KPEX (Kiwi Premium Advertising Exchange) is an extraordinary example of what is possible in a small advertising market when traditional media businesses work together to address the shift of agency spend from media buyers to their trading desks.

Launched as a joint venture by New Zealand’s four largest media companies (NZME, Fairfax Media, TVNZ, and Mediaworks) in November 2015, KPEX currently accounts for a little under a quarter of all New Zealand agency trading desk spend.

This rapid growth has been driven by three simple principles the partners have adhered to from day one.

1. KPEX is bought blind (all advertisers see kpex.co.nz, not individual Web sites). This aggregates a huge pool of unique audiences and ad impressions into a single buying destination.

This is an important difference from many publisher alliances around the world. It squarely addresses buyer claims to “only be after audiences” while also ensuring that participating publishers are able to present the market with a cohesive solution for buying unguaranteed programmatic inventory.

The structure of KPEX better positions publishers’ unique and highly effective ad offerings, while publisher first-party data lets buyers more effectively target specific audiences.
The structure of KPEX better positions publishers’ unique and highly effective ad offerings, while publisher first-party data lets buyers more effectively target specific audiences.

2. All inventory supplied to the exchange is from New Zealand premium publishers who already ensure they only supply quality impressions to advertisers and who have highly engaged audiences.

This results in substantially higher viewability rates compared with other exchanges, and superior performance for advertisers against CPC (cost per click), CPL (cost per lead), and CPA (cost per acquisition) measures.

Five other publishers have joined as inventory partners since launch with several more due to join over the coming few months. All have quality audiences and premium, New Zealand focused content.

Most importantly, all partners are committed to supply all unsold inventory to the exchange. If an impression is not required by a campaign sold by the sales team, it is passed to KPEX to monetise.

KPEX then passes it through a hierarchy of private marketplaces (PMPs), open exchange, and finally to AdX. If still unsold, the inventory is passed back to the publisher and can only be used for house advertising. This “stacking” preserves the value of guaranteed, direct-sold inventory, while ensuring there is a single, scaled solution for buying non-guaranteed inventory from premium publishers.

3. KPEX has a mission to constantly improve the platform for both buyers and publishers. This ranges from building custom audience PMPs for trading desks to offering a comprehensive data solution for publishers.

KPEX had invested in a data management platform that enables all partners and inventory suppliers to provide their first-party data into sophisticated “blended” audience segments. This enables buyers to target specific audiences built from all publisher first-party data, against all ad inventory inside KPEX.

Data owners are paid for their data points and inventory owners for their impressions. This solves the sub-scale inventory/data problem many publishers suffer from when attempting to compete with data giants like Google and Facebook, while offering superior data points to buyers than they would be able to purchase from third-party data suppliers.

It means that publishers with highly valuable, niche audiences but a limited numbers of impressions can generate revenue across large publishers’ inventory pools, while large publishers can generate higher cost per thousand, due to the data attached to their previously anonymous audiences.

While it is still early days for KPEX, we have shown that buyers’ and publishers’ objectives are more closely aligned than many would believe. Both believe safe, high-quality inventory in a single, at-scale location will deliver the best outcome for advertisers.

As KPEX extends the range of products on offer (currently standard display and pre-roll video) into data-enhanced audiences, and soon native advertising, that proposition will become even more compelling for advertisers and their agencies.