By Duncan Chamberlain, EMEA Director, Advertiser Solutions

Programmatic Trading is the buzz word for 2013. Many publishers are showing interest in adopting this more efficient way of trading but often lack the support to do so. Concerns in the market are rife, and it can often seem discouraging when the knowledge behind the technology isn’t there. And to confuse matters, Private Marketplaces (PMPs) have entered the programmatic scene, leading to even more mystification and fears on the publisher side.

However with their granular transparency PMPs give the reins back to publishers, allowing greater control over pricing and powering direct sellers with information on the practices and preferences of their best clients.

A recent PMP success story for PubMatic started when it partnered with IDG UK (International Data Group UK) towards the end of last year to help drive IDG UK’s offering into the programmatic spectrum.

IDG UK is a global technology network bringing together over 280 million technology buyers in 97 countries. IDG UK chose PubMatic as their Strategic Selling Partner to enable its programmatic offering to market for their B2B and B2C properties, such as ComputerworldUK, Macworld, PCAdvisor and DigitalArtsOnline.

Like many of our other clients, IDG UK needed to partner with a trusted technology platform to lead their programmatic trading adoption and help them drive their direct sales into the opportunities around Private Marketplaces.

Key factors for any client, when moving into the PMP environment, are to gain deep control over their digital assets with heightened transparency and the ability to adjust floor prices when needed. The feeling of having the chance to be ‘hands on’ within the programmatic landscape is often needed by the publisher to allow them control and transparency when dealing with their inventory.

IDG UK was quick to realise the benefit of embracing programmatic trading and taking ownership over how and to whom its impressions were traded programmatically. As part of its overall digital strategy, IDG UK’s media services director Dan Shaw quickly identified the need for a specialist to lead their programmatic trading and adoption within their direct sales teams.

“Everywhere you look there are very bullish forecasts about how much the programmatic space will grow. We wanted to make sure we were as close to the market as we could be. And we also wanted to be one of the first Publishers having the conversations agencies wanted to have. A dedicated sales resource has given us the opportunity to do both of these things; we recognised the need to have someone actively talking with all demand partners (and someone who could spend time with Pubmatic) so they really understood the opportunities and could feedback to the overall business,” said Shaw.

By appointing Rob Bradley to work with PubMatic’s EMEA Director of Advertiser Solutions, Duncan Chamberlain, Dan Shaw ensured IDG had a dedicated sales lead to partner with PubMatic.

This enabled the direct sales business to work alongside the Agency Trading Desks whilst complimenting each other rather than cannibalising the sales efforts which led to increased revenues.

Programmatic buying and PMPs equip IDG UK with the capability to control the pricing of inventory by advertiser or segment whilst maintaining direct relationships with buyers and controlling ad quality. This was previously not possible with network relationships.

Throughout 2013, IDG UK will continue to focus on PMPs, extracting higher CPMs and approaching more trading desks, segmenting audiences further with the addition of 1^st and 3^rd party data.

By funnelling more agency spend into programmatic, IDG UK will gain greater control on pricing via guaranteed spends across its premium/audience rich inventory.

“As a premium publisher it is imperative we have control over the CPMs and spend we receive from our core clients via Programmatic Trading. An initial block list led a sales strategy to approach agency teams and trading desks to set up PMPs, with clients we gain direct bookings from and use trading desks. Although the overall PMP market is not as advanced as we would like we have seen great success with some of those implemented. Our SSP PubMatic has been a very valuable asset in setting up this new revenue stream.

“The next few months will see us arranging more PMPs with various demand partners and keep a close eye on their success and impact against direct sales. We see them as a core progression towards Premium RTB. In fact I am already experiencing conversations regarding branding campaigns with higher CPMs than the usual direct response we are used to via RTB,” Bradley said.

Duncan Chamberlain, EMEA Director, Advertiser Solutions, on the benefits of PubMatic Private Marketplaces. 

As the benefits of programmatic trading platforms become increasingly recognised, an ever growing number of publishers are seeking to enter the territory. Standing at the edge of this new frontier, it is understandable that publishers have expressed concern over taking the leap to embrace automated trading. To ease the transition, platforms such as PubMatic, have developed Private Marketplaces (PMPs) – providing a safe, closed environment for publishers to sample the programmatic sale of premium inventory with a selected list of buyers. When trading premium inventory it is understandable that publisher fears have surfaced even within the boundaries of the PMP.  Below I have discussed the concerns that are present amongst the curious yet non-baptised.

The primary concern is that PMPs will inadvertently cause losses to the direct sale of inventory as direct agencies withhold spend from publishers, diverting it instead into spot buying opportunities – which is a time consuming and costly process.

Beyond this, a concern has arisen over pricing scale. An approach to avoid, to retain your inventory’s value, is the use of one set rate for multiple advertisers grouped into vertical categories with tiered pricing reflecting their direct deal strategies. It is essential to scale pricing appropriately whilst maintaining value realisation, this can only be achieved through direct conversion.

Another potential problem when entering the world of PMPs is the serving of PMP tags. When inventory that has been tagged for PMPs is served too early in a user session it creates a displacement cost, the earlier the tag is called the higher the proportional Displacement Cost to the publisher. Displacement cost is the cost implemented to the publisher when switching out one of their Direct sold campaigns to one of a programmatic nature. For example, If a publisher was scheduled to run a Ford campaign at an CPM of £6.50 a campaign with an eCPM >£6.50 must be placed to ensure no displacement cost.

Whilst these publisher concerns over PMPs are understandable they are also unnecessary – if you choose the right supply side platform.

One of the largest magazine publishers, who are one of our clients, began trading programmatically at the end of 2012. Throughout Q4, they found that 19% of revenue generated from its automated exchanges originated from its private marketplace.

This clients experience is proof that premium inventory traded through private marketplaces can and does fetch its true value without the need for time consuming direct sale. Publishers should see this example as a comfort to trialling the automated trade of premium inventory in a safeguarded PMP.

A good programmatic partner understands that PMPs do not exist to leverage unsold inventory at the expense of campaign performance. At the beginning of any publisher/SSP relationship, time needs to be spent understanding where and when PMP tags will be optimally placed and served as not to affect inventory monetisation negatively. SSPs should also work with demand sources to educate them as to where in the user session the users are competing with direct sold agency campaigns – this is known as holistic Yield Optimisation.

SSPs need to ensure demand sources are aware where, within the user session, programmatic trading is occurring to ensure they have a sense of perspective as to the value of the direct sold campaigns their programmatic bidding (RTB/PMP) is competing.

Moving forward, it will be essential that all parties involved recognise that publishers know their audiences better than any demand source. Now publishers are able to segment their audiences to facilitate more accurate targeting. Fundamentally this will level the programmatic ecosystem where Demand Side Platforms and Agency Trading Desks have a lot less pricing controls when buying the data and audiences at source. This leads into the Programmatic Guaranteed or Reserved space where publishers utilise technologies helping expose their premium inventory to the demand side at pre-negotiated rates. Both the supply side and demand side have to move at the same pace – guaranteeing a fair trade.

PubMatic’s Rich Sobel sits down 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.

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.

Q:  You’re one of the few mobile execs to have spent your entire career in mobile.  What do you think you learned about mobile as a marketing medium at your first job?

I am glad that I was first on the account management side at Enpocket, a mobile media company with mobile marketing services, before starting my sales career. I learned so much about the importance of client education, especially as it pertains to new media. In 2006, it was not just about educating the advertiser on why they should invest in mobile but also how to take those first steps to launch a mobile campaign. As the landscape is constantly changing, the education piece has not changed. Some of the first mobile buys I received from agencies were a result of continuous client education and proper expectation setting.

Q. What is the biggest consumer trend impacting mobile advertising right now?

Users are consuming more media than ever before. Because so much of this consumption is taking place on the mobile device, mobile can no longer be considered a “third screen.” We are a generation that thrives on multi-tasking and we are consuming media from different devices simultaneously or within seconds of each other. We watch TV, see a brand’s commercial, and immediately visit that brand’s site on our mobile device.  I love the cross-platform play as mobile stands out as the connective tissue for all forms of media vs. being labeled as a “third screen.” As we heard from many agencies at the recent Mobile Media Summit, companies that can target users cross-platform will impact mobile advertising in a big way.

Q.  What do you think is unique about mobile as an ad medium?

How personal our mobile device is. I do not share my phone with anyone, it’s become more important than my wallet. In some cases, it is my wallet. It’s the first thing I look at in the morning and often the last thing at night. Because it’s always with us, the location piece is essential. If publishers can pass us latitude and longitudinal data we can deliver much more effective targeting, which in turn makes the inventory more valuable. Even national retailers are using location to add relevance to their advertising and layering on daypart targeting. People do things at certain times of day and if you can reach them at the right moment with a localized message, it’s gold.

Q.  What do you think will most impact mobile ad spend which has been lagging compared to spend on other media.

Most of the time, mobile is still the last line item on a media planner’s media budget. There is still the need for continuous education, especially in such a fragmented space. There are new mobile companies popping up daily, new devices, new ad formats…taking a week vacation from reading about mobile trends means you’re already behind. The need for education is still prevalent.

But I believe the biggest challenge in mobile right now is the lack of standardized tracking, both at the mobile media display level and attributing this media to users’ post click actions.  The tried and true way of tracking on digital display is not working across mobile, which is very frustrating to advertisers. Combine lack of unified tracking with privacy concerns in a fragmented space that changes daily and you’ll understand why the investment isn’t there yet.

I’m confident that this industry is too smart to fail and we may all need to work together towards a universally accepted method of tracking that is privacy compliant.

Q.  You’ve been on the agency side. What are budgets like these days for mobile?

It depends. There are some brands with seven figure mobile budgets but average deal size at the campaign level can still average $25 – 50K per campaign.

Q.  What do publishers need to understand about mobile in terms of mobile advertising?

Your standard “desktop” site may look fantastic on the iPhone but publishers need to think beyond aesthetics and understand how users’ behavior is different on their smartphones vs. laptops and even tablets. A mobile optimized site is a must and the functionality and organization of your mobile site will differ from your desktop site. Take advantage of all the ad sizes mobile can deliver beyond just the standard banner i.e. rich media and video. The targeting you can offer advertisers will only make your inventory more valuable, especially if you can target based on a user’s location.

Q.  What is the greatest challenge for publishers about mobile advertising?  

That it’s a fragmented space and there’s always something new to learn. Advertisers and publishers share many of the same challenges, as I mentioned above. It goes back to education…there are a lot of nuances. That’s one of the reasons I think it’s so smart that PubMatic partnered with MobStac, which simplifies the process of optimizing content for any mobile device.  It’s one of the headaches that can now be solved through automation.

Q. What are the most important things you think PubMatic can do for publishers with mobile inventory?

Better understand their mobile assets and increase the value of their mobile inventory. Aggregate demand partners and continuously innovate to stay on top of market trends. I also would not downplay the service aspect.  At PubMatic, we provide insights into the bidding environment because we live and breathe it every day.  The mobile team is made up of true mobile experts who really understand RTB.  The reason I came here is that I see the promise of RTB for mobile.   I’ve been working at different mobile ad networks for some time and advertisers want to talk about RTB. I wanted to work at a company that really gets it.

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Have a question for Heather we haven’t covered here?  Leave a reply, question or comment below.

… 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 5^th 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.

By Manish C. Tayal, Ph.D., Vice President, Analytics and Algorithms, PubMatic

We’re all supposedly working towards a programmatic future that enables higher quality (guaranteed) inventory to be purchased through Sell Side Platforms (SSPs) by Demand Side Platforms (DSPs).  But to date, the pricing achieved has not encouraged premium publishers to cross the boundary of putting more of their best inventory (now typically direct sold) into the marketplace.  The essence of programmatic buying is liquidity and we just don’t have it, despite the rapid growth of RTB. In my role at PubMatic, I have seen this scenario time and time again and it’s struck me how limiting it is and how it’s something that we could solve for the market.

As an example, there are thousands of brands who buy programmatically, yet all those buys happen through less than 50 to 60 DSPs where only one bid is allowed through each system at a time.  What’s more, two-thirds of spend is aggregated in the top 5 platforms.  The current scenario treats programmatic buying as if it is a one-to-one relationship between the impression and the advertiser when it should be a one-to-many relationship.

The solution we at PubMatic have created is a multi-bid RTB environment.  The problem of advertiser liquidity and publisher revenue opportunity can be fixed on our platform and we can move towards a joint (advertiser and publisher) optimal ad allocation decision for each impression, while taking into consideration seller and buyer preferences and incentives. The platform enables DSPs to provide multiple best offers or “bids” from various advertisers instead of a single best offer.

Multi-Bid RTB overcomes the limitations of RTB as it is today, encourages the growth of private marketplaces, maximizes overall monetization value per impression for the benefit of the entire eco-system. The increased CPMs will motivate publishers to provide greater access and transparency to their premium inventory in return for better monetization via multiple offers from bidders.   Advertisers would find more success in purchasing the media and audience they are looking for at the price they are willing to pay for it. When buyers gain access to premium inventory and are not limited to local sub-optimal auctions internally, they are more willing to spend aggressively to meet campaign goals. It’s a winning scenario for all.

For the complete scenario of how a multi-bid environment operates through PubMatic, see www.pubmatic.com/reports