Canada lays claim to many phenomena as her own: Drake, Justin Bieber, and Casale Media to name a few. The third of those gems is the progenitor of the company we represent today, Index Exchange. Casale Media was founded in Toronto in 2001 and ran until 2014 when we pivoted to Index Exchange. While today we have a global focus with clients distributed throughout the world, Canada remains a crucial and important part of our business.
After the United States, Canada is our second-largest market. The relationships we have with Canadian publishers are entrenched and long-standing – some of our biggest clients in the north include Bell, CBC, and Rogers, plus we power CPAX (the Canadian Premium Audience Exchange), a publisher conglomerate that consists of hundreds of brands.
It’s really interesting to dive into the nuances in the Canadian market – such as the bullishness of private marketplaces, unique approach to seat types, and industry mix of the top buyers. Today we’ll take a look at how Canadian buyers bought in Q2 2016, who bought the most, how they bought it, and what types of inventory they’re after.
Higher CPMs Responsible for Canadian Spend Growth in Q2 2016
Spend increased 46% from Q1 to Q2 2016 in Canada, while the volume of impressions transacted rose 17%. The value of CPMs in the Canadian market is responsible for the discrepancy between these two growth figures – average CPMs rose 25% from Q1 to Q2 2016. We attribute this to a few things: an increase in header tag inventory, more liquidity in the market, and Canadian buyers’ preference for buying premium inventory within private marketplaces.
Canada’s Demand Landscape Dominated by Two Programmatic Loving Industries
Canada’s top ten brand buyers during Q2 2016 were heavily dominated by two industries: automotive and financial services. General Motors, Honda, Nissan, Toyota, and local Toyota dealers all broke the top ten, representing auto, while CIBC, TD Bank, and Scotia Bank held it down for financial services. This is emblematic of what we see in Canada quarter over quarter; auto and financial services dominate in Canada when a look at the global and United States’ market there is a bit more industry diversity in the top ten.
The table below depicts how the biggest brand buyers during Q2 2016 approached impression volume and CPMs. Remember how automotive and financial services dominated in the top ten? Well the two brands that don’t fit into that category, CPG giants Mondelez (formerly Kraft) and Unilever, bought the most valuable inventory by a long shot. Mondelez had the highest average CPMs of the top ten buyers with Unilever close behind. The conclusions one can draw from this are many: perhaps CPG buyers have access to more data to target with greater precision or maybe it comes down to a private marketplace vs. open marketplace distinction – CPG buyers consistently gravitate to private marketplaces in order to reach niche demographics. Likely it’s a combination of both – CPG buyers utilise their massive stores of data to find the right audiences, reach them in private marketplaces, and have done the math to validate paying more for said impressions is worth their while.
Who’s Hands Are On Canadian Keyboards?
Seat type is a very telling figure to examine. It shows how buyers are accessing publisher inventory and who has the hands-on the keyboard actually making the buy. Canada proved itself unique here, yet again, with its high concentration of agency representation. Over half of all Canadian spend during Q2 2016 flowed through agency hands – 41% from trading desks and 22% through agencies. This is unique – globally, managed services/networks dominate, while in Canada managed services and networks direct 20% of Canadian wide spend. (See below for the biggest trading desk, agency, and managed services spenders in the Canadian market.)
Tag-Based Spend Still Reigns, Though Header Grows At Nice Clip
Unlike the case globally, in the United States, and in the United Kingdom, Canada still sees the majority of inventory sold through tag-based integrations, though header tag has grown substantially since the beginning of the year. As many of our legacy relationships in Canada pivot to header-based selling, we expect header tag will overtake tag-based spend by the end of 2016. For a look at the relationship between the two, see the graph below.