The business news publisher Bloomberg Media will stop serving open-market third-party programmatic display advertising on both its website and mobile app, beginning Jan. 1, 2023, according to chief executive officer Scott Havens.

The publisher will also discontinue its use of vendors whose recommendation products divert traffic away from the Bloomberg website, such as Taboola, its current content recommendation vendor.

The decision aims to improve the user experience, as open-market programmatic display ads undergo few quality assurance processes, meaning the creative or product they market could be misaligned with the Bloomberg Media brand. While open-market ads only represent about 5% of the publisher’s inventory, the decision will mean turning away short-term ad revenue for longer-term gains.

Citing data from internal testing, the publisher believes the improved experience will encourage readers to return more frequently, consume more content and build more regular habits. Bloomberg Media will also use the newly available inventory to serve house ads, promoting its editorial products, such as newsletters, podcasts, events and television programming.

Over time, the publisher hopes the increased consumption will offset the initial decline in programmatic revenue, as well as convert more readers into subscribers.

“I expect us to make more money from this decision over the long term than we are going to lose,” Havens said. “If you make a good product and people enjoy their experience, they are more likely to remain a customer. Media businesses have not cared as much about that as they should.” 

The decision to eliminate open-market third-party programmatic display ads tracks with a larger shift occurring in the media industry, as more publishers recognize the need to design their websites to prioritize readers, rather than over-stuff pages full of ad slots, if they hope to generate reader revenue. 

Bloomberg Media, a privately held publisher with a billionaire owner, has more leeway than most to adopt such long-term strategies, but the decision signals a growing awareness of the importance of user experience when selling digital subscriptions.

The switch also reduces the reliance of Bloomberg Media on open-web programmatic inventory, whose value has decreased as privacy regulations have made data more difficult to collect, said Troy Young, the former global president of Hearst Magazines. 

“The calculus is changing,” Young said. “Is the yield worth the negative user experience? If programmatic is a small percentage of inventory, yield is going the wrong way and you have a new means of monetization in reader revenue, more publishers are going to reach the same conclusion.”