First announced in August 2017, the Singapore Media Exchange (SMX), a publisher co-op jointly formed by both Mediacorp and Singapore Press Holdings goes live today as both publishers look to revive their sluggish traditional advertising revenues.
SMX will follow the path of existing programmatic private marketplaces (PMP) around the world like the Pangaea Alliance, DELTA Alliance, Kiwi Premium Advertising Exchange (KPEX) and Malaysia Premium Publishers Marketplace to fight the monopolisation of advertising dollars by digital giants Facebook and Google by sharing advertising inventory and selling to buyers or group of buyers.
AppNexus will be SMX’s primary monetisation platform, on top of already being a prebid partner for header bidding for Pangaea and KPEX, while Lotame will work on audience data for the co-op.
The decision to go with Appnexus and Lotame was made after a six-month selection procedure that included most of the leading names in the space. KPEX’s decision to drop The Rubicon Project for AppNexus, as well as Lotame’s existing work with both Mediacorp and SPH were deciding factors for the decision makers.
SMX will also be fully compliant with local privacy regulations, like the Singapore Personal Data Protection Act. For GDPR, it is currently working with its lawyers to ensure compliance with the applicable requirements before the May 25 deadline.
Speaking to The Drum ahead of the official launch, Hari Shankar, the newly-appointed chief executive of SMX was keen to stress the co-op is very different from the other alliances both from a market, as well as a platform perspective.
That is because Singapore is likely the only market where two large publishers can pool in their audiences to achieve a 75% reach, says Shankar, and has an environment where little education is required around the quality of inventory offered by both the publishers and its partners.
In addition, Shankar explains that the go-to-market health of the SMX product is in a much better shape than any other alliance, because of the involvement of just two partners now, compared to having multiple partners combined to a single platform. This has enabled a much cleaner build of the platform both from an inventory and unified first party data perspective.
“SMX is an equity joint venture between the two media giants, unlike any other consortium, with very clearly drawn out business plans as well as road map in addition to a very strong governance. Both shareholders are equally and fully vested in making SMX a success, including the rules of engagement between the parent organisations and SMX - what SMX will sell and what it will not - which is not typical of most of the alliances quoted here,” explains Shankar.
“This helps not have too many cooks with probably conflicting strategies, have a strong or exclusive representation for the alliance (i.e. avoid the back-door syndrome), partners not being complementary in their strengths and lastly, the inability to scale quickly enough to become a credible player. In short, there has been enough background work done to collect learning from co-ops that worked and those that did not.”
Shankar, a media veteran who has spent a large part of his career in the holding networks like Havas, WPP’s Mindshare and Publicis-owned Performics, also points out that co-ops tend to be geo-specific and does not necessarily collide with each other. “This could mean that there is potential for a much larger regional super co-op at some point of time in the future rooted on the solid foundation laid by those who hit upon successful models in the region,” he says.
SMX versus Walled Gardens
The exec took pains to avoid comparing SMX’s offerings to Google and Facebook, as well as the likes of Amazon and BAT (Baidu, Alibaba and Tencent).
“To begin with, we would not compare ourselves with Google or Facebook because those are very different environments compared to SMX in my view. What we are setting out to achieve here is to provide a premium, brand safe, quality programmatic alternative to buyers while at the same time also focusing on scale, precision and innovation,” he says. “We believe we have what it takes to deliver on this promise because we already reach three out of four people online in Singapore while also being able to drive accuracy via our unified first party data set from both Mediacorp-SPH.”
Shankar adds that he strongly believes that the quantum of curated, quality local content that SMX brings to the table through all properties that are part of SMX, is ‘unparalleled’ in the market. He also points out, at the same time, SMX has a go-to-market first party data offering (19M cookie strong), which is just the baseline product with a lot more enrichment on the way.
“In short, our biggest differentiation versus that walled gardens are being able to provide premium, brand-safe inventory at a significant scale in Singapore. This is reinforced by the rich data offering and innovative products we will bring to market on a single, unified fuss-free platform,” he explains.
Advertising ID consortium
SMX will be one of the first strategic partners of the advertising ID consortium, founded by AppNexus, Index Exchange, and LiveRamp, when it launches in the Asia Pacific region. The consortium aims to drive the adoption of a unified and open identity solution so that buyers and sellers of programmatic advertising can deliver more relevant campaigns.
At launch, SMX will offer first party audience data like interest, demographics and intent, unified into a single identifier through its data management platform, which means it is in a position to activate things like intent or behavioral data coming in from both Mediacorp and SPH.
While Shankar admits that SMX does not have data that is on a ‘people marketing’ level yet, he says it is on the co-op’s road map potentially within 2018, as SMX is driven by a global partnership that will enable it to target individuals via an open ad identifier initiative to buyers.
For now, we will be layering our own first party data behavioral, demo and intent data over SMX inventory. Soon we will be able to offer valuable people-based id targeting to buyers in the market,” he says. “Do we sell individual properties within the Mediacorp-SPH roster? At least not for now, as we are a premium exchange providing premium vertical environments like Travel, News, business etc with valuable data layered over it rooted in custom requirements of buyers.”
Being brand safe and transparent with advertisers
Like its counterparts, SMX will sell purely on audience, denying advertisers a chance to get full transparency over what URL their ad appears on. Shankar defends this move but is quick to add that SMX will never be fixated in its approach and is always open to relooking at its strategy to adapt to the changing market needs.
For example, SMX has a multi-screening capability that enables advertisers to synchronise their programmatic buys real-time with TV event triggers. The ad sync feature leverages the strengths of Mediacorp’s TV reach to drive online-offline integrated marketing synergies.
“Why we are not selling individual web properties/ URLs via PMP deals? I would say that the dynamics and business environment we have, sort of voids the need for selling individual URLs. Take the example of ‘SMX Business package’, where firstly it does not take a lot for the buyer to understand which websites are being packaged into the bundle and secondly there would be explicit mention of the group of URLs that form part of this bundle as well. Publisher consortiums in other geographies have not had this sort of a business environment (or dynamics in play) to the best of my knowledge and any concerns around transparency have stemmed purely out of this,” he explains.
“Coming to the audience data question, the data we have is very unique in the sense that the group of behaviours / intent that are being bundled into a single ID is not available anywhere else in the market - not even with Mediacorp and SPH - which means that the buyers get a double whammy of superior and trust-worthy sites bundled into packages coupled with superior data sets guaranteed to deliver results. I believe this is what the market needs today and there should not be so much stigma around us not being able to offer individual URLs per se,” Shankar adds.
What will be the measurement of success for SMX?
The very first sign of success would be around how SMX is able to ramp up the core business which revolves around retaining OpenRTB market share while aggressively pushing the PMP agenda, says Shankar.
That means SMX will grade itself based on how fast the market embraces the PMP, especially via uptake on PMPs and private auctions where advertisers take full advantage of the data on offer, allowing itself to accumulate as many successful great case studies and outcomes for clients as possible during the initial run, while not losing sight of the deadlines in terms of a breakeven scenario.
“My own personal target would be to look at such a scenario in 12 months of operations while sprucing up the product and delivery for addressing our larger ambitions for year two and beyond. I believe that the traction that we will gain during year one will automatically attract more premium publishers to join SMX and thus bring a much deeper and broader layer of data enrichment, in addition to our own initiatives to acquire premium intent or ecommerce data through strategic partnerships,” says Shankar.
“I see ourselves growing out of what we are now - from both a geo perspective as well as publisher partner perspective - while adding newer and more innovative products like programmatic TV, radio etc, to our offering. From a broader perspective, we also see ourselves driving as much transparency as we can with advertisers and brands alike with the objective of driving maximum ROI for our advertisers and clients.”