The Mechanics of Automated Guaranteed & Private Marketplace Guaranteed

Eric Mischel, Senior Director of Product Management

By Eric Mischel, Vice President of Product Management – Business Apps, PubMatic

There are two main issues driving advertisers and publishers to adopt automated guaranteed (AG) and private marketplace guaranteed (PMP-G) solutions today: first, the desire to improve return on ad spend (ROAS) using data-driven decision-making; and second, the desire to improve margins by increasing efficiency. From a technical perspective, AG and  PMP-G serve as the foundation for many of the programmatic direct products that are being introduced into the market in 2017.

Automating the process of pushing deals over from a publisher’s direct sales team into its ad server has been going on for nearly ten years. But now, this process is shifting from internal publisher workflow tools (remember DART Sales Manager and Solbright, anyone?) to workflows that give buyers more of a self-service automated direct sales model.

This is similar to the disruption we’ve witnessed in the finance industry introduced by tools like E*TRADE that allow individuals to open accounts and day trade for themselves. No longer do we need to call up a stockbroker to discuss what we want to do. We don’t need to wait to have the broker enter our order and send it to a wire-clerk on the trading floor who then had to use hand signals to communicate to the stock broker actually responsible for executing the order in the actual market being made by the stock specialist at a particular spot at a trading post—and no longer do we have to wait for that entire process to repeat itself in reverse to receive confirmation. All of this now happens in milliseconds.

For years publishers and advertisers transacted on what publishers described as their “remnant inventory” via open RTB (the open exchange, standardized via the OpenRTB protocol) and private marketplaces with deal ID-based transactions enabled by SSPs, DSPs and ad exchanges. Now, we’ve embarked upon the next wave of ad tech, with premium direct sold and guaranteed ad inventory being transacted in a much more automated fashion. Yes, believe it or not, I’m talking about the same directly sold inventory that today is still being bought and sold via insertion orders (IOs) that are—somewhat unbelievably—still sent via email as an Excel attachment.

Agencies are beginning to consolidate internally: they’re bringing together their previously separate agency trading desks with their in-house programmatic teams and the team responsible for executing media plans via traditional IOs. Of course, this consolidation means that big brand budgets will be brought under one group. This group—just like every other disruption we’ve seen—will reduce inefficiencies and rely heavily on data to continue to improve ROAS while also improving efficiency and thus margins.

Two Paths Converge

Over the past few years, we’ve seen programmatic transactions begin moving up the food chain from open RTB, primarily representing publishers’ unsold remnant inventory, to private marketplace (PMP) deals including PMP preferred (PMP-P) and PMP-G.

While these variations give both buyers and sellers greater control in terms of fixed prices, they fail to provide buyers with transparency in terms of priority within the publisher’s ad server. This visibility is key, and represents the last piece of the puzzle. Once solved, big brand budgets will move and move fast.

While there has been interest in PMP and PMP preferred, the majority of interest from buyers in using these channels appears to be focused on the efficiency gains of combining always-on deal IDs with scale.

PMP-G Primer

PMP-G works well when there is an existing relationship between the publisher and advertiser. While these deals are still transacted using the OpenRTB protocol, the auction takes place between just one buyer and one seller. Both sides agree to a fixed CPM, the length of the deal, the minimum spend and typically the number of additional impressions the publisher will send to the DSP to decide on.

Though the buyer has only rough knowledge of the publisher’s composite audience, PMP-G allows them to leverage DSP algorithms to determine which impressions they want to buy and which they want to pass back. Here it’s important to remember that the pacing towards the guarantee of the total spend and purchased impressions becomes a buyer’s DSP’s responsibility, while the publishers are responsible for showing the agreed to amount of impressions.

Automated Guaranteed

Depending how fast agency holding companies shift the bulk of their budgets to OpenRTB transactions, we can gain additional efficiency with automated guaranteed. Automated guaranteed, essentially the automation of the workflow associated with direct deals, allows buyers to request and negotiate with publishers for their previously directly-sold inventory.

Rather than emailing a publisher’s salesperson and having them re-enter all of the information into the ad sales tool that connects to the publisher’s ad server, buyers can start the buying process themselves through an automated guaranteed order, which integrates directly into the publisher ad server. 

What About The Data?

By layering audience data on top of a PMP-G or AG order, efficiency increases and wasted money and impressions decrease. This overlap will then allow us both to forecast and match the site visitors that will be part of either the PMP-G or AG order and deliver only to those visitors that match.

What About The Steak?

What’s so great about audience matching with PMP-G or AG and a more efficient workflow? This is a question I hear frequently. The answer? Today, we can pre-arrange better access via header bidding and secure commitments from publishers for priority as part of our Preferred Access program, which brings larger agency budget commitments to the publisher in exchange for preferred access to premium inventory. As a result, we’re providing value to both sides of the market; buyers are assured that they are getting priority access to publisher inventory, purchase the inventory they want, and reach only the customers they want to reach—thus improving their efficiency/margin and increasing the ROAS. Publishers, on the other hand, get a guaranteed budget commitment and are only filling the requested audience match.

The Future is Bright

After years of promises, 2017 will finally see the fulfillment of the promise of programmatic advertising. Pulling brand dollars traditionally reserved for direct sales over to PMP-G and automated guaranteed with audience data will allow advertisers to target the right message to the right person at the right time with even greater ease. These tools will also allow for the development of robust solutions that further merge the gap between the direct buy and programmatic efficiency, such as the Biddable IO. PubMatic’s investment in developing these tools will give publishers the ability to lock in guaranteed revenue for their valuable inventory and also provide advertisers with a much higher degree of transparency into what they are buying, how it is being prioritized and who their message is being shown to.

For more information on PubMatic’s programmatic direct products, contact your account manager, email info@pubmatic.com or follow @PubMatic on Twitter.

PubAcademy Italy: Taking Programmatic Conversations to the Next Level

By Cristian Coccia, Regional Director for Southern Europe at PubMatic

By Cristian Coccia, Regional Director for Southern Europe at PubMatic

On December 13th PubMatic held our second PubAcademy in Milan, Italy. The event, one of PubMatic’s global educational forums where publishers and advertisers can come together to debate and discuss important industry topics, was particularly interesting on several fronts, not the least of which was the surprisingly technical nature of the conversations that took place throughout the day. Rather than focusing on high level topics or trends, publishers and media buyers alike delved into the technical details on a variety of topics, including how to achieve better results as well as ways to make the marriage between publishers and media buyers work better for everyone involved.

One of the highlights of the event was a presentation from PubMatic Founder and Chairman Amar Goel, who provided the audience with several yield optimization success stories, as well as best practices for building better ad calls (which parameters to add to video ad calls, for example) and how to set up dynamic floor prices to increase yield. Although Amar’s presentation was very technical, it clearly resonated with PubAcademy attendees—in fact, it was the most “snapped” content of the day.

It’s clear from the increasing interest in such technical topics that the Italian market is invested heavily in transparency and not necessarily satisfied with the quickest or easiest solutions.

This PubAcademy marked the first time that we have used a round table format to facilitate discussion, but the conversation that took place—moderated by Amélie Grenier-Bolay, PubMatic’s Director of Advertiser Solutions for Southern Europe—clearly indicated that the digital media industry in Italy has evolved significantly, with publishers committed to making more premium inventory available via programmatic channels, including header bidding. Discussions among media buyers and publishers also touched upon the ways in which header bidding solutions in particular allow for fair competition between traditional and programmatic channels, allowing buyers to compete for better impressions.

When it comes to the maturity of programmatic in the Italian market, it’s worth noting one additional point that also drove conversation at the event. Specifically, programmatic direct solutions—in other words, everything related to PMP, PMP-G and other solutions that allow publishers and buyers to transact while also considering not only data, but also the particular publisher and site where ads will be placed, for example—proved crucial to the growth of programmatic spend in Italy, and inevitably will continue to drive growth—especially when combined with better use of first party data and tools that allow buyers to “size” the amount of “in target” users across specific websites—in the year to come.

The final topic to receive a great deal of attention among PubAcademy attendees was mobile private marketplaces, which publishers and buyers alike view as the best way to inspire confidence among buyers by giving them access to publishers’ premium inventory.

While we were able to provide PubAcademy attendees with some of the answers to the questions posed during the event and specifics regarding how our solutions can help them solve many of the challenges they face today, we’re even happier to report that we were able provide publishers and media buyers in attendance with an opportunity to discuss best practices for implementing programmatic strategy. We look forward to hosting the next PubAcademy in Italy and everything we can share with and learn from attendees in 2017.

pubacademylogouniversal-01About PubAcademy

PubAcademy is a global industry education initiative PubMatic launched to help ensure our customers and partners are in the best position to achieve their individual business goals and address the unique set of challenges that they face in this ever-changing world of programmatic.

For more information about our platform, SEVEN, visit PubMatic’s website here or email info@pubmatic.com. To find out more about PubMatic’s PubAcademy events, including when the next one will be held in your region, or to suggest a topic or speaker for a PubAcademy session, email PubAcademy@PubMatic.com.

Quality: A Founding Principle at PubMatic

das_anand-bw

By Anand Das, PubMatic Co-Founder & CTO

 

“Methbot.”

Identified earlier this week by White Ops, an invalid traffic detection and prevention service provider, and named for obscure references embedded in its code, “Methbot” is a sophisticated Russian botnet designed to capture digital advertising revenue by generating nonhuman traffic—mainly on video inventory. The story has dominated news coverage and conversations throughout the industry this week—and with good reason: according to reports, Methbot is “the most profitable and advanced ad fraud operation ever seen by the industry,” generating as much as 200-300 million nonhuman impressions per day and siphoning upwards of $180 million[1] from the digital media industry.

Quality in all of its various forms has been paramount since we founded PubMatic in 2006, and it remains a top priority today. In addition to continually updating our filtering and inventory quality tools proactively, we also partner with various third-party service providers to help provide the high levels of protection, visibility and transparency our customers and clients have come to expect from PubMatic over the years.

After conducting our own analysis, we’re pleased to report that the inventory and ad quality tools and processes we have in place mitigated the impact of Methbot on our publishers and demand partners. In fact, less than 0.002% of the impressions on our platform were affected, and we’re confident that we’ve succeeded in addressing the issues that are creating invalid traffic generated by this botnet scheme. Accordingly, we will be working with all of our publisher and advertiser clients to assure that we continue to provide the means to address issues such as this.

This incident highlights how important it is for all of the players in our industry to work together to ensure that we’re providing consumers with quality advertising experiences–whether we’re an SSP, DSP, DMP, ATD or any other acronym.


For more information on PubMatic’s inventory and ad quality tools, visit www.PubMatic.com or email info@pubmatic.com.

[1] http://money.cnn.com/2016/12/20/technology/ad-fraud-online-methbot/

10 Years Later: Thoughts From PubMatic’s Founders, Part 2

A conversation with Rajeev Goel, Co-Founder & CEO; Amar Goel, Founder & Chairman; Anand Das, Co-Founder & CTO; Mukul Kumar, Co-Founder & Senior Vice President of Engineering

10th-anniversary-logo

As part of our ten year anniversary celebrations this quarter, we asked PubMatic founders Rajeev Goel, Amar Goel, Anand Das and Mukul Kumar to think back on some of their memories and experiences of founding the company as well as over the past ten years of running it.

Continuing on our previous discussion about the first year at PubMatic, in this post our founders offer some insights into what they’ve learned over the past ten years and offer a few messages they would like to share with our team around the globe.

Q: What’s the most surprising thing you’ve experienced or learned during your time at PubMatic?

goel_amar-bwAmar Goel
: Every day I spend at PubMatic reinforces how important people are. It’s amazing when I look around and see where we’re doing best, and it’s always in areas where we have great people working. That’s also where we have the most fun.

The other thing I’ve really learned at PubMatic is that different markets are truly different. There are a lot of similarities, it’s true, but I think it’s incredibly interesting to see how different leading publishers in the U.S. are from leading publishers in Europe or Asia. For example, most of the bigger display publishers in a market like Germany or France, or even Australia, are truly dominant in their markets, unlike in the U.S. That really impacts the mentality those publishers have and the types of solutions that resonate with them.

kumar_mukul-bwMukul Kumar: I’ve been surprised on several occasions. In fact, each phase of growth has been very interesting and taught me a lot. The most interesting thing that I’ve learned is “Nothing is impossible.” If you want to solve a problem, if you have the will, then you can solve any problem.

 

das_anand-bwAnand Das: Each phase of growth has been a learning experience. One of the things I’ve learned is that nothing is impossible, and as Abraham Lincoln said, “The best way to predict your future is to create it.” I can say that we have lived up to both until now, and will continue to do so.


goel_rajeev-bwRajeev Goel
: The most surprising thing that I have learned, as a manger and leader, is the impact that culture can have on employees. Historically, I thought of employees impacting the culture. While this is true, a powerful and well-defined culture can have an equal or greater impact on employees, with respect to shaping their energy, attitude, passion, and drive. We are doing a better job than ever in understanding this and harnessing it, and I can see that our team is enjoying this tremendously.

Q: What are you particularly proud of when it comes to PubMatic?

goel_amar-bwAmar Goel: I am proud of this team for building a global innovator. We were the first SSP, we were the first to do RTB – that in itself is a lifetime of innovation. It took everyone working together to make it happen. Last year was a real challenge, and it says so much about the folks who stayed, and worked hard together, to work through the challenges and make us again one of the best performing companies in the space. Unified Ad Serving is another huge innovation that I think will drive another big wave.

kumar_mukul-bwMukul Kumar: I am proud of the product that I built, the scale that the product can support, the performance of the product, and of course I am proud of the team that I have built. I am also proud of the rate at which we innovate at PubMatic, which keeps us ahead in several areas in the market.

das_anand-bwAnand DasI am proud of the team, the product that we built, the pace of our innovations, the scale we’ve achieved with our product and the overall scale of our business. We have seen lots of ups and downs in the industry and I am proud of our employees, who have helped drive the same pace of innovation throughout.

Last year was a challenge, and I am very proud of the fact that our team worked hard to get through the challenges and make us one of the best performing companies in the space.

goel_rajeev-bw

Rajeev Goel: I am proud of how far we have come as a business over the last 10 years. Most Silicon Valley startups don’t get to product market fit. A small subset of those that do will get to meaningful revenue – even $10M or $15M per year. At this point, companies typically are losing so much money that they get acquired or go out of business. We’ve used a much longer-term approach, and we are one of the few companies in ad tech now generating cash on a quarterly basis. This is extremely rare. It creates a unique opportunity for me as CEO, for our leadership team, and for all of us as employees to think about how to steer the business and where to invest.

Q: Turning to the industry for a moment, what’s the biggest surprise for you in terms of how the space has evolved over the past 10 years? Where do you see our industry going in the next 5-10 years?

goel_amar-bwAmar Goel: Programmatic is completely taking over advertising. I like to say, “All advertising is going digital, and all digital is going programmatic.” When we started ten years ago, programmatic didn’t exist, and even when RTB started it was hard to see all digital going programmatic. I think this journey is only in its third inning, or maybe 5 overs for cricketers, so there’s a long way to go—especially when we look at the direction of the business and format expansions.

kumar_mukul-bwMukul Kumar: The rate of innovation, from the perspective of both business and technology, has been amazing to say the least. The evolution of online advertising from ad-networks to programmatic to header bidding and beyond has happened at a tremendous pace.

 

das_anand-bwAnand Das: One of the first changes in the industry was RTB, when we first started working on it and launching it in the market there were lots of questions on its viability, latency, adoption, etc. Now it’s de-facto in the industry. The next trends to have industry-changing impact were header bidding, then holistic optimization where one looks at all the inventory as a whole for revenue generation. In most of these cases we got there before the rest of the market. In the next five to ten years will see much more movement towards cross-device as mobile devices become more prevalent and new screens open up—think DOOH (digital out of home), connected TV, and other devices coming to market—and as video and other content consumption increases while the world gets more connected with smart devices.

All of this will lead to a more connected experience for the user, with lots of data for targeting; ads will be more relevant and personalized, and attribution will be possible outside of just the display world (think of tracking the interest level of a user who sees an ad on a digital billboard, then targeting that user on other devices like mobile, laptop, smart watch, etc. and tracking purchases completing the whole circle, with users in control of their privacy). We will see better algorithms for optimization, AI and other technologies enhancing the ad experience for the user and providing better ROI for the advertiser. 

goel_rajeev-bw

Rajeev Goel: The biggest surprise for me is that after ten amazing years of innovation, we continue to solve the same problem at its core – which is one of yield optimization and control for publishers. Of course, the technology and tactics are quite different and there are many nuances that continue to change. But at our core, we are solving the same problem. When you consider the leading technology companies, we can say the same for them – Amazon (solving e-commerce problem), Google (solving search and information access problem), SAP (solving enterprise automation problem), Apple (solving an individual communication and expression problem).

Q: And finally, if you could tell PubMatic’s entire global team just one thing, what would it be?

goel_amar-bwAmar Goel: Anything is possible! We never could’ve anticipated that we’d be able to say that we were helping launch an industry that would be doing tens of billions of dollars of volume and transforming digital advertising. Never forget the impact that a small, committed group of individuals can have. I can’t wait to see what we work together to do next!

kumar_mukul-bwMukul Kumar: I would tell the global PubMatic team to think big—really big—to keep pushing your limits, go get that customer, and go build that product!

 

das_anand-bwAnand Das: I like quotes, so here are a few that I would like to share with the PubMatic team:

“The universe has no restrictions. You place restrictions on the universe with your expectations” – Deepak Chopra

Always have high expectations and think big.

“If you are not willing to risk the unusual, you will have to settle for the ordinary” – Jim Rohn

Challenge the norm, break barriers, push your limits, take risks and make things happen, nothing is impossible.

goel_rajeev-bw

Rajeev Goel: I would tell them to keep making the impossible possible. If you consider our actions and results over the past 12 months, we have done exactly this. We slimmed down our customer list, we automated the product to a great extent, and all with a smaller and better team. We made possible what in many ways we thought we couldn’t do a year ago (including myself). We only need to look at our own track record to inspire ourselves…


 

Stay tuned for additional content featuring insights from some of PubMatic’s longest tenured employees as they think back on the changes they have seen at PubMatic and in the industry over the past 5-10 years.

PubAcademy NL: Programmatic Unlocked

This post authored by Jonas Olsen, Regional Director of Northern Europe at PubMatic

This post authored by Jonas Olsen, Regional Director of Northern Europe at PubMatic

Recently we held a special edition of our global educational forum, PubAcademy, in the Netherlands. The event was special for two reasons: first, because it was our inaugural PubAcademy in the Netherlands, and second because it was the first PubAcademy we’ve held in a country where we don’t have a physical presence. I’m very happy to report that the event was a huge success and left us with three key takeaways that we’d like to share with you:

The Dutch Market is Very Unified

Publishers, and to some extent buyers, are very unified in their approach to monetisation of their digital assets, and there is a refreshing degree of trust and sharing among publishers that we don’t necessarily see across many other markets. Frequently, a leading Dutch publisher will decide to take a particular approach to an issue, and then the majority of other leading publishers follow suit in adopting the same approach. One particular example of this behavior that was shared during our session was when publishers don’t dictate floor prices, instead letting the market decide the value of their inventory.

Additionally, there is a level of collaboration between publishers and buyers that’s fuelled by their collective desire to develop a more open, transparent and fair marketplace. A key driver behind this desire is recognition of the threat posed by the Google/Facebook duopoly and the fact that the only way to be successful in this environment is by working together.

As a consequence, whilst the market in terms of size is smaller than many other markets in Europe, this approach has made it easier for it to mature and punch above its weight in terms of programmatic development and adoption.

Publishers Prefer Using Unified Tech Solutions

Using a plethora of tech partners—one for ad serving, one for SSP, one for mobile, one for analytics, for example—is not the approach that leading publishers in the Netherlands have adopted when it comes to implementing and managing their programmatic tech solutions.

Our audience articulated an overwhelming belief in finding a technology partner who can deliver a full stack solution–such as our comprehensive monetization platform, SEVEN. This was clearly the preferred route for most, if not all, of the publishers in attendance.

The Market is Still Very OpenRTB Focused

When questioned about the slow adoption of programmatic direct solutions in the Netherlands, it became very clear that this is a market that’s still heavily skewed towards open market RTB. When we dug deeper into the reasoning behind the perceived reluctance to adopt programmatic guaranteed solutions, one response we received was, “If it’s not broken, why fix it?”

The buyers in the room felt that the transparency provided by publishers and their approach of having a level playing field – i.e. the ability for everyone to access the same inventory through fair auction pricing – coupled with publishers’ willingness to try and evaluate different buying strategies and tactics meant that they are able to access the best inventory without having to use private marketplaces (PMPs) or programmatic direct solutions.

That said, there was a definite understanding in the room that in order to gain access to large branding budgets and high-demand formats such as video moving forward, buyers will need to be open to adopting programmatic direct solutions and publishers will have to alter their ad decisioning strategies to accommodate these shifts.

Our PubAcademy Netherlands event made it clear that although this is a complex and sometimes contradictory programmatic market—open, transparent and progressive on the one hand, but happy with the status quo on the other—they are open to change and will continue to exceed growth expectations for some time to come.

 

pubacademylogouniversal-01About PubAcademy

PubAcademy is a global industry education initiative PubMatic launched to help ensure our customers and partners are in the best position to achieve their individual business goals and address the unique set of challenges that they face in this ever-changing world of programmatic.

For more information about our platform, SEVEN, visit PubMatic’s website here or email info@pubmatic.com. To find out more about PubMatic’s PubAcademy events, including when the next one will be held in your region, or to suggest a topic or speaker for a PubAcademy session, email PubAcademy@PubMatic.com.

PubAcademy UK: Publishers’ Choice

Our penultimate PubAcademy of the year took place on November 9th in London, bringing publishers and buyers together to discuss the choices publishers are forced to make in order to successfully navigate the sometimes choppy waters of programmatic. We also took this opportunity to discuss how sellers and buyers can work better together to ensure all parties involved realise the value on offer.

Through the discussions that took place, we were able to identify the four key themes that seemed to resonate well with attendees:

Publishers Want to Take Back Control of Ad Decisioning

It would seem that the majority of our industry is familiar with the concept that today’s legacy ad serving infrastructure is ill equipped to help publishers manage and capture holistic yield. It is clear that many publishers are still trying to figure out how they can explore and implement alternative, open ad serving set-ups whilst minimizing the disruption to their businesses.

Working with a holistic monetization platform such as PubMatic SEVEN, with its modular approach, allows publishers to choose which products or solution sets they want to integrate and when. Only by having this choice will publishers truly be able to realise the full potential of their digital assets.

Publishers Want Partners, Not Tech Vendors

While the continued evolution of the market, its increasing complexity, and the plethora of tech vendor choices available all play a role in driving programmatic spend, they have just as much potential to inhibit growth as well.

In that light, our key panelists highlighted the importance of establishing two-way partnerships between publishers and their tech vendors. When publishers are evaluating technology partners, the primary concern is finding ones that are open, transparent and willing to integrate with each other for the good of the publisher and the overall digital media market.

Header Bidding is Still a Hot Topic, But The Conversation is Evolving

During our discussion we challenged the hypothesis that header bidding is little more than “waterfall” 2.0. Many publishers are still allocating priorities as they continue to build out strategies around their direct sold books of business and where the sweet spot can exist between the IO and programmatic direct. Regardless, all of our publisher panelists were in agreement that header bidding has had a positive effect on yield and that it’s here to stay. The conversation is evolving, as is the need. Having to manage multiple header tags and the impact they have on page performance and user experience remains a concern.

Hence the exploration of the pros and cons of solutions that address these potential issues, such as wrapper tags and server side integrations, are going to be vital over the coming months. Looking forward, there remains a lot of uncertainty around whether open source or proprietary is the route to take. The jury’s still out, but expect a verdict soon.

Publishers and Buyers Still Have Work to Do to Make the Marriage A Happy One

Our panel of publishers and buyers shared some of their key asks of each other to help everyone realise the potential that programmatic offers. In no particular order:

  • Make PMP deals more discoverable and design them to meet buyers’ needs. Building PMP deals around curated audiences, for example, or being sure to support the buying models of agencies;
  • Design PMPs to be ‘always on’ and proactively troubleshoot when they are underperforming;
  • Design offers that support the buying models that agencies will be adopting in 2017—the combination of programmatic AND automated guaranteed, for example;
  • Provide access to more targetable and segmented second-party data to drive increased bid density;
  • Finally, communicate more frequently and be more transparent.

pa_logofinaluk112216About PubAcademy

PubAcademy is a global industry education initiative PubMatic launched to help ensure our customers and partners are in the best position to achieve their individual business goals and address the unique set of challenges that they face in this ever changing world of programmatic.

For more information about our platform, SEVEN, visit PubMatic’s website here or email info@pubmatic.com. To find out more about PubMatic’s PubAcademy events, including when the next one will be held in your region, or to suggest a topic or speaker for a PubAcademy session, email PubAcademy@PubMatic.com.

10 Years Later: Thoughts From PubMatic’s Founders, Part 1

A conversation with Rajeev Goel, Co-Founder & CEO; Amar Goel, Founder & Chairman; Anand Das, Co-Founder & CTO; Mukul Kumar, Co-Founder & Senior Vice President of Engineering

10th-anniversary-logoAs many of you already know, PubMatic was founded in 2006 by Rajeev Goel, Amar Goel, Anand Das and Mukul Kumar. What began as an ambitious four-person startup has become a global company with more than 350 employees across 11 offices worldwide.

This quarter the team here at PubMatic is celebrating the company’s tenth anniversary—ten years of innovating for the digital media ecosystem—and we thought it would be interesting to ask our founders to share their thoughts on PubMatic’s early years and how the company, and the team, has grown and evolved since then.

We hope you enjoy this inside look at our company’s origins. Be sure to check back as we continue to share more insights from our founders over the coming weeks!

Q: What’s your favorite memory from the first year of PubMatic?

Amar Goel: To this day, my favorite memory remains the first time I printed out the wireframes for version 0.1 of PubMatic (remember, this was ten years ago!). I remember having a big smile on my face because this was one of the first physical manifestations of our product coming to life and becoming “real.”

Obviously, it wasn’t really real until we started serving impressions and helping publishers, but seeing those mockups made the fact that we were doing this truly tangible for the first time!

Mukul and Anand

Mukul and Anand

Mukul Kumar: Although I have many favorite memories from the first year, one of the top ones is when we wrote our first ad server in Java. It wouldn’t perform as well as we wanted it to, so I sat up all night debugging the ad server only to completely rewrite the entire thing just a few days later.

My second favorite story is when Amar called me one day to say that it “would be nice to see how many impressions we served” (of course, we didn’t have any reporting tools at the time). I asked him, “why would anyone want to see that?” But after about an hour of coding I had written the first reporting interface for PubMatic.

Another good one was when we started hiring and a candidate from Bangalore wanted to fly to Pune for the interview. He asked me, “Who will handle my travel arrangements?” I told him, “Let me transfer you to the Travel Department,” and I transferred the call to Andy, who became the Travel Department for that call.

My last favorite memory from the first year are the times when Andy and I would watch the impressions served in front of us and feel great about the software—this was right after we developed the alpha.

Anand Das: There are definitely many favorite memories from the first year. As Mukul said, one of them is when we implemented the ad server in Java and our first customer—an online dating website—started using our service. The ad server used to go down a couple times per day and wasn’t performing to the level we wanted. Mukul and I used to be coding and monitoring the ad server and managing both sometimes continuously for 24 hours, although eighteen-hour days were the norm.

At that time I had a collarbone fracture with a rod in my shoulder that needed to be removed, but Mukul and I had agreed that we couldn’t continue with the Java ad server based on its performance. Two days prior to my surgery I started rewriting the code in C, completed testing and launched the new server in a day, monitored it for the next day and then checked myself into the hospital for the surgery.

Once I was out of surgery I remember the doctor asking me what an “ad server” was because I’d been talking about it after they administered the anesthetic. The first call I made after I regained consciousness was to Mukul to check on the ad server up time and I was thrilled that it was up and performing well. I remember I also interviewed the second engineer we hired from the hospital.

My second favorite memory from the first year was when Google refused to give us access to their Ad Sense reporting API, even after seeing a complete demo of our system. They gave us that news on February 26th, 2007 and we had our alpha launch with our first client scheduled for March 14th. That was the day that Amar, Mukul and I were very discouraged because our whole idea depended on getting data from the ad networks and using it for optimization. We only had two networks integrated at that time, one of which was Google Ad Sense, and without reporting API access we couldn’t do any reporting.

That night Mukul and I had a frank conversation about Google’s decision and then we went home, but I couldn’t sleep. I started working on the idea of automating the browser to act like a human by logging into the website to access reporting data and I actually got a prototype working.

Mukul and I called Amar the next evening and told him, “We don’t need API access, we have a way out.” We ended up with a web-wrapping-based reporting solution on our end and launched the alpha without any glitches. It certainly boosted morale, and I remember Mukul and I telling each other that no power can stop us; if we want to do something, we will!

Rajeev Goel: Completing the specification for the first version of the PubMatic system, which I called the “Web Ad Optimizer”. It took a lot of work marrying vision with reality, but it was great to put down on paper what we could do so that Mukul, Anand, and Amar could turn it into code.

Another memory is when we were talking to an initial round of 15-20 venture capitalists to see if they were interested in what we were doing. They all said no; they didn’t believe anyone could make money charging publishers. While on the one hand that was discouraging, but on the other I knew that we were onto something unique and visionary. Given that most (certainly not all) VCs tend to move in herds, the feedback made sense.

Q: What did you envision for PubMatic when you started the company? Did you ever think it would be as large, global and successful as it is ten years later?

Amar Goel: When we launched PubMatic it was all about how to help publishers and give them new tools. We were the first SSP to launch—it was a very new industry at the time, considering we were the ones starting it. We were the first to bring RTB to the supply side. But even we didn’t realize how big RTB would be when we founded the company.

It’s truly exciting to see how digital advertising is evolving, and to be on the forefront of that. Programmatic is an uber trend, and we are so focused on making it real for publishers. It has been very rewarding to build a global company with people, cultures and practices from all over the world!

Mukul Kumar: I didn’t think it would be so big. We started a “startup,” then we began growing. I was very possessive of the software I wrote at first and was reluctant to give up coding after we started hiring engineers, but since then each year has been more amazing than the last.komliday36photo1

Anand Das: I didn’t think it would be so big and at this scale. As Mukul said, we started a “startup” and hoped that our customers would utilize what we were providing. Then we started growing and generating revenue, hiring people, opening up offices in various countries.

Even today I find it difficult not to code, even with all the engineers around—you need to keep the skillset sharp! But since then every year has been even more amazing.

Rajeev Goel: I could have never dreamed that programmatic and RTB would become a $50B+ industry, or that it would become the predominant technology for monetization of premium direct inventory as well as unsold inventory. So no, we did not envision that the opportunity would be so big or that we could build such a big company. We knew that the problem area we were attacking was generally a good space to go after, though.

I also did not think I would have the opportunity, along with Amar, Mukul, and Anand, to manage through so many phases of a company – vision, product-market fit, revenue scaling, profitability, cash generation. These are all very different chapters in the life of a company, and it’s rare that Silicon Valley startups move through all phases successfully.

Q: What are the biggest challenges you’ve faced since founding the company?

Amar Goel: Rapid change always creates challenges. When you’re growing super fast it creates challenges around scaling processes and people and being able to think broadly enough. I would say 2013 and 2014 were about super growth at PubMatic. Then 2015 was the opposite side of that as we faced some very tough decisions.

I am so proud of the team for working together and pushing so hard to get through these issues to return us to a position of strength today.

In 2007 when we launched externally we had thousands of publishers and shortly thereafter hundreds of millions of impressions flowing through PubMatic, the industry was so new it was unclear whether publishers would pay. We were confident they would since we were delivering revenue, but many investors thought that the publishers would never pay us Thank god those investors were wrong!

Mukul Kumar: Scaling the product to the next level, hiring the best talent and thinking about what’s next!

Anand Das: Definitely scaling the product to the next level before hitting the wall, as well as hiring the best talent and envisioning what’s next and then making bets in terms of technology investment.

Rajeev Goel: The product cycles in the industry are very short (RTB, PMP, audience data, header bidding, mobile, video, reporting, etc.) and there are a lot of innovation opportunities. It’s always a challenge to figure out what to do and what NOT to do. Of course, if you make the wrong call it can literally end the company – many companies that were around 10 years ago are no longer here because they missed the shift to mobile or they missed the shift to programmatic.

Finding the right team members and helping them scale as the company has scaled is also a significant challenge but incredibly important to get right. As discussed earlier, we have been through many phases of the company in the past 10 years, and success requires very talented, passionate, and flexible people at all areas in the organization. We have honed our focus on supporting our team members and helping them both to be successful and to grow themselves professionally, which is very rewarding.


Stay tuned for more insights from PubMatic’s founders when we release the rest of our discussion, touching upon the changes they’ve seen in the industry over the last ten years, what they expect to see in the next five years, and some of the biggest surprises they’ve encountered during their PubMatic journey.

 

 

 

 

Insights from PubMatic’s Q3 2016 Quarterly Mobile Index

After analyzing the data behind the billions of impressions that flow through PubMatic’s SEVEN platform on a daily basis, we’ve seen four key trends emerge that demonstrate the power of programmatic for mobile advertising. PubMatic’s Q3 2016 Quarterly Mobile Index (QMI), released today, shows that publishers are seeing tremendous results in mobile performance and efficiency.

The two most significant findings from our Q3 2016 QMI boil down simply to ‘private marketplace’ and ‘header bidding.’ Basically, we’re seeing mobile rapidly adopt strategies and tactics for programmatic buying and selling at a faster pace than display has executed on.

Through our analysis we found that mobile private marketplace inventory is valued nearly 200 percent more than the mobile average. Given the benefits of mobile private marketplaces—specifically, the ability to serve ads in environments that provide transparency, help limit fraud and promote accountability—this growth demonstrates the continued shift of brand dollars to programmatic as brands become more comfortable with this channel. Going a step further and looking at the IAB publisher categories that saw the most growth in mobile web eCPM (Entertainment & Leisure, Real Estate, Sports & Automotive, etc.), it’s clear that publishers in the Lifestyle category should make premium mobile inventory available to buyers via PMP.

Our report also demonstrates that publishers around the globe are adopting header bidding strategies for their mobile web inventory as the result of the significant lift generated when all sales channels are able to compete at the impression level. While mobile web header bidding impressions were just emerging one year ago, PubMatic found that mobile web accounted for nearly one-in-five impressions transacted via header bidding in Q3 2016.

Header bidding impressions create more opportunities for advertisers to win an auction for the highly-coveted mobile consumer. Not only does this tactic generate higher eCPMs due to demand, but valuable cookie information gets passed that will allow buyers to make better decisions as well. Now that header bidding is table stakes for desktop and mobile web, the next frontier will include bringing header bidding beyond the header and into mobile apps. This will ultimately provide increased opportunities for growth.

Furthermore, during the Q3 Back-to-School season, retail publishers saw more than 230 percent increase in mobile web eCPM value. Shoppers are spending more of their time researching products and making purchased on their mobile devices, providing further opportunities for effective and engaging mobile advertising. This is particularly important heading into the retail-obsessed holiday season, during which publishers in the retail category should ensure that they are making their higher-quality mobile inventory accessible to advertisers targeting mobile consumers.

Although mobile app inventory share increased worldwide, mobile web monetization continued to provide the largest opportunity for premium publishers. PubMatic data shows that mobile web eCPMs grew twice as fast as mobile app eCPMs between Q3 2015 and Q3 2016, with a growth rate of 32 percent versus 16 percent for mobile apps. Advertisers and publishers need to balance mobile strategy to leverage the growing popularity of apps and monetization opportunity with mobile web. Partnering with programmatic experts can help achieve this goal.

We’ve summarized the key findings from our latest Quarterly Mobile Index in the infographic below, and you can download the full report by clicking here. Be sure to check back in a few months for our Q4 2016 Quarterly Mobile Index as well.

infographic_Q3_QMI_v4b

The Rise of Ad Quality

This article is authored by Nishant Khatri, Senior Director of Product Management at PubMatic

This article is authored by Nishant Khatri, Senior Director of Product Management at PubMatic

While the jury is still out with regard to what led to the rapid rise of ad blockers, everyone agrees that low quality ads and the resulting impact on user experience played some role. As a result, many publishers keep ad quality top of mind, and increasingly are looking for tools to enforce the rules that they think are most suited for their readers/users in an effective and efficient manner.

After looking at these macro trends in publisher ad tech, we at PubMatic decided to invest significantly in developing the ad quality platform of the future. Although that was almost a year ago, we’re now seeing the results of our investment in ad quality coming to fruition. But before we discuss the results, let’s take a few minutes to deconstruct the topic of ad quality as a whole.

What is Ad Quality?

It’s important to understand what “ad quality” really means. Many publishers focus on certain aspects of ad quality, such as how many ads to show on a given page. As a monetization partner for publishers, we have a consultative role in helping publishers make these kinds of determinations, but we also see PubMatic playing a bigger role in helping publishers to enforce rules that determine what kind of ads should be delivered in publishers’ various ad slots.

Within that scope, ad quality is largely defined as inclusive of three specific areas (although for a small subset of publishers there are other areas that are also important, for now we’ll just address the following three). Publishers define ad quality in terms of:

  1. The ability to control which advertisers are allowed/not allowed to run on their sites and apps, including specific advertiser names or categories such as gambling or alcohol;
  2. The ability to control which creative types are able/unable to run on their sites and apps. Auto-play video ads are an example of a commonly blocked category based on how it frequently interferes with user experience;
  3. The ability to prevent malware on their sites and apps.

In addition to these three areas, we’re beginning to see other trends emerge as well. Some publishers, for example, want to block certain file types such as Flash ads. Since we are focused on continually updating and improving all of our publisher products, including those for ad quality, all of our product updates and new publisher tools are informed by this type of feedback and knowledge.

Ad Quality Product Principles

Providing publishers with future-proof tools is just as important to us at PubMatic as providing them with tools that help solve the challenges they face today. That’s why we invested in building a next-generation ad quality platform that could deliver on each of the following:

  • The ability to detect problems quickly and efficiently is incredibly important in the real-time environment of programmatic buying and selling. In order to meet this requirement, our platform needed to be fast—almost real-time—a feature that presents numerous challenges from both a cost and a technology perspective;
  • Our next-generation solution also needed to be comprehensive; in other words, we needed to be able to help publishers ensure the quality of every ad—another feature not without its own challenges;
  • In order to be the best possible solution, the platform also needed to incorporate both in-house technology and leverage tech and specialty features only available from third-party experts, which meant that we needed to determine which part of the platform would be in-house and what portion or portions should be left to third parties;
    Last, but certainly not least, we needed to incorporate automation—an extremely important aspect of the platform when it comes to scale and effectiveness.

As you can imagine, these product requirements translated into a whole lot of software to write!

Real-Time Ad Scanning

After seven months of development, we launched our Real-Time Ad Scanning platform earlier this year. Currently we have almost 200 publishers using our Real-Time Ad Scanning globally. The platform has the capability to capture every ad in the bid stream, make automated judgments on thousands of creatives every day (including creative from more than 100 demand sources representing thousands of advertisers), and to annotate each result with a confidence level. The automated process is then supplemented by the efforts of our ad quality operations team, which uses an in-house tool to review the creative where appropriate and confirm or adjust confidence levels.

As with any technology, we measure the success of our Real-Time Ad Scanning by examining the results it produces for our customers. That’s why we were particularly pleased to see an increase in the volume of violations caught proactively as well as an increase in publisher satisfaction overall. Now, after nearly a year of additional investment and fine-tuning, we continue to see even better results for our publishers and continue to expand the various areas of ad quality that our solution addresses based on new trends in publisher concerns.

What’s Next?

After working with about 200 publishers and fine-tuning the product over the last year, we’ll now be rolling the platform out to the rest of our publishers globally, continuing to make changes and updates as additional feedback and results come in. In addition, we are releasing several products and features to reduce response times and give publishers additional automated controls to remove ads that they don’t like—both proactively and reactively.

Publishers invest significantly in acquiring new and maintaining their existing audiences, and as such PubMatic will continue to do our part to help them keep those audiences happy with the best consumer experience possible.

 

To learn more about PubMatic’s Real-Time Ad Scanning and other Ad Quality tools, or PubMatic’s comprehensive revenue management platform, SEVEN, contact your account manager, email info@pubmatic.com or follow @PubMatic on Twitter.

Header Bidding – Can It Be Contained?

This article is authored by Jeff Hirsch, CMO at PubMatic.

This article is authored by Jeff Hirsch, CMO at PubMatic.

I got you.

In truth, header bidding is already out of the box and there is no stopping it. Ad tech companies that built their business on controlling inventory access will need a different model as control moves back into the hands of the publisher. Many companies are scrambling to make sense of the new market dynamics and catch up, and the industry has taken some Wild West style responsive measures.

What does the proliferation of header bidding really mean for the ecosystem? For buyers, header tags democratize inventory (I’m intentionally staying away from the “commoditization” moniker), allowing them to gain access via the right tech to help ensure accurate auction dynamics. That’s good for buyers and is sure to bode well for digital spend, be it desktop, mobile or any other screen. For sellers, header bidding creates the opportunity for significant yield lift, with the caveat that the issue of tag management moves front and center, becoming critical to publishers’ success.

The next piece of the puzzle is wrapper/container technology. Basically, a portion of publisher-side ad serving has moved into the header of a page (even Google missed this trend), creating the new model for a programmatic world. If you follow the continuum along its natural path, the next wave will result in purposeful programmatic technology built to unify ad serving against all demand.

You think some tech providers are behind on header bidding? When you consider the need for a wrapper to do this right, that is likely a huge understatement.

To be truly valuable, wrapper technology needs to not only provide a container for all header tags, but also must provide easy-to-use and easily accessible management tools for publishers to be able to make sense of all their header demand. It should create a transparent environment based on the principles of access and fairness. Inventory controls should be back in the hands of the inventory owner. Supply-side tech companies should facilitate all of this, not limit it, and should therefore be completely open to integrating all demand in order to serve the best interests of the publisher.

For the record, PubMatic implemented our first header tag tech in 2012 and released our enterprise-level wrapper solution last year. We listened to the market and addressed the need early on, taking into account our customers’ needs above all else. Publishers are back in control and players (including Google) who have built businesses on their backs are officially being de-leveraged. Oh, did I mention that our wrapper features open-source tags AND publishers don’t have to pay a dime for it?

We are ahead of the game and putting our money where our mouth is. Ready to talk?

To find out more about PubMatic’s header bidding and Wrapper Solution, email info@pubmatic.com and stay up to date on all of the latest news by following @PubMatic on Twitter.