Earlier this year, PubMatic released our first mobile whitepaper, “Getting the Most Out of Mobile: 5 Ways to Maximize the Value of Premium Publisher Mobile Ad Inventory.” The infographic below illustrates some of key findings of that report.
Earlier this year, PubMatic released our first mobile whitepaper, “Getting the Most Out of Mobile: 5 Ways to Maximize the Value of Premium Publisher Mobile Ad Inventory.” The infographic below illustrates some of key findings of that report.
Journey to the center of programmatic with PubMatic and discover our predictions for 2015 in PubMatic’s Programmatic Outlook Report. Our team couldn’t be more ecstatic to see PubMatic CEO Rajeev Goel and President Kirk McDonald featured in a cover wrap on the latest issue Advertising Age, celebrating the forthcoming launch of PubMatic’s first Programmatic Outlook Report.
As we move into an era where programmatic is part of nearly every aspect of media, we think it’s our responsibility to pause as 2014 closes and do our best to analyze where this dynamic industry is heading. So reserve your copy of the Programmatic Outlook Report here and find out about our predictions for programmatic in 2015.
Some highlights from our analysis:
As the first day of Advertising Week kicks off here in New York City, announcements are already hitting the web. Of particular note is Adweek’s coverage of Facebook’s new “people-based ad technology” as “marketing nirvana,” driven by the company’s decision to share its deep knowledge of 1.3 billion users in order to power advertising across the web in a way that some marketers are claiming is “unprecedented”—and a shift that some of us in the advertising industry have been keeping a wary eye out for over the past several months.
Back in August, PubMatic CMO Terri Walter encouraged publishers living in the “Age of Facebook” to begin thinking about the data policies and interests of big “media” and “technology” companies like Facebook and Google in a piece in AdExchanger:
“Instead of using content like long-form articles and reportage, recipes and how-to guides to build consumer relationships, these companies use Internet-based services to rapidly grow consumer relationships. But at the end of the day, their business models are as dependent on the buying and selling of advertising as they are on their technology. They’ve entered the publishing game head-on and they’re playing to win.
“To understand this process, look at one of its key drivers: Facebook. The company’s recent earnings report speaks for itself, but just how did it become an emerging advertising juggernaut? Earlier this summer, the social network announced that it will incorporate the anonymous browsing data that it collects on its 1.28 billion users around the globe into its ad-targeting system. This is the advertising system that generated $7 billion in revenue last year, growing 70% year over year in the first quarter of 2014.
“This looks promising and sounds like a great strategy until you pause to consider where all of this tremendously lucrative anonymous browsing data comes from. I won’t keep you guessing: It comes from the very same publishers who lost $7 billion in advertising revenue last year to Facebook.”
And it sounds like publishers have been listening. Last week, the Wall Street Journal published a piece about some of the websites that are becoming wary of Facebook’s tracking software. According to the article, online retailers and publishers like Krux Digital Inc. and Blinds.com are pushing back against Facebook’s effort to track users across the Internet, “fearing that the data it vacuums up to target ads will give the social network too much of an edge.”
As recently as yesterday, Re/code picked up the story with a focus on the ways in which Facebook will use its data to sell ads on non-Facebook websites. According to the article, what may be at stake here is data, not advertising dollars. As Peter Kafka points out, “If Facebook can convince more publishers to let it into their ad business, it’s ultimately going to glean information that will make its own ads, on its own properties, much more powerful.”
“[Search giants use] this data to build user profiles and sell enhanced inventory, competing directly with publishers for digital ad budgets. And here’s the truly incredible part: Publishers seem to be doing very little about any of this. You don’t see anyone removing those Facebook buttons from their sites or choosing to shut out Google.
“Nor do you see anyone raising the question of whether a third party, like Facebook or Google in this context, should profit from data collected on a first-party publisher site without first garnering permission from the publisher. Even media companies that are suing Google in one arena still choose to give their data to Google for advertising. Take the curious example of Yelp, which famously assisted the FTC in an antitrust lawsuit against Google several years ago and is actively engaged in a similar activity in Europe now. Yet by my own estimate, Yelp is one of Google AdX’s largest local advertising partners, turning over inventory and user data to help Google build richer profiles of Internet users that then compete for advertising dollars away from Yelp. And the dance goes on.
“Sadly, none of this is exactly the publishers’ fault. Most of them, even the very big ones, are trying to be as smart as they can, and reckon that there’s little they can do to counter the tech heavyweights’ iron grip on their landscape. But resistance is not futile: Just as Meredith would never dream of turning its audience data over to Condé Nast or NBC sharing its info with Fox, we would do very well if more publishers took notice and realized that tech companies are using their technological advantage to push forward their own media businesses at the expense of their partners.”
As Facebook starts testing its new “people-based” solution, which is said to have audience-based cross-screen measurement, it will surely be a strong foot forward for advertisers who are looking to better attribute cross-screen behavior. However, one has to question what the impact will be on publishers over the long run and what can be done to ensure that the data Facebook is leveraging does more than benefit Facebook’s interests.
 Sloane, Garett. “Facebook’s New People-Based Ad Technology Is ‘Marketing Nirvana’.” Adweek. 29 Sep. 2014. http://www.adweek.com/news/technology/facebooks-new-people-based-ad-technology-marketing-nirvana-160438
 Albergotti, Reed. “Websites Are Wary of Facebook Tracking Software.” The Wall Street Journal. 23 Sep. 2014. http://online.wsj.com/articles/websites-are-wary-of-facebook-tracking-software-1411513056
 Kafka, Peter. “Facebook Will Use Facebook Data to Sell Ads on Sites That Aren’t Facebook.” 28 Sep. 2014. http://recode.net/2014/09/28/facebook-will-facebook-data-to-sell-ads-on-sites-that-arent-facebook
On Thursday, July 3rd, PubMatic was delighted to attend and participate as a Headline Partner at this year’s renowned Association of Online Publishers (AOP) Awards in London. It was without a doubt one of the best AOP award ceremonies yet, as media heads from across the capital came together in their slick tuxedos and elegant cocktail dresses to celebrate the industry’s top performers.
A total of 11 publishers and digital agencies shared the trophies across 18 categories. PubMatic would like to extend a huge congratulations to the following winners:
With just under 700 delegates in attendance, the Roundhouse played host to a full night of entertainment, including British Comedian Josh Widdicombe, who co-presented the awards alongside the evening’s sponsors. The sheer success of the evening’s event was in no small part due to the fantastic sponsors in partnership with the AOP, which included Blinkx Media, Google, Celtra, OpenX, Theorem, Sailthru, SpotXchange, Vibrant, YuMe and of course, PubMatic!
As delegates entered the Roundhouse, they were greeted with superb reception drinks hosted by Blinkx Media and slowly made their way up the blue AOP- and PubMatic- branded staircase to the main hall. Everyone in attendance shared fun photo ops while posing in front of the sponsors’ logo backdrop. PubMatic also played host to a prize drawing that offered select winners a chance for instant champagne delivery to their table. Our lucky winners included the Telegraph and CBS Interactive. As an added bonus, the drawing also included a chance to win an iPad mini, which was awarded to Bryony Drage, from Mail Online! Another huge congratulations from the PubMatic team!
The night’s ceremony kicked off after dessert, and celebrated many individuals and teams across all areas of our industry; from digital marketers to technology providers, the awards were well deserved and celebrated. The AOP Awards shone a light on all sectors of the online landscape, playing home to innovative and forward thinking experts.
As the ceremony drew to an end and the champagne bottles were cleared from the tables, the evening entertainment began with the opening of PubMatic’s VIP bar, bringing together guests from the Telegraph, Dennis Publishing and many more. We were thrilled to create a warm and inviting environment by providing signature VIP drinks and making sure the dance floor was complete. PubMatic’s Bill Swanson, Country Manager, UK, and Laura Fordham, Advertiser Solutions Manager networked throughout the room, sharing laughs and deep conversations until the late hours.
Representing members from this ever-evolving industry, the awards truly do recognise the excellence in online publishing, reflecting the innovation and creativity that traditionally has characterized this fast paced environment. As a longstanding associate member of the AOP, PubMatic rejoiced in accepting the chance to be a headline partner and participate in the celebration of all of the monumental achievements in the media space this year.
As the digital advertising landscape grows more complex and publishers are faced with an increasing number of challenges, we at PubMatic remain focused on being the leading provider of programmatic advertising technology enabling publishers to realize the full potential of their digital assets. As part of that mission, we pride ourselves on providing publishers with a platform with the intelligence needed to drive a holistic revenue strategy across every ad (on an impression-by-impression basis), every screen (desktop, mobile, tablet and video) and every channel (indirect and direct sales).
As part of our ongoing efforts to help publishers succeed in a complicated digital media environment, we are very pleased to announce that PubMatic has appointed Bob Walczak to lead our product development initiatives as the GM & VP of Product from his previous responsibility leading Mobile and Video. As an experienced business leader and former CEO of Ringleader Digital, Walczak brings a wealth of market understanding and relationships to this expanded role, in which he will lead product development and innovation.
Kirk McDonald, PubMatic President, commented on Walczak’s appointment: “Under Bob’s leadership, PubMatic’s mobile business experienced material growth and we launched our video RTB solution for publishers earlier this year. We’re extremely excited for our customers and clients as we are confident that Bob will bring the same dedication, passion and intense drive that helped our emerging media business succeed into this product leadership role.”
Bob’s appointment to this role further signals our commitment to maintaining PubMatic’s leadership position with regard to both product innovation and customer service. By taking a strategic view on market evolution and the expanding role of software automation, we’ve made the investments in people and technology that have driven results for our partners. We see this as one of those investments.
“I’m thrilled and humbled by the opportunity to expand my passion for products beyond mobile and video to focus on the entire business across all solution areas” Walczak commented, “Especially at a company like PubMatic, which has continued to lead the programmatic market in providing innovative software solutions.”
There are many themes in PubMatic’s customer discussions around the globe, but none more critical than innovation and helping our customers navigate between the hype and reality of the advertising technology sector. Every week, publishers are inundated with press releases, white papers and sales calls about why vendor X’s solution to problem Y is the silver bullet to their programmatic revenue strategy. As long term innovators in the programmatic advertising market, PubMatic has always taken a balanced and publisher-centric view of the challenges and opportunities, which has helped us earn a leading place globally among SSPs and exchanges for publishers.
Take the announcement from OpenX yesterday. According to VentureBeat, “OpenX’s groundbreaking new approach represents a major advance over traditional SSPs by truly fusing Real-Time Bidding (RTB) and ad network demand into a single auction, driving up price by increasing competition and maximizing yield for publishers.” OpenX were kind enough to provide a visual explanation of how this works:
As a publisher, this sounds like incredible innovation. Apart from the fact that this technology is more than 4 years old.
So, OpenX, welcome to the party. The one we were having in 2010. Glad to see you are starting to catch up.
In fact, PubMatic launched this version of what we called our Unified Auction in 2010, predicting ad network pricing and combining with real-time pricing from RTB-based buyers to optimize yield for our publisher customers. See our 2010 whitepaper on the topic here (one of the industry’s first exclusively RTB-focused whitepapers).
And over the last two years the market has moved on considerably. In 2010, ad networks were the dominant participants in the yield optimization equation, with RTB-based buying a smaller, but growing component. Fast-forward to 2014 and this dynamic has changed. RTB-based buying from DSPs and ATDs has accelerated and taken market share from the ad networks, reversing the market position of 2010. During this transition, our Unified Auction has calculated about 34 trillion bids on behalf of our publisher customers, with RTB-based buying performing on average at around a 200% improvement over ad networks.
More importantly, other buying models are now critical within our Unified Auction. Private Marketplaces have accelerated over the last 18 months to become a meaningful contribution to a publisher’s monetization strategy. For some publishers, PMPs contribute more than 35% of their programmatic revenue, up from 5% less than 12 months ago. And we now welcome the next buying model with the launch of PubMatic’s Automated Guaranteed, allowing a new set of buyers to participate within the Unified Auction, accessing inventory and audience on a guaranteed impression basis. Our question as we look at OpenX’s “groundbreaking new approach” is how do their publishers access this premium demand and maximize yield when this is absent from their auction?
Publishers are increasingly focused on the programmatic channel, but whilst Automated Guaranteed provides long-term increases in buying efficiency, publishers want to understand relative performance of direct and indirect channels. Launched in 2012, PubMatic’s Decision Manager integrates with a publisher’s ad server, allowing programmatic demand to compete with direct sold campaigns on a real-time basis. The publisher defines when indirect wins in order to ensure that their direct sold campaigns and delivery objectives are satisfied. What’s interesting of course is that when this truly dynamic management of demand is implemented, we of course see dramatic improvements in publisher eCPM across their inventory set, in the range of 30-50% over a period of several months.
To our current and future publisher customers operating their businesses in 2014, please continue to evaluate your technology vendors with care, as all innovation is not what it seems. Have a clear view of your business challenges and opportunities and ask your vendor to be very clear on how they are solving these for you. And if they can’t answer those questions, perhaps you’re speaking to the wrong team.
One of the best things about transitioning from one year to the next is the opportunity to take stock of everything that occurred over the previous 12 months. In newsrooms and living rooms alike, we compile “best-of” lists, pick the year’s winners and losers, sum up trends and predict new ones.
When it comes to the advertising technology industry, the most tempting thing would be to speak in terms of sheer growth: look at the new clients we’ve all signed up; the IPOs that have launched not only individual companies but the industry as a whole to new heights; and the technological advances introduced this year, and you’ve a portrait not only of significant achievements but also of a promising future.
But the numbers tell only half the story. The greatest thing that happened to the industry this year does not appear on anyone’s balance sheet: it is the fact—impossible to prove empirically, but also impossible to deny—that 2013 was the year we finally stopped questioning programmatic.
We stopped because it became obvious. For years, our main challenge was making the case for the merits of programmatic advertising strategies. Our technology, we had to insist, wasn’t a fad. It will benefit advertisers and enhance, not harm, publishers’ abilities to monetize their inventory. It will not, and was not designed to, replace human judgment and human interactions. It will foster new kinds of creativity. Even as our industry blossomed, we still had to begin most business meetings and most interviews with something that sounded a lot like a defense of our very existence.
This past year, due largely to the aforementioned technological and market-size breakthroughs, programmatic has crossed the “If” chasm. From this point on, I suspect, we will no longer be talking about whether programmatic is an advisable strategy, but how best to harness it in the interests of all sides. This is a major shift, and like all major shifts, so too will this one have implications we probably won’t be able to see for years to come. But several changes are likely, and we’d better pay attention to them if we are to start 2014 on the right foot.
For one thing, the complete immersion of programmatic in the publishing cycle means that we are likely to see new and exciting partners entering the fray. With innovative platforms allowing any content provider to target the right audience and offer up the most relevant ads, the very definition of what it means to be a publisher is changing in front of our eyes. From the small magazine that delivers content tailored to its niche readership to the huge corporation that uses its data to provide its customers with specific and highly relevant offerings, we are all publishers now.
That being the case, we need more and better-trained specialists to help us through the process of programmatic adoption. Far from eliminating the need for human expertise, the surge of programmatic has brought people back to the forefront. It will take the best and brightest among us to apply the wisdom and experience of media best practices to the efficiency of algorithms and technology supported workflow. The combination will determine new winners and re-shape the advertising industry in the process. At PubMatic, we call it the Human API, and are confident in the fact that its application is the future.
As we put on our party hats and welcome the New Year, let us take a moment and celebrate the thought that the future looks truly bright, and we are blessed to have a part to play in shaping the outcomes.
Last year, we unveiled “multi-bid,” a forward-thinking protocol that improves performance on the buy and sell-side of the ad ecosystem by increasing the volume of bids in the marketplace. We projected the effects, but now we have the data to prove impact as well as lessons learned. The key takeaway is that multi-bid decreases marketplace frictions, which in turn creates efficiency. Said more dramatically (and while wearing a pocket protector), multi-bid decreases deadweight loss.
First a quick review. How does multi-bid work? PubMatic first sends the bid request to DSPs describing the potential impression and DSPs then respond with multiple bids, each of which has a description for potential creative. PubMatic’s system then evaluates these bids against publisher settings and other bids and selects the winner.
In a multi-bid environment, advertisers and agencies first benefit from increased inventory exposure or access. We saw buyers increase their participation rate by 40-100%. With this increase in participation, we saw a subsequent increase in the buyer’s importance to the publisher’s business: a 115-130% growth in the buyer’s share of the publisher’s advertising revenue.
From the technology provider’s (read: DSP’s) perspective, multi-bid increases response effectiveness and business intelligence. The best efficiency metric that we can measure on behalf of a DSP is its throughput, as defined by media spend/QPS, which grew 10-15%. The primary driver here is an improved win rate, which grew 45-100%. It’s important to note that a growing win-rate does not just deliver short term ROI benefits, but also increases the DSP’s business predictability. While foresight is a critical piece of building business intelligence, another is learning from past experiences; through multi-bid, DSPs have increased their auction results feedback by 30-40%.
With regard to multi-bid, publishers are primarily focused on increased marketplace liquidity. Bid density grew 40-100%, which drove 5-10% growth in fill rates, the end result being a 10-15% increase in publisher advertising revenue. Premium publishers accrued a disproportionate share of value. DSPs used multi-bid to go after higher valued audiences in higher valued contexts, evidenced by a 20-70% price difference between impressions attracting multiple bids and those attracting single bids. Lastly, publishers grew their lost opportunity insights by 30-40%, which is valuable in effectively managing a healthy discretionary revenue channel.
What We Have Learned
How was multi-bid effective? It helped reduce publisher imposed frictions (read: brand controls). In an environment where more bids are available, advertiser blocklists, advertiser category blocks, and even advertiser whitelists could continue delivering strategic value without sacrificing as much revenue. Premium publishers tend to use these brand controls most heavily, and DSPs are aptly concentrating their multi-bid efforts on these high-valued contexts and audiences. Multi-bid value accrues to the industry’s head.
We’ve seen both successful and less successful tactics in avoiding brand control frictions. DSPs should submit a variety of advertisers and advertiser categories in each multi-bid response—in other words, don’t submit multiple bids from the same advertiser and don’t submit multiple bids on behalf of advertisers all from the same vertical, for example.
Multi-bid has proven to be the most efficient means to securing the most valuable content and users. In the absence of multi-bid, a buyer depends on a feedback loop of past actions to achieve future successes. Since publisher brand controls are dynamic, and not always transparent, the aforementioned feedback loops repeat, iterations multiply, and direction forward may not be clear. People and infrastructure costs consequently increase. Multi-bid allows buyers to realize efficiencies ahead of these feedback loops – it’s like learning to fish while eating a salmon dinner.
In conclusion, it’s early days for multi-bidders. It’s still a buyer’s market where early adopters and power users are capturing much of the value created. As adoption and usage continue to grow, we expect to find an efficiency plateau at some point in the future, but we aren’t there yet. Win-rates continue to increase—and do so at an increasing rate—with each additional bid submitted. Said differently, the eradication of deadweight losses is accelerating!
To read more about the advantages of a multi-bid RTB environment, you can download our whitepaper: “The Advantages to Publishers, Advertisers and the Ecosystem of a Multi-Bid RTB Environment (Q4 2012).”
Every time I see another press release about a firm in the media and ad tech space staffing up to prepare for mobile I have to smile to myself. Just this month OpenX hired a bunch of new execs to adapt their desktop technology to mobile, while at their annual summit this month AppNexus announced that they plan to revamp the company around mobile, as founder Brian O’Kelley noted “desktop is dead.”
While I’m glad that there is finally a ton of excitement and development effort going into mobile, it’s more important for our clients to understand the current state of the mobile market. At PubMatic, we’ve got the product and process in place and are making it easier than ever for publishers to monetize mobile. I won’t get into an “our stack is better than theirs” discussion, but I will offer some words of advice about how to approach the unique aspects of the market:
What else do publishers need to know? First and foremost that we’ve created a mobile auction and it’s available now. It increases the performance and competition over mobile with full demand side transparency. We’ve also released an open SDK—essentially a self-serve tool for app providers—that will make our supply that much richer for the demand side. Just this past April, we enhanced our platform with 30 third-party data parameters and up to 20 first-party parameters—10 times more than in desktop—because that’s what mobile demands. By adding the ability to combine first-party, geo, carrier, and device data into the PubMatic platform, publishers can create the premium inventory that sells. We also understand publishers’ fears of maintaining appropriate ads on their mobile content, and we have a custom solution that filters and blocks brands unwanted by the publisher. AdTruth has been integrated for identification and TRUSTe for privacy—all ensuring quality for buyers, sellers and users.
Yes, the mobile ad market is still in its formative days and we have a lot of work to do to increase bid density. But at PubMatic the building blocks of mobile buying and selling are in place and functioning smoothly. Mobile at PubMatic is about the market now as well as what it will be next year—it’s not just a press release or line item on a development plan.
Any parent knows that terrifying moment when the three year old stands up and yells out the F-bomb. It’s entertaining, but pay it too much attention and you’ll just end up encouraging the kid.
That’s the case with the latest outburst from our friend Brian O’Kelley, who suggested in his recent interview, that everyone in the advertising ecosystem has it completely wrong. No one seems to understand the future, and everyone is pursuing a failing strategy. Makes us wonder whatever happened to that old adage about not saying anything if you can’t think of anything nice to say.
We respect the business that Brian has built in display, but his comments were troubling. He basically told publishers to drop dead, declaring them irrelevant and not offering them any real capabilities. We take publisher needs seriously – after all, they own the relationship with the consumer. And we have put our energy towards delivering real mobile solutions to our premium publishing partners. We suppose that if you haven’t successfully built a publisher product with a relevant value proposition, then you might imagine there’s no future in having them as paying customers. We disagree. And as much as we enjoy Brian’s colorful turns of phrase, we hope that he’ll soon bring the same spirited approach and energy to developing mobile offerings.
But hey, it’s the weekend, and as we wind down this week at ad:tech, let’s end it on a good note and say something nice about all the incredible companies that work in this ecosystem. Congratulations to our customers, partners and competitors for continuing to learn and innovate together, and cheers to all those that are committed to making the promise of digital a reality!