Big media players join forces in new ad exchange

Media company NZME, publisher of the New Zealand Herald, has joined forces with Fairfax Media, MediaWorks, and TVNZ to create a local advertising exchange service - Kiwi Premium Advertising Exchange (KPEX).

Effective from next month, KPEX will offer media agencies and clients an option for buying advertising online across New Zealand's leading media businesses.
Duncan Arthur, KPEX consulting chief executive, said KPEX would transform the New Zealand advertising market.

"It's an exciting initiative and the first time New Zealand media companies have pooled their inventory to provide the necessary scale for a private marketplace," Arthur said.
Described as programmatic exchanges, these kind of online biding platforms for advertising inventory are increasingly being adopted around the world.

"Publishers worldwide are wrestling with similar issues particularly in the face of very dominant organisations like Google and Facebook, so what we've seen in different markets worldwide is a coming together of traditional competitors," Arthur said.

The KPEX platform would effectively solve two issues for local advertisers, he said.
"It offers the efficiency of real-time bidding but with the security of knowing that your brand is going to pop up in very trusted premium sites with brand-safe premium content."

Arthur said concerns about competition were addressed by setting the exchange up as a separate stand-alone entity.

"Those are the sorts of questions that have been asked in other markets," he said. "We have the luxury of a model which is quite well developed and well thought through."
The media organisations would also maintain their own ad sales teams and would still sell the majority of inventory through direct sales.

There would also be opportunity for other New Zealand media organisations to use the KPEX platform over time, Arthur said.

Financial details of the agreement won't be disclosed other than that the four media groups will be equal partners in KPEX.

Media commentator and StopPress deputy editor Damien Venuto said KPEX was similar to the Pangea Alliance, which has seen The Guardian, Economist and a few other companies team up to provide premium inventory.

"It seems to be a case of local publishers teaming up to fight against the international juggernauts that are chomping away at ad revenue," Venuto said.

"The formation of KPEX will hopefully allow for more of the money spent on digital advertising to end up in the local market, rather than being fed into global exchanges."
The online ad exchange market had been largely unregulated until now, he said.

"By creating an ad exchange filled with premium, reputable inventory, it hopefully avoids some of the issues that have in the past hindered digital advertising."

KPEX is powered by global technology company Rubicon Project.

- Liam Dann