sales teams and some inventory continuing to be set aside for house ads and promotions.

Admeld, which is awaiting the close of its acquisition by Google, also powers private exchanges for The Weather Channel's digital offerings and NBCUniversal.

"For publishers," Admeld CEO Michael Barrett said, "private exchanges are a way to get a hold of dollars shifting toward programmatic buying, but not in a way that affects their direct sales and in a way that's transparent to who's buying and at what price."

Asked how his company's private-exchange business may be affected by the closing of its sale to Google, Mr. Barrett said: "Google was well aware of the private-exchange business when the acquisition was made and it's something they highly value."

Source: AdAge

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