Having worked in, and led, a number of online media businesses in the UK, I had expected my move to New Zealand would be a step backwards in programmatic maturity. Online marketers in the US and UK have a long-held opinion they are ahead of the world in technology, spend and planning sophistication. This is somewhat true. However, technological leadership comes with a big cost: complexity. A quick glance at the display market LUMAscape illustrates just how complicated programmatic media buying has become. With so many companies all offering largely similar services, the global industry has gained a reputation for ad fraud, disappointing performance, and unnecessary costs that steal margins away from both publishers and advertisers.
I arrived in Auckland in August as the new CEO at KPEX (Kiwi Premium Exchange). It was immediately clear to me that programmatic media is a much simpler industry in New Zealand, but this offers significant benefits to local businesses. Only the winners from other regions are likely to invest in New Zealand, so the best technology is pre-selected for us. Less choice allows those companies to gain greater scale and provide superior local support than would be possible in a highly fragmented market like the UK. And there’s less temptation to succumb to the appealing Powerpoint sales pitch from the latest new tech startup that in reality would add marginal incremental value.
KPEX is a great example of how a smaller market can lead the world. KPEX was founded in 2015 as a consortium owned by New Zealand’s four largest media companies – NZME, TVNZ, Stuff and MediaWorks – to be their official programmatic sales channel. The creation of KPEX made it easy for advertisers to access the brand safe environments and scaled audiences across all these media giants’ sites through a single programmatic access point. Today, KPEX is New Zealand’s second largest online media platform (after Google). Other publisher consortiums have been attempted elsewhere in the world, but none include all the top local media companies and many have failed because they couldn’t gain sufficient scale or figure out how to get long-established competitors to collaborate for their collective benefit.
As in other countries, brand safety and ad fraud have become increasingly important for media buyers in New Zealand over the last year due to a number of high profile fails and moves by large advertisers like P&G and Unilever to tighten up the industry. Brands have finally (and correctly) decided they won’t accept their ads being placed next to unscrupulous or unsavoury content, and they are no longer willing to pay for ads that are never actually seen by a human. Given the first ad exchanges were launched ten years ago, I’m surprised it has taken this long for marketers to reach this point.
Fortunately, in New Zealand local content consumption is concentrated within relatively few premium media companies so it is easier for advertisers to reach their audiences within environments where content is curated by professional editorial teams and the risk from ad fraud is reduced. Again, this provides New Zealand with a big advantage over larger, much more fragmented markets.
Privacy has also been a topic of much discussion in 2018. The European Union’s GDPR law has forced companies worldwide to tighten up their data management, helping to eliminate some of the poor practices that have tarnished programmatic media’s reputation in the past. In New Zealand, the new Privacy Bill currently working its way through Parliament will better align our local privacy regulations with GDPR and other international data protection laws. As a consequence, data quality should improve, leading to better results from campaigns that use audience targeting.
There is one area where programmatic media in New Zealand faces a challenge not experienced in most other countries: overall audience scale. Our limited population means that campaigns run with frequency caps often fail to exhaust their budget. Coming from the UK, this was a problem I had rarely encountered before. Unfortunately, technology can’t solve the problem of too few inhabitants. We just need to encourage more people to enjoy the excellent online content published in New Zealand, and ensure brands focus on what is likely to make the biggest impact on their campaigns’ performance – impactful adverts in prominent placements.
- Simon Birkenhead is KPEX's CEO. He joined the organisation in May 2018.