The monopolisation of advertising dollars by digital behemoths Facebook and Google over the years has seen a sharp decrease in advertising revenue for publishers of all sizes.
Backed into a corner, some publishers in Asia Pacific have banded together with rivals to create a publisher co-op, which is a programmatic private marketplace (PMP) to share ad inventory and sell to buyers or group of buyers. The co-op also allows publishers to have greater transparency to track and control the inventory, while the advertising technology eliminates the need to do the traditional direct buys with multiple publishers.
One such successful co-op is the global Pangaea Alliance, which consists of CNN, The Guardian, Fast Company and Reuters. Led by CNN, the alliance is into its second year after a shaky start when it fell out with tech partner The Rubicon Project. It is now partnering with AppNexus.
According to Martin Bojtos, global sales director at Pangaea Alliance, there are five main reasons why brands and agencies use Pangaea, all of which are geared to making the buying and execution process simpler, more effective and scalable.
“We offer access to high-net-worth, business-skewed audiences at scale and make brand-safe, highly viewable environments available, again at scale,” he tells The Drum. “We make the buying process simple with just four price points and we offer considerable reach in almost all major countries and finally, unique data as a result of sitting atop all of our partners.”
There is also a growing trend for publishers to collaborate more to add incremental revenue and offer advertisers something different, adds Fiona McKinnon, general manager at Pangaea Alliance. “Two years in, Pangaea is probably the best example there is of a successful publisher alliance because our members have worked together to refine our offering, work with global advertisers and now look forward with exciting plans to expand what we offer advertisers and set the standard for the industry,” she says.
Meanwhile, in Japan, three publishers, Succor King, J-cast News and Auto Sport have enjoyed similar success, akin to Pangaea, with their Delta Publisher Alliance, a first in the Asian country.
Represented by digital ad platform AdAsia Holdings, the alliance first started in mid-2016 and supply was concentrated on specific platforms and vendors. Now, Delta has now grown to become the central point of PMP deals across Japan.
This has seen PMP deals for Delta in Japan for 2017 increase 185% from 2016, according to Hitoshi Maruyama, director of publisher engagement at AdAsia and he attributes this to the alliance opening up its channels by allowing buyers to increase the number of sources they can buy from.
“This provides open and balanced competition to the industry, and allows buyers to access a more diverse range of inventory sources,” he explains. “Additionally, the demand for PMP deals from both marketers and publishers is increasing - coinciding with Delta opening up channels - creating an ideal environment for this alliance to work in.”
Over in New Zealand, four of the biggest media publishers in the island country, Fairfax Media, MediaWorks, New Zealand Media and Entertainment, and Television New Zealand formed the Kiwi Premium Advertising Exchange (KPEX) in 2015.
The alliance was established as an independent business outside of the shareholder organisations to enable the publishers the freedom to move fast and innovate, Richard Thompson, chief executive officer of KPEX told The Drum.
“Once we had comparable reach to the global players within NZ, the data capability to build highly relevant audiences for advertisers and an organisation structured for innovation we had in place the foundations that would enable us to compete,” he adds.
Thompson goes on to explain that at a very early stage, KPEX reframed its competitive set within the digital space from traditional NZ media organisations to a shared understanding of what the country’s publishers needed to compete more effectively for digital share alongside the global players.
Since then, KPEX’s focus has been streamlined to deliver against the three key areas of scale, data and innovation. “Individually each media organisation didn't necessarily have the ability to deliver scale but collectively we see approximately 80% of the New Zealand population each month. In addition, across KPEX we see almost every device in New Zealand enabling us to create a very powerful data targeting proposition,” says Thompson.
“I think the most important factor in our success to date has been the shared vision and continued commitment to KPEX held by our shareholders and inventory partners,’ he adds.
Like Pangaea, AppNexus is also KPEX’s primary monetisation platform and Thompson reveals that the co-op recently ran a RFP process and was hugely impressed with the capability and transparency of the Appnexus platform. “A move to Prebid will enable a more competitive auction and allow our advertisers to reach more users within the platform. We're really excited to be working with AppNexus and together we can accelerate our product roadmap,” says the exec.
How are publisher co-ops different from Facebook and Google?
When asked how do the alliances’ offerings differ from the ‘walled gardens’ of Facebook and Google, as well as the likes of Amazon, Alibaba and Tencent, the three co-ops were quick to state the difference in their offerings.
Rob Bradley, vice president of digital commercial strategy at CNN International Commercial points out that Pangaea provides a very different solution to the market, which is the ability to reach high-quality audiences from over 180 countries in premium environments at just a few price points meets a specific need for programmatic buyers and brands. “This is a unique offering and one that we anticipate even greater demand for as we take Pangaea into its next phase with more tech and data capabilities,” he adds.
KPEX’s Thompson argues that all of those platforms have very different value propositions to each other and KPEX. He stresses that a premium co-op enables the best of the old and the new, highly relevant and engaged audiences within quality environments and as a brand, 'you are the company you keep'.
AdAsia’s Maruyama on the other hand, believes that publishers should have access to the best demand sources and opportunities available to them, including the Japanese market’s reception to PMP deals. “Ultimately, marketers want access to audience identities to optimise their dollar, and any one of these platforms can provide a good view of their audience. Additionally, we often sit down with our publisher partners and provide a good look at how they can best monetize their site to the extent of site set-up analysis and revenue insights,” he says.
“We are always gunning for a win-win situation: where advertisers have access to transparent and brand-safe inventory, along with publishers get maximum revenue from their online assets and premium advertisers.”
Is introducing a universal ID a good idea for co-ops?
With a universal ID, a media buyer can theoretically target their users better across the titles and across different environments. So are the co-ops intending to offer advertisers universal IDs across the different titles, or just sell purely on an audience-based basis?
Pangaea's Bojtos explains that while the alliance looks at a universal ID as a fantastic development, it is not one that it would lead. “We need to see more progress from the industry to unify behind one or two before we can support them but even then, our goal is to provide the environments to find consumers to help drive more value for advertisers and our members. If a universal ID helps buyers find their audiences more effectively, then all the better,” he says.
Maruyama of AdAsia concurs with Bojitos, and opines that in Asia, the region is still some time away from universal IDs replacing cookies. At the same time, he says that cookies can provide publishers with a more controlled way of identifying an audience, especially with the impending GDPR regulations coming into effect.
“Advertisers want to identify audience segments and ultimately users for greater transparency into their buys. At the same time, publishers want to provide advertisers with as much visibility into the audience they are buying into,” he explains. “What we’ll probably see is a compromise with audience data shared across alliance-owned titles, providing advertisers with greater transparency into a transaction.”
Thompson of KPEX shared similar reservations as Maruyama and Bojitos, and adds: “A universal ID would be really useful for us and advertisers in the future and finding an effective solution is something we are wrestling with at the moment.”
Brand safety and transparency
In regards to brand safety, publisher consortiums have historically looked at selling purely on audience, which means that advertisers do not get full transparency over what URL their ad appears on. As not everyone is happy about this, the three alliances were keen to point out that they address this concern in their offerings.
“This is a value exchange, the benefit of an advertiser working with Pangaea is that they can reach audiences at vast scale across multiple publishers, all within the brand-safe premium environment of one of our members,” says Bojitos. “We offer full transparency in terms of campaign performance and metrics such as viewability, where we are well above industry standard and of course buyers can work with third-party solutions such as Integral Ad Science to drill deeper into post-campaign domain placement.”
One of the winners here is PMP deals, adds Maruyama, thus the willingness from both sides to move towards it. “However, what will happen is advertisers will have the access and transparency of PMP deal environments, along with the shared data made available to them,” he says.
“At the same time, ads.txt is now almost mandatory for all publishers in Japan, and even in APAC as a whole. We’re seeing DSPs all over the world requiring publishers to implement ads.txt in order to gain any revenue through programmatic and Asia is no different.”
Thompson meanwhile, underlines KPEX’s opinion that the days of masked URLs are numbered, if not already passed. “Complete URL transparency is a central requirement for brand safety technology to work. Therefore, we have addressed this to date by enabling advertisers to buy fully transparent PMPs within KPEX and as we progress I'm sure we will see more transparency across all exchanges,” he explains.
What newer co-ops should do to succeed
While Pangaea, KPEX and Delta have enjoyed success so far, some publishers co-ops in APAC countries like Thailand, Australia and Indonesia have failed to take off because of differing views and opinions.
However, that has not deterred others from trying in 2018. In Malaysia, Media Prima Group, Star Media Group, Utusan Malaysia, Media Chinese International Limited and The Edge came together to form the Malaysia Premium Publishers Marketplace, while in Singapore, Mediacorp and SPH have joined forces to form a co-op, tentatively named the Singapore Exchange.
Offering her advice to these new co-ops and any upcoming ones on what it takes to succeed, McKinnon of Pangaea says: “A willingness to collaborate; openness about any challenges and shared goals; a desire to make things work and appreciating that whilst big wins may take some time, working together is the best way to change the industry, benefit clients and create a beneficial environment for all to succeed in.”
“There has to be a number of cultural, product and strategy factors in alignment between the members. The fact that Pangaea has been operating for over two years, has worked with leading global advertisers and is now entering a new phase is testament that partnerships can and will succeed with the right approach,” she adds.
Maruyama points to commitment from the highest executive as the key to success. “Having one who truly understands the digital shift, programmatic supply chain and current market trends. Additionally, the executive has to be open to changes in how their ad inventory is sold. This will go a long way in clearing potential roadblocks when entering a co-op,” he says.
While the emergence of more PMPs means ad dollars are set to be even more fiercely competed between co-ops, the three co-ops are unworried by the competition.
On Pangaea’s part, McKinnion asserts that the alliance’s focus has always been its our own business as forging an alliance between global premium partners such as Pangaea has, is no mean feat and this is the vertical that they will focus on. “We welcome more Alliances as it helps buyers understand the value in using them alongside their own direct buys,” she adds.
Maruyama shares McKinnion’s sentiments and adds that alliances are formed mainly to increase the value of publishers’ inventory by selecting the advertisers and controlling the channels to buyers, and the co-ops in these countries will bring additional scale to the publishing houses involved.
“At AdAsia, we want to bring more value to our publisher partners’ inventories through solutions such as traffic quality assurance, and in relation, viewability measurement,” he says. “Additionally, we’re looking forward to help alliances increase their demand channels to premium advertisers and agencies as we’re looking to boost PMP deals across APAC by providing marketers with a transparent and fraud-free trading environment that provides high quality inventory. “
Meanwhile, Thompson states his personal belief that co-ops are absolutely fundamental in creating a sustainable future for premium publishers around the world. “The more co-ops that are established the better and we are offering as much help as we can to enable this. For advertisers a global network of premium co-ops could go a long way to addressing many of the concerns we currently have in digital around environment, brand safety and fraud,” he explains.
The future of co-ops
The years ahead will see more PMPs emerging as publishers are keen to add more value to their demand channels, including audience data such as behavioral, demographic and geographical data and targeting, according to Maruyama.
“One key trend we’re starting to see across APAC’s mature market players is the willingness on both ends in shifting towards PMP deals and we could finally see PMP gain its place in the market,” he explains. “We have seen programmatic become popular in more advanced markets due to the shift of advertisers’ focus from ad placement to user segments.”
Thompson affirms Maruyama’s beliefs, saying: “We have a building body of evidence around the importance of quality environment on performance for advertisers and this will definitely help. In terms of the future, nothing is off the table for KPEX. We will see more advanced data targeting, the launch of self service product for small businesses, an increased focus on video and a push to international inventory amongst others.”
As programmatic matures, there is no doubt that premium co-ops can only be beneficial for Pangaea, Delta, KPEX and other publishers around the world as the renewed focus on brand safety and environment is long overdue, as well as putting the blocks in place to break the Google-Facebook duopoly.