Publishers Should Manage Programmatic Sales On One Platform. . . Here’s Why

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By Rob Jonas, Global Chief Revenue Officer

During the last few years, the proliferation of screens and ad formats has added more complexity to the business of advertising sales than anyone could have envisioned. More than half of all visitors to U.S.-based news sites come from mobile devices. The consumption of video content is exploding on all devices. Advertisers are shifting budgets towards native ads because of their effectiveness at driving consumer engagement.  All of these market trends and shifts are happening at the same time that the ad sales market is being automated and brought up to the speed of real-time by programmatic technology.

Many publishers are trying to juggle all of these changes. There’s a seemingly endless stream of point solutions designed to help publishers solve this new world one piece at a time. These individual solutions may offer solutions for managing video inventory, mobile inventory or native inventory but they don’t help publishers grasp the entire picture.

Imagine a stock trader that relied on one piece of software for trading tech company stocks and another for trading financial stocks and yet another for energy company stocks. The ability to manage a stock portfolio holistically would be significantly compromised by these separate views into the market. And it’s hard to imagine that this arrangement wouldn’t compromise overall performance. Yet it can be argued that some publishers are trying to manage their business in a similar way as they attempt to adapt to a quickly changing media landscape.

Managing several technology solutions creates new challenges for publishers that are already struggling to keep ahead of a quickly evolving market. With each new solution comes additional complexity. That complexity involves identifying actual and potential points of failure. It also includes a myriad of integration challenges associated with operating multiple solutions.

With each new point solution that a publisher adopts, there comes a new user interface as well as new reporting and analytics.  Managing all of these vendors and partners becomes a full-time job for an operations department. And every hour that is spent on managing the complexity of multiple solutions is an hour not spent on developing strategies to use the technology to drive revenue.

The reality that most publishers face is that even as the media landscape is spliced up into different screens and formats they still need a simple way to manage their business holistically. The best way to do this is to limit the complexity within their organization.  Deciding to use one platform to manage programmatic advertising inventory is perhaps the quickest and simplest way publishers can limit that complexity.

And evolved publishers are now recognizing this. From New York to Berlin to Tokyo, over the last 24 months, views have shifted. If asked two years ago: “Do you want multiple best-of-breed, point solutions or a single-platform for all of your requirements”, probably no more than half of publishers would have chosen the latter. Today, our experience tells us that it’s more than three-quarters and rising as publishers look to escape vendor fatigue.

This in turn creates yet more impetus to partner with publisher specific solutions, such as those offered by PubMatic. Exchanges or vendors offering buy- and sell-side solutions do not have the necessary focus to serve all of a publisher’s requirements across multiple platforms, formats and solutions in the way that a company focused on Marketing Automation for Publishers can.

Publishers are making technology decisions for the next five plus years and not in the same way that they would swap out a network or allocate inventory to an exchange. These are strategic technology decisions that require sophisticated, publisher-centric technology solutions that decrease complexity and accelerate their advertising sales revenue.

Learn more about PubMatic’s One Platform for Publishers here.

Three Things Publishers Need To Consider for Holistic Inventory Management

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By Ben Skolnik, Senior Director Platform Solutions

As publishers continue to look for efficiencies in their advertising sales strategy by opening up programmatic sales, one of the key challenges they face is finding a way to manage all revenue channels holistically. In just a few years, programmatic has grown from a relatively small portion of the inventory most publishers sell to become a significant part of their revenue picture. In 2015, globally, programmatic is expected to reach 48 percent of total display ad spend and by 2018 the U.S. figure is forecasted to reach 82 percent of all display ad spend according to Magna Global.

While many publishers have developed a sophisticated technology stack that helps them to package, offer and sell their inventory programmatically, they are in many cases still working to address the internal challenges that may impede their ability to manage sales holistically. While the fast changing ad sales market offers a host of change management issues for publishers here are three things every publisher should consider when they are evaluating how to navigate the complexity of multiple sales channels.

Sales Workflow

As publishers continue to grow their direct sales efforts as well as manage external programmatic partnerships, there are some workflow practices that need to be reconciled in order to most effectively manage all of the demand they see. This can include CRM, inventory management, ad trafficking and billing systems. It is not unusual – and often required – for publishers to use different systems and processes across their programmatic versus traditional direct sales efforts. However, in order to truly manage and optimize across all sales channels publishers will need to drive consistency in how they apply their workflow systems to programmatic sales and traditional direct sales. In the current state, platforms that support programmatic transaction offer a level of data transparency that allows for seamless alignment with the direct channel in order to help unify both efforts. The goal is to ensure that one side informs the other as comprehensively as possible.

For example, a publisher may license a third party CRM platform to maintain a database of information about its advertiser and media buyer partnerships. This data will help provide valuable insights for their lead generation efforts. At the same time, data on advertiser or media buyer relationships coming in via programmatic sales also represents a lead generation opportunity but such data is often not captured by the current CRM platform. Therefore, this publisher may want to consider how this programmatic data might be merged into the same CRM system that houses the data gathered from traditional direct sales.

Rate Card Management and Pricing

Rate card pricing models have been used for many decades to guide upfronts and direct sales, long before the advent of programmatic. Yet with many advertisers and agencies now purchasing ad inventory from the same publisher both programmatically and directly, these buyers have the advantage of using the intelligence derived from a publisher’s rate card as well as the price floors and other pricing queues found through the programmatic channel. There is an opportunity for publishers to leverage both sets of sales data about their packaging and pricing to fully understand their demand landscape and optimize their revenue strategy. For example, many savvy publishers will use bid price, bid “density” (the volume of buyers and bids) and the resulting auction close price to understand how buyers are valuing impressions on the basis of context, audience or other forms of targeting. This allows them to gain significant insights that allow for a more dynamic pricing strategy where the direct rate card pricing is informed by buying behavior across all channels.

Sales Team Compensation Plans and Commissions

One of the challenges many publishers face is managing the impact of channel conflict on their direct sales team’s efforts. As many ad sales executives rely on commissions from direct sales as a significant part of their compensation, the concept of “cannibalization” often comes up as a concern when the share of programmatic buying grows, especially when some of the same advertisers appear through indirect channels. Some publishers have started to address this by using the data transparency coming from programmatic platforms to understand which advertisers are running through multiple channels, and then building a compensation plan for their direct sales team that is tied to programmatic sales activity.

With many resources available to get over the challenges preventing truly holistic advertising sales, the biggest challenge is to manage the change process itself. The buying landscape is changing rapidly. However, the tools are there to allow publishers to make the most of their inventory assets, drive the greatest possible value to their available advertising real estate, and stay ahead of the shift in the market.

The Elements of the New Sales Organization for Publishers

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By Evan Adlman, VP Publisher Development, Americas

For most publishers, the last decade has been one of unprecedented change and upheaval. The rapid proliferation of ad formats, ad channels and the evolution to a real-time ad sales market has changed publishing in ways that even the industry’s smartest minds could never have predicted. While the core fundamentals of creating content and then monetizing the audience drawn to that content by making it available to advertisers remains the same, the way all of this is done has quickly changed.

That significant change would seem to beg an obvious question: if the business environment that publishers are operating in has changed so dramatically what is changing inside the publishing companies themselves? It should come as no surprise that the skillset of the folks driving sales and revenue inside publishers has changed. Here’s a quick overview of what has happened.

The Sales Team

First things first, sales organizations are still all about sales and relationships. The cliché has always been that the proverbial three-martini lunch or steak dinner with agency clients will seal the deal. While the new tech-focused environment has made many think that paradigm is over, there will likely always be a place for building and maintaining relationships with larger advertisers.

That said, technology will continue to play a bigger and bigger role in the ad sales process. By 2018, $53 billion of all global ad spend will be spent programmatically, according to Magna Global. Still traditional direct buying will continue to be a significant part of the market as well. So publishers need a sales force that is comfortable having a holistic discussion (direct and programmatic) with clients. Many publishers have initiated trainings to ensure that their sales force has a mindset that allows them to be comfortable in those discussions.

Yield Management

Beyond the sales force, publishers need to make sure they have the right mix of folks that understand the ins-and-outs of the data and technology involved in running a publishing business in real-time.

One of the key needs are people that at a micro level can optimize how a publisher’s inventory is packaged and sold. These folks are often math and data focused professionals or the so-called “quants” that are able to get into the details of the data and find ways to increase yield and revenue.

Technology Management

The final piece is a team that understands how all of the technology pieces fit together and how to manage them as a functioning tech stack. This team should be able to determine the type of solutions a publisher needs to be effective including essentials like their SSP and DMP and the other necessary pieces to build out a full programmatic stack. This team should be able to evaluate platforms and solutions from a technological perspective and determine the best current mix and also anticipate how the technology may change in near term.

As publishers adapt to a world that is moving at the speed of real-time, succeeding in this dynamic market will often mean getting it right internally. While not all publishers will be able to execute this change management exercise at the same rate, the market is making it imperative that publishers evaluate the skill mix of their staff on an a consistent basis.

Native Advertising: Two Truths and a Lie

Graham LinkedInIf you’re not familiar with the popular icebreaker game “Two Truths and a Lie” here’s how it works: each person within a group of relative strangers introduces himself and then proceeds to provide the group with three statements about himself. Two of the statements are true and one is a lie. The rest of the group then tries to guess which of the statements is the lie.

We recently asked Graham Mosley, Senior Director, Native at PubMatic to play Two Truths and a Lie. However, instead of focusing our game on statements about Graham, we decided to focus this round on his area of knowledge expertise, native advertising. We thought it would be a fun way to examine this topic.

Over the past 12-16 months, there has been a lot of attention on native advertising among publishers and advertisers. There’s even some uncertainty over exactly what constitutes a native ad and what function they serve. A December 2013 Interactive Advertising Bureau (IAB) report (link) attempted to sum up native with the statement: “it is clear that most advertisers and publishers aspire to deliver paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong.”

Graham sees a lot momentum in the market around native but also a lot of confusion.

Here is Two Truths and a Lie for Native

Statement #1: There’s now a programmatic standard for native ads that will make it easier for both publishers and buyers to scale native.

Statement #2: Like the rest of the programmatic advertising ecosystem, native is expanding from a strong initial presence on desktop into mobile inventory.

Statement #3: Native is an ad format that’s often used for content marketing, but native is not just a new name for content marketing.

Before we reveal the lie, we wanted to point out that a key reason native has soared in popularity since that IAB report is because these types of ads are remarkably effective at driving consumer engagement.

Some data on consumer engagement:

  • Native ads are 25% more viewable than standard ads (IPG Media Lab and Sharethrough)
  • 52% of native clicks have higher purchase rate (IPG Media Lab and Sharethrough)
  • Native ads generate 82% increase in brand lift (Nielson)

 

And Now . . . The Reveal

Statement #1: There’s now a programmatic standard for native ads that will make it easier for both publishers and buyers to scale native 

True. There’s a relatively new programmatic IAB standard, which is designed to make it easier for publishers and buyers to scale native ads across the advertising ecosystem.

Graham Mosley: Until recently, native primarily lived inside walled gardens – especially social platforms – where a few players with scale could make the rules about how native worked within their closed environments. I believe we’re at the point where native is ready to go mainstream. The industry wants to see a large number of buyers and sellers transacting across an open and accessible environment. When the IAB recognized the need for a standard, it was a clear signal that native was poised for enormous growth. We were an integral part of the IAB Task Force that developed the standard, and built our solution from the ground up in accordance with this standard. Now that the rules of the road are in place, native programmatic can finally scale.

Another key reason we think that native is ready to scale in programmatic is that it will provide native buyers with actionable third party data. When native was primarily constrained to a closed environment, it didn’t provide the data to allow the buyer to make real-time decisions. That lack of real-time decision-making prevented key marketing techniques like creative optimization that is designed to better match the user experience or even the sequencing of messages. That ability is only available in programmatic, which is why we believe programmatic and native are a great fit.

Statement #2: Like the rest of the programmatic advertising ecosystem, native is expanding from a strong initial presence on desktop into mobile inventory.

False. To a significant degree, the momentum we’re now seeing behind native advertising began in mobile, and because native is fundamentally cross-platform, it is now extending to all screens.

GM: We are starting to see programmatic native, which was very much mobile focused, entering desktop as well. Part of the reason it’s been so mobile focused is because the components of native often fit perfectly into the visual snippets that work well within the mobile form factor. However, this way of displaying ad content is being adopted by premium publishers at scale. And buyers are getting serious about buying native programmatically on desktop. This year we will begin to see real spend by programmatic buyers on desktop native. So in a sense, native is doing the reverse of what we have seen in other parts of the programmatic advertising landscape, where things started in desktop and then migrated to mobile. 

Statement #3: Native is an ad format that’s often used for content marketing, but native is not just a new name for content marketing.

True. Native is an ad format often used for content marketing.

GM: Some people believe strongly that in-feed native is a tool only for content marketing.

Content marketing is when brands create and distribute content to provide value and create a relationship with the consumer. The in-feed native unit is natural ad format to drive users to this content, because it gives the marketer a better opportunity to tell a story than a standard banner ad. Additionally, these placements normally blend into the user experience on a style level and matching the context. However, many marketers are also using in-feed native units for more traditional advertising.

At its core, native is another advertising format. While it is the best ad format for content marketing, it will be used for standard advertising as well. We continue to see premium publishers develop integrated content marketing solutions for advertisers that include in-feed native ad units. Now that we have turned the corner on standards, Native will grow significantly this year and into 2016, supporting all types of marketing.

PubMatic launched its new programmatic native advertising solution at Mobile World Congress 2015 in Barcelona. For more information see here (link).

In the Facebook Age, Publishers Are Starting to Face Facts

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.[1]

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.”[2]

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.”[3]

“[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.

 

[1] 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

[2] 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

[3] 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

Will the real SSP please stand up?

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:

OpenXSSP

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).

Example 3_RTB Whitepaper

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.

The Impact of Multi-Bid: Decreasing Deadweight Loss

Andrew Baron, Director of RTB and Revenue Operations
Andrew Baron, Director of RTB and Revenue Operations

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.

Buy-Side Benefits

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%.

Sell-Side Benefits

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).”

The Here and Now of Mobile: What Publishers Need to Know

Wakczak
Bob Walczak
GM, Mobile & Video

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:

  1. Mobile is Not Desktop. There is a key difference in the behavior of mobile buyers than desktop. In mobile, buyers bid less but win 95% of the time. Campaigns all fill 100%. In a market with far more supply than demand, buyers want specific impressions. They expect more targeting. They’re looking for lat/long data and location functionality on impressions and whether an ID was available. Where desktop is often a buckshot approach, mobile is a precision target.
  2. Data is the Premium in Mobile. This precision buying behavior has redefined what is premium in mobile. Properties like ESPN and Pandora acknowledged the mobile shift early on and pushed the market along, but they did so with the right type of enriched impressions to make them able to monetize. Publishers have to understand that you can’t sell mobile just by virtue of being a media brand. They also need to have the right data parameters to push supply and demand. We don’t have too many mobile impressions in the market; we have too many unqualified mobile impressions.
  3. Increased Data Increases Competition. To that end, mobile will become a more efficient market when increased data on impressions leads to increased competition. That will drive scarcity and deliver on what is truly premium in mobile: data enriched impressions.
  4. Transparency is Key. Buyers demand to know what they are getting with transparent targeting parameters. Publishers need to get over their fear of channel conflict and designate quality impressions, and they need to do so openly.

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.