Technology has been taking giant bites out of the publishing business for going on 20 years now. First Craigslist hoovered up all the classified ads. Then news aggregators devalued content. Now, the shift to computer-automated -- ie. programmatic -- ad buying is putting the squeeze on smaller publishers, who lack the technological wherewithal to keep up.
Enter
Under the deal, the Local Media Consortium will launch a private ad exchange powered by DoubleClick Ad Exchange. They'll also be able to use the DoubleClick ad platform to manage their inventory and AdSense to place contextual ads on their sites, with Google sharing revenue from all ads sold.
For advertisers, private exchanges like the one LMC is launching are a way to realize the benefits programmatic offers -- ie. high efficiency and low cost -- while maintaining a modicum of control over where their message shows up.
"What we've seen over last several years was a rise in realization by quality brands that they want to be associated with other quality brands," says Richard Gingras, head of news and social products at Google. "The real question was how could we extend that opportunity to brands in local markets that don’t have the same wherewithal to make these kinds of sales."
Collectively, the LMC's members have serious scale, generating 10 billion ad impressions a month. But "individually, each of these publishes might have been finding difficulties talking to national advertisers," says Laurent Cordier, managing director for the Americas of news and magazine partnerships.
And national advertising is where newspapers need the most help. Revenue for the category dropped 11.7% in 2012, more than twice the decline rate of retail or classified.
Publishers haven't always seen Google as an ally. While it drives more than 10 billion visits to news sites every month, it has also arguably cannibalized classified and direct-response advertising in much the same way as Craigslist. Some publishers -- Rupert Murdoch most vocal among them -- felt that Google News violated their copyright by showing the opening sentences of articles, although that sentiment has largely faded.
Things have changed in the last few years as Google has undertaken a charm offensive with the media industry, making explicit its desire not just to catalog all the world's information but to bolster the quality of the information available, and the financial health of the companies that provide it.
"To Google, this is tied to our core mission," says Gingras. "How do we connect people to the best knowledge? Obviously the embedded requirement is there’s a good and rich system of knowledge out there."
