Cutting Out The Middlemen

Edmund Lee of Ad Age Digital examines a new system that allows the biggest newspaper and TV companies to sell online advertising in a private exchange:

The nation’s largest newspaper and local TV companies have created a new system to sell online advertising in a private exchange, part of a growing shift by publishers to take control over the digital ad-buying process in an attempt to raise ad rates.

The New York Times Co., Hearst, Tribune and Gannett will start selling the bulk of ad inventory for its newspapers and local TV stations in a closed system to be administered through the consortium’s joint venture, called QuadrantOne. While the news publishers had formed that venture in 2008, the new selling system restricts almost all of the consortium’s inventory of web pages to a single entry point.

It’s the latest group of publishers to attempt to raise ad rates by forming an exchange, following media companies such as CBS Interactive, Forbes and The new exchange means the papers and TV stations will stop dealing directly with ad networks, though networks will be free to buy from the exchange like any other advertiser. The exchange won’t include the biggest online properties owned by the joint-venture partners:, and

The private exchange signals a renewed seriousness on the part of publishers to reclaim ownership over its ad inventory — even that which they cannot sell directly — from a middle layer of companies including ad networks, data firms, ad-serving technologies, verification companies and others which siphon off a fair chunk of the costs that an online publisher would charge to an advertiser.

“This is really a major strategic move for the owners and a way to get ahead of where the market’s going,” said Michael Zimbalist, part of the New York Times Co.’s research and development arm and a board member of the joint venture. “The market’s been craving something like this.”

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