News Corp has moved to take control of its programmatic display business and will sever ties with third party ad networks. The company aims to shore up ad revenue and control prices as the newspaper industry continues to face severe headwinds.
CEO Robert Thomson told investors that News Corp's own private exchange, which launched late last month, was a central plank in its plans to bounce back after posting weaker than expected revenues for the three months to September.
News Corp stock fell 4% in after hours trading after it posted total revenues of $2.07bn for the first quarter, down 3% on the prior year. Australian newspapers took a 22% revenue hit. While CFO Bedi Ajay Singh stated that a substantial chunk of that decline was due to currency fluctuations, Thomson said Australia was “particularly soft”. However he said the firm was "confident about our prospects".
Thomson said News Corp “recognised the need to evolve and generate more advertising revenue while becoming “less dependent on advertising revenue” and would sharpen its focus on subscriptions and “the of rise of mobile".
Programmatic trading was one way of shoring up ad revenues, he suggested. The firm's recently launched global programmatic ad exchange had been trading for two weeks, attracting "more than ten" major advertisers.
"We are able to leverage our leading global brands and our exclusive first party data, allowing us much more control over yields and protecting the integrity of our audience,” he told investors.
“We are discontinuing remaining arrangements with third party ad networks. Any advertiser who wants to reach our great content and audiences must do so directly."
GroupM chief investment and intelligence officer Danny Bass said the move made sense because it allowed the organisation to control pricing and liquidity.
"News Corp is one of a select handful of firms that can truly claim to have a global inventory supply. In a world where people are doing global deals [with the likes of Facebook, LinkedIn, Twitter] News gets a seat at the table."
Locally he said it would not have much impact as far as agencies and networks were concerned as the company had "always been cautious about the networks it deals with".
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