Traditional media publishers once fiercely committed to knocking each other out are laying down arms to create powerful new consortiums to beat the audience "gatekeeper platforms" like Facebook and Google at their own game.
Most premium online publishers admit privately that Facebook and Google have them pincered – on one hand the search, video and social platforms are highly profitable because they don't invest in content but pirate from professional media groups for their own commercial benefit to keep users engaged on their respective platforms. But on the other hand for professional publishers, the new tech-based audience gatekeepers – which have unprecedented local and global audience scale compared to any old-world media conglomerate – offer a lifeline in "audience reach" to distribute content to broader audiences.
This "trojan horse" strategy has played perfectly into Facebook, Google, LinkedIn and to a lesser extent Twitter's commercial agenda – they pay nothing for content that others fund and then exploit the benefit that professionally created content offers to keep users returning to their platforms.
For the March quarter Facebook's top 30 pages in Australia for user "engagement" and growth in page "likes" is dominated by traditional media players in radio, news media and television, according to analysis by digital agency Online Circle.
However, Facebook, Google and YouTube sell advertising against professionally created media content at a fraction of the cost that publishers can on their own audience networks, creating more pressure on the economics of original content funding. And finally these tech-media operators through their "walled garden" policies offer advertisers sophisticated audience targeting options for users that "open web" publishers have not been able to match so far.
The conflict has sparked a wave of publisher alliances around the world. The Guardian, CNN, FT, Reuters and The Economist, for instance, have joined forces to create The Pangaea Alliance, which promises more than 110 million "influential individuals" globally across its combined network with a data and "tech stack" to rival Facebook and Google.
Iconic French media groups
In France, two publisher alliances, Audience Square and La Place Media – which counts iconic media groups such as Le Groupe le Monde and Figaro Medias in rival camps – have together reclaimed trading of premium online advertising inventory to nearly 100 per cent of the entire French market.
According to Pippa Leary, CEO of APEX in Australia, which is a similar local publisher alliance for mobile advertising that includes Mi9, Fairfax Media, Daily Mail Australia and likely the local version of The Huffington Post, French publishers have lifted yields 60 per cent by offering "brand safe" environments that the so called open exchanges from the likes of Google and Right Media can't.
"What happens in those big open exchanges is that a lot of non-professional websites are swept up in the mix and it's completely blind. You can't determine where your ads will turn up," Ms Leary said.
"The number of publisher alliances that are forming is like a tsunami that's breaking. It started in Western Europe and is just moving across every market. And what's ironic is that in this world of David and Goliath, where the Goliaths have become those massive internet service companies like Google and Facebook, they have got so much technology at their fingertips that publishers have actually gone back and got the technology and created these publisher alliances and they're much more nimble and they're much more focused."
Ms Leary said APEX was doing likewise in Australia. "The idea is we get a publisher alliance together and we remove as much premium inventory from Google and Facebook as possible so that advertisers realise when they buy there is no chance of getting any premium ads there," she said.
"If premium inventory continues to get mixed up with amateur long tail inventory in these open exchanges like Google and publishers don't control the environment in which they're trading, premium will continue to be offered alongside more amateur long tail content and the yields can only come down."
The APEX mobile exchange has been in beta development for much of this year but is set to start open trading at the end of this month with conversations underway for another five publishers in Australia to join. But Ms Leary admitted the historical combative nature of the Australian media market still meant there were hurdles to leap among rival publishers even though most accepted the new tech players were eating their lunch.
"Everyone loves the idea but one of the difficult things about these alliances is you have to be looking at it long term," she said. "You can't be wanting results in the first or second quarter. The other publisher challenge is engaging with traditional competitors, which in the Australian environment is particularly hard because it is so consolidated and small."
But Ms Leary said one upside was the enthusiasm coming from the growing number of in-house digital advertising trading desks that blue chip advertisers were launching – Woolworths and Quantium, Commonwealth Bank, Coles and Qantas were far more receptive to these alliances and benefits of premium-only advertising environments, she said. Some media buying groups were also enthusiastic although the agency market was split.
"Some agencies are incredibly receptive to it but some are just totally into cheap inventory and that's what they are getting – cheap."
