PHDiQ's Christophe Spencer weighs up the strengths and weaknesses of KPEX

  • Opinion
  • April 11, 2016
  • Christophe Spencer
PHDiQ's Christophe Spencer weighs up the strengths and weaknesses of KPEX

KTKPEX, a joint venture between NZME, TVNZ, MediaWorks and Fairfax to help sell their inventory programmatically, was launched in November 2015.  

The launch took the industry by surprise in some ways given how quickly the alliance between four major and competing media groups came together. While similar alliances had been forged in France, Australia and the UK, these were typically years in the making. Furthermore, politics between the parties involved often led to a ‘watered down’ proposition being brought to market.  

A unique feature of KPEX is that MediaWorks, TVNZ, Fairfax and NZME are able to monetise their unsold advertising space at lower rates without impacting on their direct sales efforts. This is achieved through passing their unsold inventory into KPEX on an aggregated basis. The upside to advertisers being that they can benefit from lower rates, the downside being they are unable to target their ads to specific media partners or URLs within KPEX. 

This (unavoidable) lack of URL transparency has been a slight limitation of the KPEX proposition. Whilst KPEX is allowing advertisers to tap into a significant supply of cost effective, ‘premium’ inventory, the exact definition of ‘premium’ is open to debate, and there will always be sites or specific editorial across these four partners that a brand may not necessarily want to be associated with. Given the breadth of editorial across these four key partners, the ability to target ads into specific URLs would allow advertisers to better ensure advertising is served to the most appropriate audiences, and help them get better results.

In spite of these challenges, the ability for KPEX to provide a simplified proposition for media agency trading desks has been one of the key benefits seen so far. While all four key media groups had previously made some of their inventory available programmatically, the process of setting up private exchanges in order to access it could at times be challenging.  Online advertising impressions would effectively go through a Krypton-Factor like obstacle course to pass from a publisher’s supply side platform, to an ad exchange and finally to an agency’s demand side platform. The way in which KPEX allows advertisers to simplify some of this process has naturally been welcomed by the industry.

The KPEX alliance is also helping advertisers to access greater amounts of local media inventory within their programmatic campaigns. KPEX has not disclosed the full amount of inventory it is making available via the four partners, however Doubleclick estimates show a significant increase in the number of impressions these publishers are now making available programmatically. Whilst the offering is predominantly ‘display’ led, a number of new ‘high impact’ formats are being brought into the KPEX offering.

The next major opportunity for KPEX is to integrate publisher first party data into their platform. Each publisher holds a wealth of demographic and behavioural data about their users. If this data could be aggregated and used to help target advertising across all four publisher partners, this would provide KPEX with a very compelling point of difference. 

In summary, the launch of a unified programmatic offering from MediaWorks, Fairfax, TVNZ and NZME has been a significant step forward for the local market, and is offering strong benefits for both agencies and advertisers alike.
It will no doubt see greater programmatic investment going towards local media partners in 2016. The challenge for KPEX will be to keep pace with a rapidly evolving programmatic landscape (currently dominated by both Google and Facebook) and the increasing demands from media buyers for transparency in this space. 

Christophe Spencer is the head of digital planning at PHDIQ.

  • This article first appeared in the January/February edition of NZ Marketing magazine.

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