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Q&A: Czech Publisher Cooperative CPEx Managing Director Matej Novak

Q&A: Czech Publisher Cooperative CPEx Managing Director Matej Novak

Matej-NovakLast month we announced the launch of the third major European publisher collective to be powered by Rubicon Project.

The Czech Publisher Exchange (CPEx) will offer online advertising inventory from Centrum Holdings, Mafra, Mladá fronta, Ringier Axel Springer, and Sanoma Media Praha, Reaching 70 per cent of the national population.

We spoke to CPEx Managing Director Matej Novak to learn more about the origins of this latest national co-op, the political hurdles it had to overcome, how it protects against the cannibalization of its members’ direct sales, as well as future developments in the pipeline.

What are the origins of CPEx – how did the collective come together?

We first had the idea about a year ago, when we heard about the launch of La Place Media in France. By December, we had begun the process of contacting other publishers. After three months of discussions, we first met together as a group in April and over the next few months agreed our governance structure and what our products would look like.

During our first conversations with fellow publishers, some said it was an impossible venture, others that the project would count as a success if we could even just get some of the publishers to meet up. So I think establishing the co-op in relatively short time really is a great success.

Given that I also work one of CPEx’s members (as Head of Yield Management for Centrum Holdings) as well as setting up and running the co-op, the level of trust that has built up within the group is really impressive.

What is the thinking of Czech publishers in launching CPEx and what do you hope to achieve collectively that you can’t individually?

I would break this down into three points really:

  • Our situation – we all know as publishers that we have to sell via RTB, but in smaller markets like the Czech Republic, as the market scales up, the ROI isn’t there yet for us as individual businesses: we all know it’s important for the future, but for the moment, it’s difficult to make the investment case for hiring the kind of skilled people required, finding the right technology and the right set up etc. Working together through a co-op saves everyone money.
  • The demand is there, and publishers want their share – RTB represents access to new budgets for us, since it’s mostly direct response at this stage in our market, and it’s difficult for premium publishers to compete with Google for these kinds of budgets. Of course, in future we expect branding budgets to flow to this channel too.
  • To face up to global competition (Google, Facebook etc) individually, we are weak. Even if we are competitors as publishers, the value we gain from working together is so great that the compromise is worth it.

How do you protect your members against the cannibalisation of your direct sales?

In open RTB, this works in CPEx in a similar way to how La Place Media does it – with masked URLs. The advertiser gets information on the page category, and the knowledge they are buying premium inventory, but not the individual publisher URL.

To compensate for masking URLs, we need to evangelise and PR the co-op to buyers – but to our advantage, our story – of sometimes fierce competitors coming together for the first time, seems to appeal to the press, and we’ve gotten plenty of coverage.

In addition to this, our high impact ad formats are restricted to private marketplaces only, with just the standard IAB formats available in open RTB.

What role will data play for CPEx?

We are currently considering adopting a data management platform (DMP) – this would, in my opinion move CPEx onto another level. We’ve already done some tests on certain segments, with good results.

When it comes to data, it is our belief that quantity is all important, so adding data to our offering makes a lot of sense.

What’s your view of the current state of the Czech ad market, and how do you see it developing from here?

The Czech ad market is still at a nascent stage in terms of the development of RTB, accounting currently for only about 4 per cent of overall display. The main obstacles to its growth thus far have been the following:

  • A lack of quality inventory available – this is a problem I believe we have solved with the launch of CPEx.
  • A lack of data – with virtually no data available on the market, retargeting is currently really the only option available for audience buying, the problem being that it’s just not very scalable. I believe that our data offering should change this, marking a step change in the amount of data available to buyers in the Czech Republic.
  • A lack of knowledge among clients and agencies – in terms of where RTB and programmatic trading fits into their overall strategy. There is still a lot of work to do around educating the market, and we aim to play our part in that.
  • Only a few tech players on the buy side in market – up to this point, RTB in the Czech Republic has been dominated by ecommerce-based performance marketing – Sociomantic is big, and Adform is well established and has very good support in the market. DoubleClick Bid Manager is also in market, but largely geared towards big multinational clients, but not so much the local Czech advertisers.

I would encourage more DSPs to enter the Czech market – while there may not be huge volumes, there’s currently not high competition either, so there definitely are opportunities.

You have selected Rubicon Project as the technology provider for your co-operative. What were the main reasons?

We have tested five SSPs / ad exchanges during the last year trying to find the best fit for our co-operative plans, so it was not an easy win for Rubicon Project. From all these tests and more than one year of cooperation, Rubicon Project came as the winner mainly for 4 reasons: it offers great monetisation, very good features, outstanding support and has experience with similar co-ops in other European countries.