Agencies place their bids as MSN NZ’s ad exchange reels in the digital punters

MSN NZ announced a few big changes to its business last year, including the launch of real-time bidding (RTB) system Microsoft Advertising Exchange, something akin to a media stockmarket that allowed advertisers and publishers to buy and sell digital inventory. And the bet seems to have paid off, with MSN reporting significant local uptake of the system and a big recent increase in revenue. 

Until 2011 there was no local ad exchange for premium online advertising in New Zealand, yet in overseas markets they captured upwards of 40 percent of online ad spend. Reckoning whoever moved first in New Zealand stood to lead a fast-emerging industry buying shift, MSN launched the service and there are now 142 Demand Side Platforms (systems like Brandscreen, Invite Media and Criteo that allow agencies to manage exchange bidding and overlay customer data) bidding on behalf of 800-plus advertisers.

MSN general manager Liz Fraser says the Microsoft Advertising Exchange is currently generating five-figure revenues, and that has grown 60 percent from March to April.

“The opportunity to bid on premium local inventory, which is overlaid with the advertiser’s own data profiling consumers, is a step-change for advertisers,” she says.

Fraser says a significant chunk of the buying was re-targeting (where consumers are targeted with advertising based on pages they’ve recently visited) and that advertisers were tagging sites to capture more data to support better targeting.

Back in 2011 when this was announced, Fraser said the exchange was not really aiming to compete with the ad networks like AdHub, 3DI and TPN and said it was taking on Google’s Double Click Ad Exchange by selling the inventory, including display inventory across Windows Live, under the new Mi9 corporate umbrella (in addition to msn.co.nz and Windows Live Hotmail, and Messenger, it comprises more than 40 brands including Bing, Skype, Xbox, MSDR performance advertising network, and large third-party sites, including Ticketek, Hoyts, Menumania and Everybody).

Ryf Quail, general manager of Zenith Optimedia, an early adopter of Microsoft Ad Exchange, says it is simply another vehicle to reach consumers and complemented premium digital media buying.

“Digital advertising can serve many purposes, whereas other channels are more singularly purposed,” he says. “Consequently, planning digital media investment is more challenging. Premium, or context-based, advertising provides deeper branding engagement, but narrower reach. On the other hand, an Ad Exchange can reach a large chunk of a target audience based on a set of behaviours,” he said. “The two work together, with the incremental reach of behavioural buys complementing contextual, or premium, advertising.”

Using the example of a baking ingredient—considered part of the low involvement FMCG category—Quail said a combined approach might include premium-based sponsorship within a recipe environment, providing strong contextual relevance, with Ad Exchange buying targeting household shoppers who, based on previous web behaviour, had shown an interest in the product.

“The beauty is you can target behaviours, which is a quick way to convert low hanging fruit,” he says.

He says better definitions of overall campaign success were required to refine buying and campaign execution formats and creative agencies and media buyers need a shared understanding of campaign success and measurement.

“Once you know measures of success then the role of premium and performance buys becomes clearer and creative can be made to measure. Planners know all about metrics, but there must be wider acceptance of what success looks like and the critical metrics versus those in support,” Quail says. “A great idea delivering a great result is about delivering a great idea into the right spaces.”

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