It’s Time to Rethink AdsRay Faust, VP Emerging Media October 13, 2015

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The Upper Midwest’s Largest Media CompanyIn-step with an ever-changing landscape, we build upon our storied history with insightful vision and technical acumen—solving problems, creating opportunities and enriching relationships.

Digital Services» 1000+ digital direct advertisers» Dual instances of Google DFP and DCM» Display, Email, Paid Search and Social» In-house Paid Media team managing data and analytics for 300+ clients» 120,000,000 monthly Paid Media Imps

Publisher Monetization» Optimized yield management for 20+ pubcos» Facilitated 2.7 Billion Imps YTD» In-house Yield Team» Nearly 30 years of combined

programmatic experience

ST Operations» 148 years old; 5 Pulitzer Prizes» 5th Largest Sunday paper in the country»Print editions for:

Washington Post

USA Today

Pioneer Press» 8M Monthly Uvs» 250,000,000 monthly O&O Imps

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Our Approach

Current State: Direct Sales & Holistic Yield

» Priority on Direct Sales / Sponsorships

» Make all Impressions capable of being viewed

» Facilitate competition between direct / indirect demand

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Sales Strategy

Differentiate our O&O inventory

» Make advertising on ST.com the most unique, impactful opportunity possible

» Sponsorship - large format, IAB Emerging Stars» Portrait (300x1050), Billboard (970 x 250), Halfpage

(300x600)

» Run-of Network (RON) »Reach customers across devices, allows campaigns to fill

efficiently

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Sales Strategy

Focus on Paid Media Services

» Audience Extension, Audience Targeting, Paid Search

» Focus on Campaign Management reduces need to oversaturate users with frequency

» Allows for differentiation; migrating away from O&O Imp based campaigns

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Holistic Yield

Price as a driver

» Direct sales has greatest leverage to drive revenue

» Direct & programmatic given equal footing

» Priority given to highest “bidder”

» Increased competition has lead to significant eCPM growth

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HY - Effect on Total eCPM

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Audience

Direct Sold

Sponsorships

Pricing

Programmatic

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Holistic Yield Strategy

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Viewability

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Viewability

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Viewability

Publisher inventory needs an overhaul

» Overall reduction in impressions necessary given where market is headed

» Ad strategy by user type; favors prem. pubs with paywalls» Direct Opportunity - Increased performance; sponsorships

become even more premium» Indirect Opportunity - Emphasis on maximizing potential

yield on UVs

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Viewability

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Viewability

Requires Holistic Approach

» Site design with thoughtful ad placements – 4/15

» Enabled lazy load – 5/15

» Positive -- CTR and eCPMs doubled; sell-thru rate ⬆

» Negative -- traditional Indirect inventory reduced

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Viewability

Revenue and User Benefit» Ads rendering in real-time, faster load times

» Holistic yield + campaign management focus» Fewer ads overall» RPM per user push» Maximize yield without exhausting user value

» Positive -- CTR and eCPMs doubled; sell-thru rate ⬆» Negative -- traditional Indirect inventory reduced

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Ad Blocking

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Ad Blocking

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Ad Blocking

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Ad Blocking

Extremely fluid situation

» Taking an active approach - 10/1 “BTB” exercise

» Favors paywall / subscription tier for Ad Free / Lite

» Favors direct sales first approach; sponsorship model

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Ad Blocking

Ad Blocking - BTB

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Ad Blocking

Revenue implications

» Incremental Subscription revenue with premium tier

» By addressing Viewability, we’re reducing ad overload

» Ultimately, Ad Blocking users are bypassing our commercial means for driving revenue

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Ad Blocking

So What Can Publishers do?

» Lots and not much – Rethink Ad Server / CMS

» Trade Association pressure (IAB, OPA, LMC) » Make sure readers know you value commercial engagement

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Ad Blocking

Develop a Plan & Enjoy the Ride

» The state of change is breathtaking

» Make this a priority to monitor how AB develops

» Stay close with your partners; let them know it’s a priority

» Determine what makes sense for you