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Q&A: CMN's Rusty Lewis and Jon Beck about new advertising options for College Publisher

collegepublisherEditor’s Note: As I mentioned last week, I asked Rusty Lewis at College Media Network to answer some questions related to the company’s announced new advertising option for college newspapers. These responses were supplied by Lewis and Jon Beck, who recently joined CMN on the business side.

When will these new options take effect?

It is a rolling process that took effect January 1, 2011.  We are honoring the contracts we have in place with our newspaper partners.  That said, beginning this month we are giving the requisite 90-day advance notice that we will not be renewing the contract in place with current terms.  We are making one-on-one phone calls with each newspaper outlining our new options, how they would specifically impact each newspaper and outlining the next steps.

The new advertising options are available right now – it is a matter of a few settings changes.

Is the “AdGear” platform currently in use, or is this a new technology that will be used for this new system?

AdGear is currently serving all the ads (both national across the network and local campaigns on CP5) – we made the switch from mish-mash of Atlas and Doubleclick we had under MTV.  We are almost complete with the newspaper access portal to upload ads in AdGear and will begin training newspapers on that system shortly.  AdGear is a huge step forward from both a traffic and flexibility perspective.

This system can be used with any publishing platform.  It comes off-the-shelf with College Publisher and we have ready-made plugins for the most popular open-source CMSs.  Obviously, the advantage of this system is the support and the year-over-year continuity that comes along with the tools.

How do these options differ from the way things were done in the past?

We view this change as a reboot, a chance to make things easier and more equitable for everyone.

Ten years ago, we created a CMS in exchange for advertising rights.  Later, we responded to feedback and developed an ad-deployment tool in the CMS so that a few newspapers with good ad sales teams could deploy local online ad campaigns.

When launching CP5, we contracted a leading vendor to manage the ad system and recreated the two-tiered system in the image of CP4.  As site designs evolved, ad sizes got bigger, and CPMs got smaller it became difficult to keep all parties happy.

This entire change is about making the management of the inventory easier.  The three options break down to:
– CMN sells the inventory (and cuts rev share checks)
– The newspaper sells the inventory (and cuts rev share checks)
– CMN and the newspaper share the inventory and keep their respective revenue

These options address the variety of needs and strengths that exist in the college media sphere.  Regardless of size, we found some newspapers small and large had very good local sales teams and could sell out the inventory.  Conversely (and more commonly), we found that the newspaper focused on content and had little interest or desire for advertising (which is a missed opportunity for everyone).  Obviously, there is a great number of papers in between.  These options address those different scenarios without over-complicating the issue.

Do these options apply equally to all of the CP standard plan participants, i.e. those who are paying the fee and those who are having the fee waived?

Yes.  They are also the same for any newspaper outside CMN that want to participate in our ad network or want access to these tools.

I am not exactly certain that I understand the logistics of the 70/30 plan. Could you explain it in a little more detail, especially as it relates to the higher ad positions on the page, and the way the percentages would work in selling local ads?

The inventory split is really quite simple.  Within AdGear we can set thresholds (by percentage) of available inventory.  We will apply a threshold for newspapers who select this option such that they only have access to 30 percent of the inventory on each ad position.

For simplicity’s sake, let’s say a newspaper gets 100k page views per month on average.  That means in the old model, they had basically 300k impressions (3 ad units X 100k page views) to sell below the fold – which we were told were hard to sell.  Now, with this option, that same newspaper has 150k impressions to sell, but 60k of those can – and should – be sold at a much higher premium (because they are the top spots).

The real critical piece to this plan is that newspapers are committing to sell on a CPM basis when selecting to share the inventory.  This is a tough transition for some newspapers who have found success with the flat rate sponsorship method of online display advertising.  That said, we can share strategies we have seen work at other college newspapers.

One additional layer to this plan is that CMN will back fill any unsold impressions with remnant ad campaigns.  The newspaper will receive 20 percent of the revenue originating from these ads.

Does this preclude the plan participants from selling ads outside of those five positions?

The short answer is no.

The five ad positions are five different sets of ad tags deployed on the page.  The AdGear tools allow newspapers to use a variety of targeting methodologies and strategies to help advertisers get the most out of their placements.

If a newspaper is selling ads on a flat rate basis and their advertisers want full exposure on all pages served, well that is really a sponsorship opportunity and not advertisement.  We fully expect newspapers to offer these advertisers creative ways to have a presence on the site without using up ad impressions through the ad manager.

As to option C, is $7.50/cpm what the cpm is if CP sold the ads, or a percentage of that? if so, what percentage?

CMN underwrites the operation, support and training on the AdGear system with advertising revenue.  Option C, where newspapers pay a CPM to CMN, was designed to enable newspapers to take full control over their inventory.  The $7.50 figure represents the value of each page view if all the advertising positions were filled with ad network campaigns – which pay very modest CPMs.

In this option, the newspaper is essentially purchasing the inventory for a $7.50 CPM – which, when divided out between 5 ad units, is $1.50 CPM per unit.  We felt this was sufficiently low enough where newspapers had the opportunity to markup the CPMs as they sold the inventory.  They are then able to recoup their costs and create net profits.

Could you provide an example of how option C might work?

Using the example above, the newspaper with 100k monthly page views essentially would remit a payment to CMN of $750 per month and keep whatever they made over that.  Obviously, since this is a CPM, the payment would fluctuate with traffic.

If the newspaper is successful and has a sophisticated staff, they can command CPMs in the neighborhood of $5-10 across each individual ad position which more than covers the cost of the inventory.

For the opportunity to have free run of the ad inventory, we are asking the newspaper to assume the risk of selling it out.

How will the ad prices be set for the various ad placements? and will CP be sharing information re: advertising rates with CP5 customers?

The ad prices are set as high as the advertisers will bear.  I cannot publicly disclose specifics around this as it would jeopardize active negotiations with Access Network partners and potential advertisers.  Obviously, when sales close I can privately discuss figures with those newspapers with which we share revenue.

Would a college that opted to go with the WordPress option have the option to join this ad network plan?

The AdGear solution is compulsory with the CMN WordPress package.

Please keep in mind that we are offering the WP solution as an alternative to College Publisher CMS.  Similarly to CP5, we are providing a service to manage the environment and provide a full-service solution for a newspaper’s digital publishing needs.  The ad systems, email newsletter systems, traffic reporting systems, and other core services for content distribution remain the same between the WP and CP5.

To that end, the three ad options remain the same for CMN WordPress package.

What about the hosting option?

The hosting option is literally just a hosting option.  A newspaper has free reign to use whatever set of solutions/plugins/ad tags they prefer.  This hosting option is simply out there so newspapers know they have an option with CMN if they do not want CP5 and are priced out of our WP managed solution.

As a benefit of using this service for hosting (be them WP, Drupal, etc), the access to CMN plugins such as AdGear exists.  In those situations where a newspaper wanted to use AdGear while maintaining their own site, a setup fee would be assessed.  Again, all three options exist and come with training and support.

And, per Daniel Bachhuber’s comment the other day: Are those advertising options the same as what’s available to the lower-end Polopoly users or different? If different, what are they?

AdGear is the same 5 ad spots no matter what content management solution is used.

To be clear, these changes we are making to the CMN business separate the content management solution and the advertising system completely.  CMN is providing them as a package for CP5, but the ad software solution can be licensed as an a la carte option for any newspaper using any hosting facility on any CMS.

On a related note: How do these options affect advertising on mobile?

We have the capability to schedule and deploy mobile ads through AdGear.  This is part and parcel of the AdGear service.

Anything else you would like to add at this point?

Banner advertising is still a useful way to drive revenue for publishers, but its best days are in the rear view mirror.  Banner ads will never have the value they once did.

The vision for revenue at CMN looks for opportunities beyond traditional display advertising.  CMN, in sort of a newspaper holding company capacity, can enable sponsorship opportunities with major brands across the entire network that can be lucrative enough to share revenue with every network member.

We will be looking for beta testers for these revenue sharing programs.  When we have seen some success, we will share the data and begin applying these measures across the network at large.

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