Tired of getting low CPM prices from your digital ad networks? Why not just ditch them?

Rupert Murdoch’s News Corporation has cut all relationships with third-party ad networks and launched a global digital advertising exchange to sell ads direct via programmatic real-time bidding (release).

News Corp is now selling online and mobile inventory via the News Corp Global Exchange, which is run by programmatic trading firm the Rubicon Project and includes inventory from more than 50 sites and mobile properties.

This is part of a growing trend of publishers taking back control of their inventory and making better use of first party audience data via real-time bidding (RTB), instead of relying on low yield networks.

News Corp CEO Robert Thomson, who has called aggregators parasites before, said:

Content aggregators would like to commodify our content, while data scrapers would like to aggregate our audience – the only way to reach the world’s greatest content and the most prestigious and lucrative audiences is directly through our digital properties. Third parties are no longer invited to the party.

What does this really mean?

Direct vs programmatic: This doesn’t mean News Corp won’t be negotiating ad deals on a direct basis. It’s not an either-or fight between RTB and direct selling and News has made it clear direct relationships will remain. Our piece on how the Guardian and Future balance the two is useful on this.

Targeting segments: What programmatic does offer is relevance. News will be able to allow advertisers to “target a number of difference segments on a global scale via premium quality inventory and unique data.”

Selling across brands: Media brands matter, but finding the right audience matters more. With its exchange, advertisers will be able to target specific demographic groups across different brands and across territories. When advertisers follows the individual user, it can be more effective.

A positive step?

There remains a feeling across the industry that RTB is in some way cutting into price margins and hitting publishers’ topline profits as budgets go from print to screen.

These are legitimate concerns. RTB represents about 12 percent of the UK digital display market now and will reach a third by 2015 (according to Google).

But rather than a saviour, programmatic advertising is starting to be viewed for what it really is: one of the many tools modern digital ad sales professionals need to understand and properly investigate.

Private exchanges like this are common – almost every major London publisher uses them in some way. But the scale and the rhetoric of what News Corp is doing is significant.

As my colleague Jasper put it back in April, the question remains:

How confident are you that there will always be ad buyers out there prepared to pay a premium for an ad campaign on your site rather than using RTB to reach large audiences of carefully targeted consumers both more quickly and cheaply?

Sidenote: all eyes are on Rubicon to announce a stock exchange flotation this year, along with several adtech peers,  an event that would mark the maturity of programmatic trading as a media segement.