Any parent knows that terrifying moment when the three year old stands up and yells out the F-bomb. It’s entertaining, but pay it too much attention and you’ll just end up encouraging the kid.
That’s the case with the latest outburst from our friend Brian O’Kelley, who suggested in his recent interview, that everyone in the advertising ecosystem has it completely wrong. No one seems to understand the future, and everyone is pursuing a failing strategy. Makes us wonder whatever happened to that old adage about not saying anything if you can’t think of anything nice to say.
We respect the business that Brian has built in display, but his comments were troubling. He basically told publishers to drop dead, declaring them irrelevant and not offering them any real capabilities. We take publisher needs seriously – after all, they own the relationship with the consumer. And we have put our energy towards delivering real mobile solutions to our premium publishing partners. We suppose that if you haven’t successfully built a publisher product with a relevant value proposition, then you might imagine there’s no future in having them as paying customers. We disagree. And as much as we enjoy Brian’s colorful turns of phrase, we hope that he’ll soon bring the same spirited approach and energy to developing mobile offerings.
But hey, it’s the weekend, and as we wind down this week at ad:tech, let’s end it on a good note and say something nice about all the incredible companies that work in this ecosystem. Congratulations to our customers, partners and competitors for continuing to learn and innovate together, and cheers to all those that are committed to making the promise of digital a reality!
Arguably some of the greatest work to emerge from the Nordic region in recent years has been their incredibly enigmatic and gripping dramatic television series, such as The Killing and Borgen, that the global marketplace has embraced enthusiastically. The Nordic televised drama market has changed the way millions of crime lovers view programming,breaking down the obvious barriers of language and familiarity, in favour of a good story. The northernmost European countries knew that their captive audience was out there, but pushing their content into thesaturated English-language marketplace was a risky gamble, that eventually paid dividends.
Now a different part of the media world is turning its attention to the Nordic region as the next high-growth area for the programmatic trading of advertising; and with that comes a fair few risks. Since 2009, when supply-side platforms and ad exchanges announced their support for real-time bidding, this method of trading has taken root with the many tiers of UK publishers, and similarly rapid expansion happened across the channel in France and Germany.
We’ve witnessed website visits increase, and in essence demand for advertising increase, significantly in the Nordic region; brands and publishers can’t help but take notice of this new growth sector. Visits to Nordic retail movie sites for June 2013 saw a 190% year-on-year increase from 2012, and Norway and Finland report a respective increase of 981% and 271% of users visiting retail movie websites.
Infrastructure scale is a big challenge preventing RTB really taking off in the region; pricing and process are not as clear-cut as they are elsewhere. Having recently partnered with Concept CPH in Denmark, PubMatic have gained valuable insights into the reservations, challenges and opportunities available for publishers. Norway, Sweden, Finland and Denmark recognise the benefits that programmatic trading has brought to the digital media marketplace, but the operational logistics of implementing real-time bidding has understandably raised concerns.
David Borring, Partner Operations & Exchanges at Concept CPH said, “We are eager to see a mature programmatic market established in the Nordic region, yet there is a general wariness of such a radical overhaul of current inventory trading. Our publishers fear decreasing overall CPMs, drops in premium inventory value and maintaining brand integrity. On the opposite end of the exchange, advertisers are voicing concerns over programmatic capabilities to effectively scale while safeguarding their brand name, in light of recent incidents like the #fbrape pressure put on Facebook. Despite these concerns, publishers need to realise that they have to get on board with programmatic trading, not only if they don’t want to lose out on ad revenue opportunities, but also to gain valuable insight into their digital inventory.”
Wider apprehensions over private marketplaces (PMPs) and their ability to drive revenue are surfacing, in addition to maintaining established publisher/advertiser relationships and the impact on direct sales. One overarching concern is the fear that publishers will cede control to advertisers, but with proven results from working with premium European publishers we can lead the way in making change happen, given the correct support and advice.
To solve the case PubMatic is currently working in Scandinavia to establish a robust, scaleable RTB infrastructure. Setting trading regulations and data privacy standards will provide further security around processes, pricing and fraud.
To ensure longevity and take the mystery out of RTB, we know from experience that education is needed as much as sector development. Experienced technology partners, with proven track records of developing rich programmatic ecosystems elsewhere are needed to guide Nordic publishers and advertisers through best practices for automated trading. What will follow, and we have seen time and again across Europe, is effective system implementation, revenue uplift and uncompromising attitude to brand safety. Publishers need to understand that programmatic trading and especially our partnership with data management platform (DMP) Lotame enables greater control through audience data segmentation and allows them to connect to more demand sources, hence increasing their revenue.
The current Nordic mindset is focused on establishing an automated ecosystem which addresses the essential need, and once this is in place the previously unconsidered benefits of RTB will be free to flood the market.
Enhanced monitoring will bring definable engagement measures to a burgeoning market and pave the way for fully-executable RTB campaigns that deliver strong returns. We have seen great pace in areas such as mobile and tablet RTB campaigns, in response to a significant increase in mobile web traffic, hinting that the Nordics have the potential to quickly match the rest of Europe’s market maturity. With multi-screening becoming the norm globally, technology providers will be influential in ensuring that future Nordic RTB initiatives will operate seamlessly across all platforms right from the start.
The Nordic region presents an exciting prospect for RTB-enabled trading, but it cannot be rushed. The necessary time to educate, assist and adapt must be allowed if Nordic publishers and advertisers are to build genuine trust in programmatic trading. PubMatic’s position is one of assisting the safety, commercial viability and ecosystem-wide adoption of programmatic trading. Our role is to become one of the leading technology partners across the Nordics with minimal drama and confidence in its ability to stand the test of time.
A Conversation between PubMatic’s Senior Marketing Manager Belinda Smith and PubMatic’s VP of Mobile, Bob Walczak
PubMatic, along with AdTruth and TRUSTe, introduced an innovative privacy technology solution at the Cannes Lions International Festival of Creativity on June 20, 2013. The technology pairing is the brainchild of PubMatic’s Bob Walczak, born from Bob’s prior experiences in the industry, and from recognizing the importance of meeting consumer demand for transparent digital privacy choices.
Q: Tell us a little about your background in the industry.
BW: I was the founder and CEO of Ringleader Digital from 2005 until June of 2011. Ringleader was a mobile ad-server and mediation platform, with a device identification technology called Media Stamp. It was a powerful technology which allowed you to uniquely and persistently identify any device regardless of cookie capabilities. We were offering it to the marketplace as an advantage for targeting and analytics on our platform and for other platforms.
Q: In your time in the industry, how have you seen concerns about privacy develop?
BW: I founded Ringleader at age 25, and though I knew about the privacy issues surrounding cookies, I didn’t get a full education on privacy until Media Stamp had become widely used across the market by top publishers and brands. Media Stamp was a first of its kind identification technology, launched in 2008 as an alternative to cookies, since they don’t work consistently on mobile devices. This wide adoption led to us being served with a privacy lawsuit in 2010. We weren’t doing anything illicit with the technology, but the suit stemmed from the lack of privacy guidelines governing the use of alternative identification technology. Had I known then what I know now, I would have proactively sought an industry wide solution to these privacy challenges.
Q: What was the biggest lesson learned?
BW: Fast forward to me joining PubMatic; device identification is still a fragmented market. My view was if we were going to enter this market, and do it in the right way, we needed to be the leaders in advocating for an open solution for the industry to protect consumer privacy and provide them with persistent privacy options.
The Digital Advertising Alliance (DAA) has now produced an excellent set of privacy guidelines, and a framework to honor consumer privacy choices. While these guidelines address the rules around protecting consumer privacy they don’t offer a real world technology solution that instructs how a company should pair a privacy systems with any identification system.
Q: So why are you working with other technology companies on these solutions?
BW: We are doing this for multiple reasons. The first is technical. It’s the combination of the approaches being implemented by AdTruth and TRUSTe that allow us to achieve the privacy technology solution. However, the solution we built is modular meaning any privacy system or identification technology that meets the DAA requirements can be implemented in place of TRUSTe or AdTruth.
The concept behind our work with AdTruth and TRUSTe is to pair a device identification system that allows publishers to serve relevant content to users, with a privacy system that gives transparency and privacy choices to the consumer. The key is that the privacy system has to be deterministic; meaning that if that user has opted out their privacy choice will be honored 100% of the time. The identification technology can be either deterministic or probabilistic. Putting these two systems together is the technology solution that we are advocating for.
The second reason, which I feel is the more important one, is that taking consumer privacy seriously must be an industry wide effort. Without broad support from multiple vendors, what we are doing here isn’t going to achieve much. Ultimately, we want consumers to be comfortable with how privacy standards are implemented.
Q: How does leading this effort fit with PubMatic’s goals?
BW: At PubMatic we serve premium publishers. We need to ensure that we are protecting both the publisher and the consumer in the course of doing business. This is not only about the trust that we have with our clients, but it is also about the trust that these brands have built with their customers. Based on my experience I believe the right thing to do here is to lead by example; ensuring we do it in an open, honest, and inviting way that brings everyone on board.
I sat down today with Lotame’s Founder and CEO Andy Monfried to discuss the recent integration between the partners and how they are uncovering audience data to make publishers’ business much more transparent.
Rich Sobel (RS): We’re really excited about this partnership, and what it means to put two premium businesses together. When we first started conversations about this, some time ago, what clicked for you?
Andy Monfried (AM): The tremendous footprint that PubMatic has, and the unbelievable supply opportunity that you guys are tasked with and responsible for. I saw it not only as an asset but also as a unique challenge.
RS: You have been very publisher-focused since the beginning, in terms of helping them manage their data. In our world, we have a number of clients who could be considered marketers as well, who require the same support for their data management.
AM: Our visions are aligned in that respect. Many of our products allow the sharing of data from a publisher point-of-view to a marketer point-of-view, all from the click of a mouse. So if you choose to share your first party data on a permission basis with a marketer, we enable that function. The movement of data, quickly, easily and seamlessly is what I believe makes the plumbing of our DMP a key differentiator.
As far as what’s trending, whether its mobile, CRM, RTB, or transactions, we’re seeing an explosion of data sharing across our ecosystem.
RS: The programmatic experience is about finding the user you’re looking for.
AM: I totally agree—I think that marketers will learn to bring a small portion of their CRM data to large publishers who can then model it out across their first party inventory. And that’s a benefit for everyone. PubMatic sits at the center of a lot of those transactions, and can enable that type of transaction.
RS: When you think about all the things that are necessary to make it all work, there’s the user component of it, and then the transaction part. So, there are a lot of complements across our platforms.
AM: Yes, there’s a natural symbiotic connection between what PubMatic excels at and what Lotame focuses on. We collect first party data in a unique way—Lotame allows you to write rules and capture events behind the scenes so the publisher doesn’t do any heavy lifting. A-synchronous data collection across user experiences is huge.
RS: The combination of multiple components in a single stream.
AM: Exactly. And that’s a key differentiator for us, how we do first party data collection. First party data is one of a publisher’s greatest assets—that’s why we put such an emphasis on getting the most from it. It’s not all equal.
RS: And you’re getting the smarter publishers. Not all SSPs are the same; different elements need to be taken into consideration. Both PubMatic and Lotame go the extra mile in terms of how we create unique technical solutions for our customers. PubMatic runs a truly unified auction across all buying methods – including guaranteed, direct sold campaigns – and the most advanced Private Marketplace solution, while Lotame has the most advanced and granular ways to collect and manage audience data. This brings us back to this partnership, which will impact the ecosystem in a major way. There’s so much competition out there, but there hasn’t been much collaboration.
AM: The ease of integration mitigates the amount of work and increases the results. The hard work comes from PubMatic and Lotame, rather than the publishers. Whether it’s data collection, categorization, targeting, optimization, and construction, these are all executed by Lotame and PubMatic service and support teams. One of the key goals of this partnership for me was to reduce the workload on publishers, and I believe our mutual clients already see the opportunity and value we bring together to them.
RS: We take a consultative approach to how we serve our clients, and you guys do something similar. There’s a lot of data crunching required — we act as a guide to help publishers by taking the work off their plate. For publishers who want to take the next step, and have seen the shifting sands to manage their share of wallet, there’s no other option than to engage in the programmatic, RTB-enabled world of media buying.
AM: It’s true. Publishers don’t have the extended resources to sit around and wait for the tasks they have to perform. So this partnership is the next step in making a publisher’s life easier and making assets more valued.
RS: As advertisers start to dictate terms more formally, using programmatic tools, publishers can face these changes by defining and leading a consortium. Scale matters, and publishers who are looking to compete for larger share of wallet have to find ways to expand their footprint. Data is one way to find more audience, and creating partnerships establishes premium pools of inventory to activate that data.
AM: Absolutely. We allow publishers to share data on a permission basis with each other to find their users across their partners. Data must be extensible, but publishers need the controls that we (Lotame and PubMatic) provide to make it brand safe.
RS: Integrity is important to us, and it’s important for us to work with premium businesses that feel the same way. Our customer relationships are more important than anything else. And we value this partnership, because we know that Lotame shares these values. On that note—what was the initial idea behind the partnership?
AM: We wanted to focus on ways we can increase value for publishers, by leveraging data, knowing that most major marketers and publishers are in the hunt for the right DMP for business. People work with DMPs and SSPs out of necessity—Lotame and PubMatic together come to the table with a more cohesive offering: this partnership.
We have similar visions for our companies, and at the end of the day, we both always hold the client at the highest regard for whatever their goals are.
In addition, PubMatic has a global footprint from which Lotame is very excited to benefit from. Data is important everywhere, and PubMatic’s experience and expertise in key local markets make this partnership very exciting.
Rob Jonas, the new Vice President and Managing Director for EMEA and APAC, will lead international sales and help drive continued global expansion of the PubMatic platform. He brings 15 years of experience developing high-growth technology companies in the EMEA, North America and the Asia-Pacific regions. An alumni of InMobi, Google, Overture and Yahoo!, he has managed large regional customer relationships and contributed to the successful global expansion of these companies.
What will your experience with global brands like Yahoo! and Google bring to a developing company like PubMatic?
I’ve worked at both large global companies and start-ups like InMobi and hope to bring best practices from each. When you work with different global companies, you see that they approach international expansion very differently — some better than others. You have to make sure you understand the markets you are going into and recognise there is a huge amount of variation in how businesses work in Europe and in Asia. One-size-fits-all is a recipe for failure; there are many nuances and differences across the markets. Secondly, you have to make sure you have experienced people who know the pitfalls to avoid. Ten years ago it was difficult to create a team with adequate digital experience across multiple markets, but today there are more and more people that have that experience, enjoy the business and are passionate. Lastly, you need to have a clear strategy. Many businesses that launch in international markets with only people on the ground fail because they neither defined success nor created benchmarks to achieve it.
What is the biggest challenge for publishers globally today in terms of revenue generation?
There really are three challenges. First, is the speed of change versus ten years ago, which has created higher levels of complexity for operating businesses, servicing customers and managing competitive threats. Second is the multi-platform dimension coupled with the rise of mobile. Even three years ago publishers were not focused on mobile — it was analysts talking about how important it was. Today, publishers are grappling with multi-platform content distribution and monetisation. Mobile usage adoption has caught many publishers by surprise. Globalisation is the third factor. Ten years ago, monetisation operated in local markets. Today however, major players are finding that huge parts of their business come from outside their home market. Take UK news publisher The Daily Mail, a London-based publisher, which has attracted a large US following, making it the largest online news site in the world – even larger than the New York Times. Two or three years ago, few people would have predicted that. As a result, the traditional model of in-house sales teams selling to local advertisers has had to adapt.
How would you compare global markets in terms of RTB adoption to the US?
The U.S. is obviously well established but international markets are becoming more and more important. The UK is a crucial digital advertising market as publishers have more widely adopted the technology – it will be a leader in Europe for RTB growth and overall market size. Japan has caught up to most Western European markets and has the most potential to rival the U.S. in overall size in the next few years. Total RTB spending in Japan will grow from $47 million in 2011 to $1.1 billion in 2016. Beyond these, France and Germany will become critical in Europe. Both of these markets are conservative in adopting new advertising technologies, but once embraced, have the capability to grow very quickly. Australia, India and China will all contribute, with the latter having potential in the long term to be one of the largest RTB markets globally.
How can publishers overcome the current commoditisation of inventory that is often blamed on programmatic?
The first iteration of programmatic buying led to the commoditization of remnant inventory for publishers, which pushed down CPMs and yield. It’s now a very different marketplace with companies like PubMatic offering sophisticated capabilities and platform functionality. Now publishers can take inventory they may not be able to sell directly, layer in audience data and package it in ways they could not in the past. The publishing business is more complex now and requires technology to increase value from global audiences.
What’s your version of an elevator pitch for what PubMatic offers to publishers?
We’re solving critical problems: How do you monetise your digital assets in an increasingly multi-platform and global marketplace? How do you use technology to increase value and complement your direct sales activities? PubMatic is at the nexus of two huge trends in digital advertising: the rise of programmatic buying and selling of inventory and the consolidation of platforms as users consume content across channels.
How do you see the demand side of the business?
I’m one of the big believers that the demand side will drive the ecosystem and will catalyse the marketplace. Leading Agency Trading Desks project that programmatic buying revenue will amount to hundreds of millions of dollars within the next 24 months. European publishers are expected to increase RTB budgets by 1000% in 2013. With this in mind, PubMatic will continue to develop relationships between publisher customers and demand clients.
Unified optimization, or the idea of evaluating all inventory sold through a platform, is a pretty radical concept to a lot of publishers who want to continue to segregate inventory into direct sold and premium. What’s the first step they need to take to better understand this concept?
By articulating our vision of growth, we are able to update publishers’ perceptions. Once they are on board, many of their concerns disappear. Our platform offers consultative, 24/7 support so our customers are able to maintain a solid understanding of the current state of the industry as well as prepare for future shifts.
Coming from a mobile network, what would you advise publishers to do to increase the value of their mobile inventory?
If you are a mobile publisher today, it’s a challenging market. Publishers need to educate advertisers on why they need to be focused on mobile and help them understand how to plan, buy and run campaigns. We’re still having the dreaded “year of mobile” discussion — the market is still divided between performance / pay for download and brand advertisers. We have more work to do on the creative level to unlock the potential of the platform. We have to take into account the personalised nature of the device plus the data that is attached to it. Soon, we will get to a point where targeting will go beyond “male, 18 – 34, ABC1, in London” to intent context or intent-based targeting. We will be able to target someone about to go shopping, get on a plane or commute to work. As an industry, we’re also developing enough experience around gaining user consent; surveys have confirmed that users will exchange consent for more valuable content and relevant advertising. On mobile, there is so much potential for advertising and we are getting closer and closer to this every year.
What are your daily must-reads for business and pleasure?
I use Twitter to stay informed about industry news from outlets such as Business Insider, AllThingsDigital and TechCrunch. As I am relatively new to the programmatic sector, sites like ExchangeWire are also must-reads. In the mobile space, there are a handful of analysts who really understand the hype often associated with the mobile sector such as Ben Evans at Enders Analysis. Outside of work, I am a pretty active road cyclist and am usually checking on the latest European race on The Guardian or L’Equipe or what my network is up to on Instagram or Strava.
Why did you join PubMatic at this point in your career?
PubMatic predicted many of the trends that are coming to market and after coming in to contact with the company more than five years ago, now is the perfect time to help accelerate its plans in EMEA and the Asia-Pacific region. The speed of change, increase in cross-platform complexity and inexorable rise of programmatic buying is only going to increase in the next few years. I am looking forward to working with the fantastic team at PubMatic during this next stage of growth.
Or, How the IAB’s view of the advertising landscape leaves out the most important force in media & marketing: People
A blog post by Rich Sobel, Director of Product Marketing & Platform Strategy, PubMatic
As usual, the annual IAB meeting brought out the luminaries of publishing (and yes, there are more “rising stars,” this time for digital video) an update on viewability, big data vs. creative, lively discussions on native ads and the future of display. For me, the biggest introduction was IAB’s updated view of the online advertising eco-system (http://www.iab.net/IABArena), a much simplified version of the fabled LUMA-scape of Terence Kawaja.
The IAB has long complained, rightly, about the need for clearer value propositions for ad technology companies and I applaud their efforts to move from a messy, logo-ridden process flow to a more holistic vision. It’s elegant, it’s aesthetic! My gut reaction is that they missed something: people. They’ve chosen brands as the central force. So, yes, Randy, you’ve left out the human side of advertising.
While brands power media spending, the core is always the consumer. Everything starts with a relationship. That relationship between the brand and the people who choose to engage with the brand (either through content or purchase activity) is paramount. Content’s engagement with a consumer, and the entire audience created, is both the driver and the pinnacle of everything the content creator’s business is based on.
In our media ecosystem, with that human-centric core, everything comes down to data.
Data may have gotten big and can be valued in bits and bytes, but in the end, all data does is tell us something about people: how they engage and interact with media, and develop intent to take action in their lives. Engagement, interaction, and intent are the foundational elements of understanding and responding to an audience. That goes for both publishers and advertisers. Data, used in the right way, is about making it all more personal: the experience of media and the experience of advertising. Publishers use data to inform their user experience and drive a more engaging and content-rich relationship with their audience, and advertising brands use data to develop products and drive consumer relationship with those products. Retargeting is a straightforward example of a brand deploying data to re-engage people who have shown intent and offer them something of value.
Data provides the “why” in what we in advertising do as a business, and the relationship with the consumer is a value exchange. In return for content and products, people provide data that indicates their engagement with that content and products. The core value proposition of ad technology companies is to take the knowledge gained from the experience of a consumer and improve the next point of engagement.
Ad technology platforms, like PubMatic, provide the “how” to take data and apply it to make advertising more personal on a publisher’s media property. A Private Marketplace allows publishers to apply their audience data in a direct sales environment without risking the open market commoditization of their data, and leverage the power of their audience relationship, blending the premium and programmatic sales channels without conflict. It’s only one of the paths forward we see in a simplified ecosystem where people and their experiences with brands (both publishing and advertising) are increasingly personal, relevant and positive.
As we attempt to explain the business we are in, we cannot forget that everything begins and ends with a consumer relationship. We should be more focused on defining the problems we face and the solutions we provide than with creating a chart. Let’s solve our customers’ problems and drive great experiences.
Andrew Zeiger, the new Chief Revenue Officer of the Americas for PubMatic, brings 20 years of experience with top publishing companies like CNET, technology companies like the Geeknet and data companies like RichRelevance. At PubMatic he will oversee revenue operations, strategic account development, and be responsible for devising innovative solutions to drive continued growth in North and South America. He discussed the opportunities he sees for PubMatic clients and how he can help them meet their goals.
Why come to a company like PubMatic now?
Two reasons: PubMatic is filled with smart people and truly has a culture of innovation. PubMatic has already established leadership through innovation in an industry space that has sorely needed it as the pace of changing models and growing demand accelerates. As programmatic buying and selling become more important in the advertising ecosystem, I’m convinced that PubMatic will be the real-time engine that drives the industry forward for publishers and demand partners while creating a more useful consumer experience.
How did your background prepare you for your role at PubMatic?
I see this role as the culmination of my experience. I started on the agency side and lived and breathed the whole buying process. Then I spent the better part of 20 years on the publishing side. I understand what the publisher pain points are and the solutions that are needed. One thing that has been a recurring theme in my career has been creating value for consumers and, consequently creating an environment that allows for a positive interaction between consumers and brands. This is an important focus for PubMatic as we continue to create value for all constituencies in the marketing equation.
What is the biggest challenge for publishers today in terms of revenue generation?
Traditional publishers are still working on a model of a direct sales force exclusively representing their inventory. While there will always be an important place for that, it simply does not scale to the extent that publishers and demand partners require in an increasingly fast paced environment requiring real-time decision making and execution. Most often publisher’s inventory is left underutilized and under valued. What has been lacking in the rapidly changing world of programmatic sales are insights and innovations on both the publisher and demand sides. They have to be able to understand the value of tier-two inventory. When you become a data centric company – which is what all publishers have to develop expertise in – you unlock the value, increase revenue and improve results. There has also been a total shift in terms of the speed that automation brings to the market. We all know how hard it is to accurately predict and monetize spikes in inventory volume, but RTB can solve those issues. Direct teams just cannot respond with the timing required in today’s market.
What excites you about programmatic buying and selling?
It’s bringing an intelligence and value to the consumer that is really difficult to do in a non-automated way. We can also accelerate a marketer’s time to market with technology solutions that match the right message to the right individual. It’s positive for everyone involved.
Many publishers fear commoditization; how can you help them understand that RTB is not a race to the bottom?
PubMatic has done a great job on the data side. They are bringing value to what has been considered remnant. RTB is bringing intelligence to an unsorted mass of inventory. For too long it’s been a price story as there was little visibility into what you were getting. As recent data from PubMatic shows, RTB doubled CPMs over what publishers could get from ad networks in Q4. Private Marketplaces – which offer huge benefits in terms of transparency — increased CPMs dramatically over traditional ad network buys. Advertisers are coming on board as they are getting the quality inventory that’s just not identifiable in exchanges. PubMatic does an excellent job of balancing the needs of both publishers and advertisers.
There’s been a lot of discussion of programmatic premium. How do you define it and what do you think publishers need to understand about it?
It’s early and we’re still getting the market used to the idea that the direct sale can be augmented with programmatic. Advancements in programmatic premium such as Private Marketplaces have facilitated strategic direct deals to get more creative in their own time. Everyone in the equation wins.
PubMatic’s ultimate goal is the concept of unified optimization: using the platform to evaluate all inventory sales. Yet, many publishers still fear the cannibalization of the high CPMs of their direct sales through such an approach.
We need to expose exactly what unified optimization means. There are lots of reasons why publishers might want to allocate or do deals. Unified optimization is being able to look at all inventory and allocate what you send to whom. What is the availability? What are the pricing thresholds? When you take the distinct use scenario and say this portion is only for direct, this is for programmatic, you ultimately leave money on the table. Unified optimization will ultimately be adopted as publishers realize that it will provide a marketplace intelligence that just wasn’t there and that is demanded by the changing way that advertisers want to buy media.
At PubMatic, you will also be selling to demand partners. What do you think PubMatic brings them that they can’t get elsewhere?
Their focus has always been on premium publications. They stand for a high level of quality in the marketplace. And the science and the algorithms are really strong. They’ve invested far more in engineering than many of their competitors. They’ve also brought security measures and data protection that are critical to the health of the industry.
Mobile is the hot area of growth in digital advertising; how do you see PubMatic helping publishers increase revenue in this nascent area?
PubMatic is taking a holistic approach and providing the same tool set for mobile as for the online marketplace in general. From the traditional screen, to tablets, to the new Windows machines that are crossing over – the same value proposition still exists. Buyers will increasingly want cross-platform digital and PubMatic will be able to provide it.
You’ll be based in PubMatic’s Redwood City office. We assume you will be doing lots of traveling.
I like and need to be in front of customers – it’s how a lot of great ideas and possibilities are fleshed out. Chief Revenue Officer is not a job done sitting behind a desk. Besides, I grew up in New York but left 20 years ago. It will be great to be working with clients there and all over the country.
I recently attended Digiday Exchange Summit in Miami and was thrilled to see that the concept of programmatic premium was right, front and center of the discussions on stage. At PubMatic we’ve always known that there was a better future for publishers than getting trapped in the low CPMs and bad ads of the early days, and RFP and IO-based selling of the present. And now a collection of agency execs and brand marketers from companies like Kellogg’s and Mediabrands, and top publishers like Forbes and Weather Channel came together to talk about new areas programmatic is expanding into.
The general consensus was that the next wave of growth in programmatic buying will come from brand dollars rather than direct response and that programmatic has a healthy multi-platform future in mobile and video. There was acknowledgement that RTB does not mean the replacement of a buyer-publisher relationship with technology, but instead it can enhance existing relationships through efficiency and transparency. Out goes a traditional RFP-based buying! As Ad.com’s Dave Jacobs, SVP Publisher Services said: “The biggest myth of RTB today is that the marketer will no longer want to talk to the publisher.” We’ve seen this through our own experience with clients, especially for Private Marketplaces. Technology is the enabler, while people buying and selling are freed up to communicate about strategy over minutia.
In order to get those brand dollars to go programmatic, there are a few key things that have to happen: transparency has to be increased, measurement needs to evolve beyond traditional CTR, publishers have to be able to exert control and RTB has to support non-standard ad units.. The transparency issue is an important one: in a marketers’ surveyconducted by Adap.tv, 91% of brands and 89% agencies believe viewability will be standardized within the next 12 months and marketers will no longer pay for ads that are not seen. I should note that comScore viewability metrics have been integrated into the PubMatic platform through PubLink, PubMatic’s enterprise app marketplace.
Video, a PubMatic initiative on our 2013 roadmap, is of course a hotly pursued format for brand marketers and has seen an explosive growth over the last few years. It is driven by growing video consumption on mobile and tablets, and growing video ad budgets which increased by 27% last year, and are expected to increase another 20% this year. Several panelists noted that video is about 12 months behind display in terms of programmatic sales. Video has a unique set of challenges that we don’t see in display. For us to see programmatic buying in video take off, we need to solve for the universal support across different formats and devices in the multi-device world; we need to develop a new set of measurements different from display (e.g., iGRP); and we need to achieve sufficient scale of inventory that has been scarce in the past. If we solve for these challenges, we can see programmatic sales in video grow from a single-digit percentages today to a meaningful share of total sales. Dan Masher, GM of Brightroll, a video exchange, expects that within 12 months programmatic will be 15 – 20% of their business.
In a State of the Industry panel, execs from Adap.tv, Horizon Media and The Weather Channel noted the current disconnect in agencies between those who buy digital video and those who buy TV although one is so often an extension of the other. But, as the Digiday survey pointed out, 78% of agency execs think they’ll do buying and planning of TV and video together in the future. We look forward to the day when demand partners can go into a platform like ours and get that network spot, plus online, plus mobile, plus tablet.
Day two closed out with an agency panel. Vik Kathuria, Managing Partner of GroupM/Mediacom stated that 10-15% of budgets are going to programmatic with a focus on getting brand dollars. Brendan Moorcroft, CEO of Mediabrands, noted that programmatic is the biggest growth opportunity for his agency globally. We couldn’t agree more.
… And We Made Deloitte’s 2012 Technology Fast 500™ List!
As the year comes to a close, I wanted to highlight some of the amazing achievements of PubMatic that have made it the leading strategic selling platform globally. From our engineers who created great products, to our salespeople who sold them, and the client services people who made them hum, PubMatic is a company of people and technology committed to making every ad, every sales channel, every screen more profitable.
When I think of our advances this year, first and foremost is the fact that some of the leading media companies chose us in 2012. Hearst, Rodale, Martha Stewart, The Weather Network and Belo Interactive all became clients. These comScore-100 publishers were attracted to PubMatic because of our independence and our legacy of innovation. Here are just a few of the developments I am most proud of this year:
Product Innovation: PubMatic continued to innovate in marketing technology throughout 2012. In February, we introduced PubDirect, a suite of management tools including a milestone in product development that delivered on our holistic vision of inventory management. Included in the suite is a Unified Optimization Engine – and accompanying reporting tool Unified Insights – which allows publishers to maximize revenue of guaranteed and non-guaranteed inventory against multiple demand sources.
Audience Direct – which is also part of the PubDirect suite — gives publishers the ability to meet the demand for audience buying by helping them to create and manage the variable value of their audiences in real time.
In March, we introduced PubLink, an enterprise app marketplace for publishers. This set of open APIs enables publishers to use PubMatic’s strategic selling platform as a single point of integration to access partners and services in real time. Our current partners include Evidon, comScore, ShinyAds and MobStac.
Mobile Innovation: Between Q1 and Q3 mobile paid ad impressions grew 700% and mobile development was a priority for us throughout the year. In March we acquired MobiPrimo, a leading mobile development technology firm. The capabilities of MobStac, a company that optimizes mobile content for any wireless device, were integrated into PubLink in December. We also announced version two of an MRAID SDK which enables publishers to seamlessly work with the leading networks and all rich media formats through the PubMatic platform. It includes an auction algorithm which speeds delivery and reduces latency.
Rounding out our mobile innovation is a custom iPad app to make reporting even more accessible for clients. MyReports was accepted into the Apple App store in December.
Thought Leadership: In addition to ground-breaking new products, PubMatic continued to lead the industry through the sponsorship of research about market sizing and effectiveness of programmatic buying and selling. We sponsored the second edition of an IDC report on the use of Real Time Bidding globally, that is perhaps the most cited source of information on this advertising sector. The study showed that RTB is the fastest growing digital ad segment and is predicted to increase to $13.9 billion in spending worldwide in 2016 or 27% of the display market. We also sponsored a total economic impact report from Forrester which showed that use of our platform could result in a three-year risk-adjusted ROI of 334% and 50% incremental lift by leveraging a Private Marketplace strategy. Both of these reports were highlighted at Ad Revenue 5, our 5th annual industry leadership conference which was attended by over 250 of the top advertisers, agency and media executives in New York in October.
Awards & Accolades: In November, PubMatic was ranked the Fastest Growing Online Advertising Company in the US Internet Sector, 20th Fastest Overall in North America, on Deloitte’s 2012 Technology Fast 500™. PubMatic was also named a leading sell-side platform in The Forrester Wave: Sell-Side Platforms report, which was released in January. We’re honored to be included in both.
International Expansion: PubMatic started the year with offices in the US, UK and India, and added offices in Germany, France and Australia. In November we opened a new data center in Singapore. We continue to expand internationally as the market dictates and Real Time Bidding goes global for publishers.
People: PubMatic hired some of the best in the business and added a Chief Counsel, a CMO, a Head of HR, and VPs of Mobile, Engineering, Publishing Sales and Product Management. Our total number of employees is now over 350.
Funding: We took on an additional $45 million in funding in June. New investor August Capital lead the financing, with participation from all existing investors including Draper Fisher Jurvetson, Nexus Venture Partners, Helion Ventures and Silicon Valley Bank.
As we Iook back over 2012, it was a pivotal year in terms of the growth of the company. We welcomed some of the most prestigious names in media as clients. We put the right people and products in place all over the world. We truly continued on the path of what we started when we created RTB from the publisher perspective back in 2009. Our publishers are growing in their sophistication of the platform. They may have started with simple yield optimization, but since have adopted Real Time Bidding and now many are engaging in Private Marketplaces where they are maintaining and growing their best relationships in an open and transparent way – all while increasing CPMs.
Unified Optimization is where the growth will be in 2013, as publishers think holistically and evaluate guaranteed and non-guaranteed inventory side by side to best determine where and how to sell it. The IDC research showed just how much potential there is for the automation of direct sales. We are helping our publisher clients realize that opportunity and raise their CPMs as programmatic premium becomes a reality. A platform like PubMatic provides more control and select access to the inventory that drives impact. We predict that 2013 will be the year of total value creation for the publishers and buyers across our platform.
At Ad Revenue 5 in October, PubMatic brought together some of the smartest people in the advertising and technology space to discuss the future of media. It was a landmark event with over 250 leading publishers, media executives and marketers in attendance. Publishers came away with new ideas and techniques for taking control in an advertising world that is increasingly automated and programmatic.
If you missed it – or want some of your colleagues to benefit from the panels and speakers, we now have highlight videos for your access. Top execs like Ari Bluman of GroupM, Michael Kuntz of Rodale, Michael Rooney of the Wall Street Journal, Kyoo Kim of NBC News, Kristine Welker of Hearst, Susan Hogan of Viacom and Rishad Tobacowalla of VivaKi addressed everything from the promise of mobile to programmatic buying and selling techniques and the potential impact of viewability on the industry.
Our industry moves so fast and this is a great opportunity to get up to speed with the trends – and the thought leaders – who our shaping our industry into 2013 and beyond.