Broadcasters partner in digital ad exchange to take on Facebook, Google

A new real-time, online advertising bidding service allows Canadian broadcasters to offer unsold display space, receive bids and display the ads in a process that takes about 100 milliseconds, said CBC/Radio-Canada, a partner in the service. The platform is called the Canadian Premium Audience Exchange, or CPAX, and is a partnership between CBC, Corus Entertainment Inc., Shaw Communications Inc. subsidiary Shaw Media, and Rogers Communications Inc. subsidiary Rogers Media. The companies said the new platform will help broadcasters generate additional revenues from their online platforms and compete with online advertising giants Facebook Inc., Google Inc., and other ad exchanges. In an email to The Wire Report, Jon de la Mothe, director of media innovation and technology at CBC, said broadcasters offer their unsold display ad inventory directly through the online exchange. De la Mothe said advertisers bid on individual ad impressions in real time, which are “awarded to the highest bidder and their advertising creative is immediately displayed on the broadcaster’s website.” The ads are targeted to locations and the types of websites visited. De la Mothe said the entire bidding and display process happens in about 100 milliseconds. Using IP addresses, companies can track how users navigate their online platforms. Advertisers are presented with information that helps them meet the needs and desires of users visiting the websites. “The holy grail of generating revenue based on online advertising is understanding who’s out there and matching advertisements to their wants and needs,” independent technology analyst Carmi Levy said in a phone interview. He said targeted services like these online ad networks tend to offer better results for advertisers than mass marketing. “It’s all about collecting information about who’s visiting and serving up a very precisely targeted advertising experience, which research shows advertisers will pay specifically for,” he said. Paul Burns, vice-president of digital media for Shaw Media, said in an interview that the service allows advertisers to log in, see the broadcasters’ inventory across a collective 150 web domains, and make a bid. “They can make bids on The Food Network , or any number of properties in real time,” Burns said. “Then if they win the bid, their ad gets placed.” Burns said CPAX is different than competitors like Google and Facebook because it lets the advertiser decide where the ad will appear. He said advertisers like reaching a mass online audience through ad exchanges but often have concerns about where the ad will be placed. “Having your brand show up on sites that you don’t want your brand to show up on, kind of the gutter sites of the Internet, is not very comforting for brand managers and media buyers,” he said. De la Mothe said CPAX is more competitive with online ad networks that have traditionally represented unsold ad inventory. “With CPAX, our buyers can be certain their advertising messages will run within premium content, and through a single bid, they can access more than 16 million Canadians,” he said. Levy said it will be difficult for the companies to compete with Google, which is the “gold standard” for this type of service. “They convert these activities into revenue more effectively, more efficiently and more ruthlessly than any other company on the face of the Earth,” he said. The companies could benefit from partnering with Google for such a service, Levy said, though by going about it independently they have “more precise control” over the content delivered to users on their sites. “Basically, what they’re doing is tearing a page from Google’s playbook, but they’re running with it on their own,” Levy said. “They don’t want to share with Google.” Corby Fine, senior director and general manager of audience solutions and business development at Rogers Media, said in an interview that Rogers is putting its network of Canadian websites as well as some of its exclusive U.S. partner sites through CPAX. Burns said Shaw, CBC, Rogers and Corus wanted to pool their online inventory to allow buyers to bid on available ad space from one spot. “We’re incredibly pleased with the response from the market and, as well, the general flow through the inventory is above what we originally expected,” he said. De la Mothe said the new platform does not extend to online video advertising. Burns said allowing media buyers and brand managers easier access to ad space will generate more revenues for the Canadian broadcasters. De la Mothe said he could not disclose how much revenue the service has generated for CBC so far, but said since CPAX’s launch in May, “we have more than doubled the amount of inventory sold and we are expecting aggressive growth to continue.” Fine said the exchange model is designed to be an alternate revenue stream for Rogers’ advertising inventory. In terms of Rogers’ initial expectations for the platform, he said, “we’re well ahead of where we thought we would be.” Fine said that the move to real time bidding “is something that both sides of the ecosystem are looking at with a lot of excitement and interest.” Both CBC and Shaw said the broadcasters behind CPAX do not intend to lobby the government to expand the federal advertising tax credit under section 19.1 of the Income Tax Act—which now applies to Canadian newspapers and broadcasters—so that it also applies to Canadian digital media companies. Fine said he was not in a position to comment on the topic. In 2010, Corus told the House of Commons heritage committee that the federal government should amend the Income Tax Act to encourage Canadian advertising dollars to flow to Canadian-owned digital media properties. Gary Maavara, executive vice-president and general counsel at Corus, said at the December 2010 meeting that section 19.1 of the Income Tax Act should be applied to digital media, which would “result in making advertising expensive on foreign sites in the same way as it works for Canadian television.” dgrenier@thewirereport.ca -- CORRECTION: An earlier version of the story reported an incorrect version of the Canadian Premium Audience Exchange's name. That version also incorrectly identified Corby Fine's title at Rogers Media.

Broadcasters partner in digital ad exchange to take on Facebook, Google

Broadcast | August 10, 2012

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Broadcasters partner in digital ad exchange to take on Facebook, Google

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