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Hamish Nicklin: how The Guardian and Ozone are reinventing premium advertising at scale

There are still plenty of brands out there to be persuaded of the value of premium digital advertising, according to The Guardian’s chief revenue officer Hamish Nicklin. 

Coming off the back the Guardian News & Media recorded an operating profit for the first time in many years, based largely on its ongoing efforts around direct reader revenue, he believes the value of its digital advertising is enhanced by demonstrable support from a premium audience.

Media veteran Nicklin argues that there is still headroom for the membership - and donation-based newspaper to grow the number of brands who choose to advertise with it - provided that the paper and its partners in ad alliances demonstrate the value of premium buying. 

Speaking of the Ozone Project, the premium advertising network the newspaper founded with the Telegraph and News UK, Nicklin says: “Ozone is still, as a combined entity, significantly more premium than the long tail of the open market. I'm not going to make any subjective calls about the journalism on any of the other platforms, because that's not what this is about. This is about saying that through all of us coming together, we combine our environments.

“The Guardian's very different to the Mirror for instance. However, together we still offer a more premium environment than the long tail of the web.”

Nicklin believes that the issue is more acute for publishers like the Guardian, whose relationship with members is predicated on the quality of the articles and other content it produces, whose ability to invest has been limited by low digital advertising revenue.

“It matters for people who are making the content premium because it's only fair that the money goes to the people who make it," he says. "Just as importantly for the advertisers, you want to know that your money is going towards working media; of that pound that I invest, how much of it is actually getting to work?”

Famously, in order to determine the amount of leakage in the Guardian’s own ad networks, the paper received less than a third of the amount it spent on its own digital ads. Nicklin says that, as a result of steps taken following that experiment, and constant experimentation, that situation is improving. 

“We've seen big improvements and we do constantly test. We did a lot of work with all our vendors; we renegotiated our contracts, we asked a lot more questions, and we're now in a place where when we're much more confident that those people that we directly contract with are being as open and transparent as we'd like them to be.”

Despite that, he also noted that complexity of the digital advertising ecosystem means that sometimes Guardian data and inventory will be “flying around” the many other thousands of players within the Lumascape, many of which the Guardian does not contract with.

Reinventing premium advertising

The drive to recreate a premium buying mentality - one that focuses on both the accuracy of audience data and quality content against which ads are served - is being touted as a solution to the issue of relatively low revenue from digital advertising that has plagued publishers over the past few years. Similar attempts to reinvent premium in digital, such as TrustX, aim to separate the premium advertising spaces online from those of Google and Facebook.

Despite that, much of the conversation around alliances like the Ozone Project are still framed in terms of scale, with Ozone itself being described as having an audience size comparable to Facebook’s own following the addition of Reach properties. Nicklin believes that, while scale will always be important to advertisers, some reeducation on the part of the Guardian’s own team and other players within the premium advertising space can convince more brands that reach is not the be all and end all for getting brand messages across.

He cites the ongoing work of the Guardian to ensure that the ads that do appear prioritise quality over quantity as helping to shift that needle.

“Where we come to is a place where a lot of it's our own fault because we [as an industry] bombarded people with ads that have not been very good. We've misused their data and chase them around the Internet with stuff… and we've just annoyed people," he says. 

“You pull all that together and it's no surprise that trust in advertising is at an all-time low. What's really interesting is the group [of publishers] who are coming together that are really demonstrating modern advertising values, because they're focused on meaningful reach: I want scale, but I want scale worth something because it's got attention, as opposed to just hitting random big numbers.”

In that sense, Nicklin believes that the Guardian’s three-year plan to transition to contributions and memberships is a boon to the paper’s advertising proposition. Citing the paper’s growing digital advertising revenue - and the continuing growth of digital advertising more generally - he argues that the ability to demonstrate that audiences buy into the paper’s product and mission through donations is invaluable for proving the worth of premium digital advertising. If it succeeds in its ambitious plans to reach two million paying supporters by 2022, that base of engaged readers could be a big selling point in the Guardian’ discussions with advertisers.

Brexit and brand safety

Brand safety has been another flashpoint for advertisers over the past year, with widespread awareness that ads are often appearing in unsafe environments, with negative associations for the brand. For publishers like the Guardian, the issue is less about having ads appear against toxic or extremist content, and more to do with the fact that some brands do not want to be associated with political issues.

Though Nicklin does not believe any of the advertisers on the Guardian’s site had issues with appearing next to Brexit-related coverage - though he says that issue exists in the US with coverage of Trump - he acknowledged there are times when the “real unintended consequences are where... the technology doesn't really match the intention of the advertiser”

He worries that allowing advertisers to opt out of appearing next to content that contains specific terms might ultimately be detrimental to both publisher and advertiser: “That's the unintended consequence I'm most worried about because actually there's a load of work that NewsWorks have just done working with some neuroscientists that show that advertising next to politics and hard news has more of an impact than advertising next to the more lifestyle magazine-based content, which is fascinating.”

The Guardian’s commitment to proving it has a brand safe environment extends to how it deploys its talent. Nicklin acknowledges that individual Guardian journalists can be a huge draw for its members, but notes that the paper is loath to allow brands to pay to appear alongside individual journalists, as doing so would erode trust in the Guardian’s impartiality and ultimately reflect badly on its place as a brand safe environment.

There is still undoubted headroom for growth in premium digital advertising, and for quality brands to switch from chasing anonymous scale to directly addressing invested audiences. As ever, the challenge for publishers is to continually demonstrate credibility as a ‘premium’ space, one in which advertisers need to pay more to reach the most valuable audiences.

Featured by The Drum

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