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Rogers, Shaw, CBC strike online advertising pact

A Rogers Communications Inc. office tower is seen in downtown Montreal, March 6, 2009.

Shaun Best / Reuters/Shaun Best / Reuters

Three of Canada's largest broadcasting companies are putting rivalries aside in hopes of attracting more advertising money to their websites.

The media units of Rogers Communications Inc. and Shaw Communications Inc. , along with Canadian Broadcasting Corp., have struck a deal that will see the companies join forces in selling online advertising. Their new venture will allow advertisers to bid on advertising space, based on information the broadcasters know about their customers from monitoring activity on their websites.

If a reader goes to the website of Shaw's Food Network, for example, and her browser history indicates that she frequently visits Shaw-owned and Rogers', it would alert advertisers that there's a decent chance a middle-aged woman is the reader. Advertisers that have expressed an interest in reaching this type of consumer would then be able to bid in a real-time auction to place their ads on whichever articles are opened by the user while visiting any of the companies' 100-plus websites. The whole process is done by computers and takes one-tenth of a second.

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The unusual alliance by three companies that fight each other fiercely for TV viewers and advertising dollars underscores the headwinds being faced by traditional media players. As readers and viewers spend more of their time online, media companies are following them there. But there is constant pressure on Web advertising rates, and digital ad sales are dominated by goliaths such as Google Inc.

Shaw, Rogers and the CBC hope that by making it easier for advertisers to reach the readers they want, they'll steal business from Google and others and be able to charge higher rates, delivering millions in additional revenue.

"There's been a huge shift in the advertising market from buying websites to buying audiences," said Jason Tafler, the chief digital officer at Rogers Media. "Instead of buying a website and reaching everyone who goes to that site, this allows an automotive company to say they only want to reach men [or women]of a certain age."

The network doesn't use proprietary data from any of the companies' customer databases. It tries only to predict what a reader is interested in based on which of the three companies' Web pages have been visited in the past by that computer.

"It enables us to target people who have a propensity for [certain content]" said Alan Dark, the executive director of the CBC's revenue group. "That way when you serve an ad to them, you're making it as efficient as possible and not just throwing ads out there to a super wide audience."

The CBC hasn't allowed third-parties such as Google to sell ads on its sites in the past, because those companies don't share the customer data they gather. That means the new ad exchange is a new source of revenue for the broadcaster, at a time when federal budget cuts make every dollar count.

The companies also believe they hold another advantage over Google and similar services that serve up ads on millions of websites: They can tell advertisers with certainty which sites their ads will appear on.

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"They know without a shadow of a doubt that their brands will be showing up on a premium set of digital assets versus some obscure place on the Web," said Paul Burns, vice-president of online experience at Shaw. "We're trying to spur the notion of a more effective way to buy and sell media."

The companies' ad exchange is expected to launch May 16. While it will start with the three partners, they are open to expanding the network to include other Canadian media companies.

"If others do decide to be interested in the program that are legitimately considered premium ad inventory it's absolutely worth having a conversation," he said.

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