Publishers Form Advertising Alliance To Compete With Facebook and Google

The Guardian, the Financial Times, CNN International, Reuters and the Economist have formed a combined advertising alliance to pool together their user data and advertising space in an attempt to compete with online giants such as Facebook and Google.

In its press release, The Guardian said that the Pangaea Alliance promises to give brands access to 110 million online readers “using a computerized, or programmatic, advertising system.”

“Pangaea’s uniqueness lies in the quality of its partners,” said Tim Gentry, global revenue director of Guardian News & Media, publisher of the Guardian, which is leading the initiative. “We know that trust is the biggest driver of brand advocacy, so we have come together to scale the benefits of advertising within trusted media environments, which are geared toward delivering cutting-edge creative campaigns in technically advanced formats.”

The alliance will launch in beta in April and will be managed by a central team that will include members from each publisher. The publishers will work together to share data and formats to provide advertisers with a unique set of insights and targeting capabilities. Each of the publishers is said to be committing 10 percent of its ad inventory to the alliance.

Once the initiative is fully launched later this year, the plan is for Pangaea to have its own dedicated sales team offering advertisers a single port of call, without replacing existing channels at the publishers involved.

The concept is that the alliance will give advertisers greater reach while maintaining a high level of inventory quality by bringing together an influential and trusted global audience for advertisers. The hope is that by pooling their audiences together, these publishers will be positioned to better compete with audience giants like Facebook and Google.

“The quality of the Financial Times audience is what our advertisers buy,” said Dominic Good, advertising sales director at the Financial Times. “Pangaea is an exciting initiative that strengthens premium publishers’ proposition by guaranteeing a trusted advertising environment, building significant scale and sharing smart targeting abilities.”

Rubicon Project will provide the technology for this venture. “This is the sixth publisher collective Rubicon Project has powered, bringing competitive publishers together to offer buyers around the world unparalleled reach of premium audiences enriched with data,” said Jay Stevens, general manager, international at the Rubicon Project. “As the industry consolidates with an increasing amount of advertising planned and bought by agency trading desks, publisher collectives enable media brands to collaborate and compete for share of media plans against global digital competitors such as Google, Facebook and LinkedIn.”

Certainly, Facebook and Google currently dominate the digital advertising space, due to sheer reach, and according to a report by Nieman Lab, news companies make up only 12 percent of the total digital ad market.

According to statistics from eMarketer, Google and Facebook control half of the total digital display advertising market in the U.K. alone, which is worth well over £1 billion. “The data is crucial,” explained Tim Gentry, the Pangaea project leader. “One thing we can do together is share first-party data with each other and create unique, compelling audience segments.”

The Guardian stated what will help them the most is the fact that one in four of the 110 million users across the Pangaea network are in top income segments, while one-fifth are either c-suite or senior management executives. With the partners sharing their first-party data, The Guardian explains that advertisers will have a unique ability to understand this premium audience.

Scale is of massive importance when it comes to online advertising. On their own, publishers like The Guardian, which according to comScore has approximately 43 million monthly unique desktop users, are largely unable to compete with companies like Facebook, which has approximately 1.4 billion monthly active users. Due to this major gap, publishers such as The Guardian find it difficult to entice advertisers to make their large, high-traffic digital advertising buys. The hope is that through this alliance, they can begin to close the gap and charge higher advertising rates, which are shared across the group.

However, Gentry didn’t reveal the actual revenue share between the publishers. Additionally, while he didn’t specifically state how much additional revenue the Guardian hopes the Pangaea network will add to its business, he did say that in the first few months he expects “small increments, rather than big transformations.”

Gentry explained that the alliance will not be limited to the launch partners, and he told Business Insider that it is in an “advanced stage of discussion” with a couple of additional publishers about joining in the coming months.

We’ll be watching closely to see how this interesting initiative is received by the advertising industry when it is launched in beta in April.