No more low CPMs: Cutting the cord on Google

Dec 13, 2016 at 11:38 pm by Staff


That three of Indonesia's biggest newsmedia companies - reaching more than 23 million smartphone users - have formed a digital consortium might be significant in itself.

But what is more remarkable is that the members of the Premium Indonesian Publisher (PIP) alliance have "pulled the plug" on Google.

Founding members Kompas.com, Merdeka.com and Liputan6.com have turned off Google's AdSense on their mobile home pages, making key inventories available only to PIP and direct clients.

Their move isn't the first - two alliances of French newspaper publishers have cut AdSense from both desktop and mobile sites - but it is being hailed as a necessary step in regaining control of advertising rates.

"It's brave, and the right thing," Pippa Leary, chief executive of Australia's APEX alliance, told GXpress.

Currently Google controls an estimated 80 per cent of digital advertising revenue in Indonesia, a giant market with one of the lowest CPM rates in the world.

Andy Budiman, executive vice director of KompasTV, says the PIP alliance is an effort to increase CPM by keeping premium inventory at premium pricing: "The value of PIP to advertisers is reaching more than 23 million mobile users in brand-safe environment," he says.

"Indonesian publishers, especially the premium ones, feel that we are earning relatively little from our mobile pages due to the very low programmatic CPM in Indonesia."

Four more major publishers are understood to be interested in joining the alliance, and the possibility of forming an Asia-wide group is likely to be on the agenda at a WAN-Ifra-organised forum of chief digital officers next year: "What we know so far is that the alliance needs to be scaled up to include other top publishers and to create more value-added services to advertisers such as narrow targetting based on audience profile," Budiman says.

Technology is also being scaled up, with third party partners Lotame and Krux (DMP), PubMatic and Rubicon Project (SSP) and AppNexus, accessed through PIP's exchange partner Ambient Digital.

Profiling readers according to interests, geo and demographic data would enable the alliance to increase its CPM yield, but already the "flat rate" start is paying dividends. Programmatic ad revenue from June-August was up by an average of 28 per cent on the same period of 2015.

The PIP pitch emphasises the premium sites' differentiation and what international designer Mario Garcia calls the "two tempos" of mobile news media - "a constant flow of information, and edited, art directed packages".

A study last December showed the importance of smartphones in the country with 97 per cent of consumers accessing news that way. And while the time spent on digital (including games, films and music) is more than for any other platform, ad revenue is less than for either print or market leader TV.

While the Indonesian digital advertising market is forecast to grow 39 per cent between 2014-2019, search - controlled by three giant companies - is expected to grow almost fivefold, from IDR1,300 million to IDR6,200 million.

Budiman says that while non-direct programmatic had accounted for 78 per cent of impressions sold on Kompas.com, it yielded only 23 per cent of revenue. Shades of the old 80-20 rule here, with the smaller percentage of directly-sold impressions many times more profitable, but non-direct programmatic is rising (by 37.8 per cent), while direct slowly sinks.



Although others had formed earlier, 2015 was a big year for publishing alliances globally, with the Guardian, the Financial Times and Reuters getting together as Pangaea in the UK - using the Rubicon Project technology platform - and The Economist also providing access to inventory.

General manager Fiona Mckinnon, who is an independent consultant, told GXpress Pangaea sold mobile and a larger proportion of display advertising. With more than 220 million unique users and hundreds of millions of impressions, reach, brand recognition and advertiser appeal is "truly global". Ad tech partners are Rubicon, Appnexus and Krux.

But, she says, "I do not see us as being in direct competition with Google," directing questions on that front to individual members.

Also in the UK is the Association of Online Publishers, which brings Telegraph Media Group, ESI Media, Dennis Publishing, Future Publishing and Time Inc together.

In France, two groups offer agencies a market choice... and most choose both.

An early mover in the market was La Place Media, formed by five partners - TF1 Publicité, Figaro Medias, France Television Publicité, Amaury Médias and Lagardere Publicité - as a joint venture, now accessing more than 250 publishers.

Audience Square is a premium marketplace funded by media groups Les Echos, Express Roularta, Libération, M6 Digital, Le Monde, NextRadioTV, Nouvel Observateur, Le Point, Prisma Média, CCM Benchmark and RTL Net, with more than 100 websites reaching 30 million users a month.

Some of the publishers have cut out Google from both desktop and mobile, and with the two exchanges not competing with each other, agencies book both as the only way of accessing their markets.

Friction between French media sites and Google go back to 2012, when a "tit for tat" dispute saw Google threatening to exclude them from search results if they went ahead with plans to make search engines pay for content. It was apparently settled with an agreement on revenue sharing and the establishment of a 60 million Euros fund to finance digital publishing innovation.

Alliances in Greece, the Czech Republic and Denmark are among a number of others formed as publishers which were once rivals see a much broader set of competitors.

That's not the case in Australia however, where fierce rivalry apparently precludes cooperation between majors News Corp and Fairfax Media. It was not always so: A cooperation initiated when Kim Williams was News' Australian chief executive, was taken apart after his sudden departure.

Currently News has its own private exchange, MBX (for multi-brand exchange), which brings together its digital inventory and that of MCN (which sells the Ten TV network).

Fairfax meanwhile, partners Nine Entertainment in APEX.

Nine had been strongly critical of Google's dominance in the country and the impact it had on advertising margins, with Mark Britt, former chief executive of its Mi9 business once labelling the search giant the "death star".

Cutting Google out is however, a step too far for APEX, despite chief executive Pippa Leary's support for PIP's action in Indonesia, which she says is , "brave, and the right thing".

One place where News and Fairfax do sit down together is industry-owned NewsMediaWorks, which supplemented and then absorbed the established PANPA publishers' association. An initiative has been the creation of the emma (Enhanced Media Metrics Australia) audience survey, operated by Ipsos, and offering targettable audience segments via Eyeota's data marketplace.

New Zealand's Kiwi Premium Advertising Exchange (KPEX) is an alliance between Fairfax Media NZ and NZME - companies which have agreed a merger currently being reviewed by competition regulators - plus MediaWorks and TVNZ, with "extraordinary results" claimed.

All of which sets the scene for forecast huge growth in the Asia Pacific. By way of perspective, the mobile programmatic spend in Australasia is reported to be only one or two per cent, compared to 70 per cent in the US.

We'll leave the modest understatement to Simone Krakowiak, newly-appointed Australia manager for Rubicon Project: "That's a huge gap," she says.

Peter Coleman

Pictured: Andy Budiman

Sections: Digital business

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