Nine and Fairfax to launch APEX premium mobile exchange as MCN walks away



Publishers Nine Entertainment and Fairfax Media will today announce the launch of a premium programmatic exchange for mobile ad inventory, called the Australian Premium Exchange (APEX), as the two publishers seek to try to curtail the growing power of the likes of Google and Facebook in online advertising space.

Mumbrella understands that the mobile exchange move is a first step, with ambitions for APEX to eventually include desktop ad inventory as well.

APEX was originally conceived as a joint venture between Nine and Fairfax, with the Multi Channel Network (MCN) being brought in around the middle of the year. However, the pay-TV sales house is understood to have walked away from the exchange within the last fortnight, ahead the formal announcement expected later today.

Chief operating officer of Nine’s digital division Mi9 Marc Barnett told Mumbrella APEX was not just about working with the remains of the previous attempt for a publisher’s exchange: “This is not pulling together what was left (of the premium publisher’s exchange). We have been big supporters of this concept for two and half years now and continue to believe its a good thing for the industry and for the publishers who contribute to it.”

APEX and Fairfax both declined to comment on MCN’s last minute withdrawal, while over the weekend MCN sought to play down its involvement telling Mumbrella that it had only been involved in the “early stages” of negotiations.

“MCN was never part of this exchange, so the idea that MCN has ‘pulled out of the exchange’ is a nonsense. MCN was involved in early discussions, but nothing further,” said Anthony Fitzgerald of CEO of MCN.

The new exchange will launch in February 2015 and be run on AppNexus technology and will include both Fairfax and Nine’s digital properties along with Mi9 joint venture offshoot Daily Mail Australia. It will be headed by former Fairfax director of strategy Pippa Leary, who led negotiations on the previous publisher’s exchange.

The Publisher’s desktop exchange was announced in early 2013, but collapsed in February after Yahoo!7 and then News Corp Australia withdrew from the negotiations.

“There have obviously been talks with a number of publishers over a period of time about their participation or not,” said Barnett, who will serve as chairman of the new exchange. “In the end we are launching with us (Mi9) and Fairfax and the Daily Mail inventory will be included within that.”

Asked to comment on the reasons for MCN’s withdrawal, shortly before launch Barnett said: “We are more than open to any other premium publishers who fit the definition and we have talked to a lot of those partners and those talks will remain ongoing and we remain hopeful that will be able to add additional partners between now and the launch date. “

He also confirmed that while the initial launch will just be mobile inventory APEX will eventually include both mobile and desktop and that they remain open to other premium publishers joining the exchange.

“The initial launch is just mobile,” he said. “But both us and Fairfax are still very open to moving forward into the desktop phase, but from a launch perspective it will go live with mobile.

“We have said from day one we are 100 per cent open to any publishers that meet the criteria, being of a premium nature and produce content for a local audience, who want to participate.”

Australia is not the first country to launch a publisher exchange with Barnett arguing there were benefits in terms of the cost per impression (CPM) and also making available unsold ad inventory to media agencies and their clients.

“The example we have seen in other markets for the types of audiences we are offering show that when premium publishers come together there are two benefits: there is the long tail — which brings scale, size and heft, and then on the premium nature of things you have the quality of the content but not always enough volume,” he said.

“Publishers coming together in this publisher’s exchange gives you the best of both worlds. You have the scale to compete with the likes of Google but you have the premium nature of it.”

Barnett, who has worked as a programmatic specialist for Microsoft and Mi9 across Australia and Asia, argued the exchange was important in terms of finding a way to combat the likes of Google’s programatic buying offering and wrest precious ad dollars from the search giant.

“I think this is important not just for the publishers but for the industry,” he said. “I think a world where advertising becomes buying the cheapest possible inventory with no environment and no context is a world that’s not good for advertisers and is certainly not a world that is good for consumers.

“The premium publishers are the ones who are creating content for audiences in Australia and if advertising goes down the commoditisation path then at some point at the end of that path people will no longer be spending money creating content if there is no value in it.”

Mi9’s COO argued that the likes of Facebook and Google were increasingly creating an environment where the business model of premium online news websites and content providers is challenged and that this required the publishers to work together.

“The ad funded model, where the public gets that ad funded content free, relies on a certain amount of yield coming in and competing with these global businesses that continue to avoid tax, continue to not produce local content and continue to drive the price down through their scale. And I don’t think it is beneficial to anybody in that ecosystem,” he said.

“Our view is that this play isn’t about publishers increasing their yield it is about allowing advertisers and agencies to connect in a seamless way to create a bunch of efficiencies but also to improve the advertising industry as a whole.”

Nic Christensen 


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