An incredibly joined up BCG study between ZO, Performics and VivaKi focused on the benefits of a unified platform and advanced targeting. A combination of strong partnership and strategy achieves very strong results.
In 12 months the Ad tech market place has gone totally crazy, impossible to keep track of it all and the money invested is off the scale, but below I highlighted a few stories and events in the last 11 months that I noted. I will have missed others for sure!
There has been some negativity around the space with transparency being a hot topic and whether advertisers want to take this all in house, but those headlines have distracted from some incredible market changing investments, purchases and alignments. Enjoy the reminisce!
The Partridge in a Pear tree for Yahoo was Enrique Decastro, bringing him in on a huge salary and being presented as a saviour for the organisation, driving sales and value for the business. Unfortunately January saw that particular partridge being shot. Quick acting by Marissa to be fair to her, but an unlikely choice in the first place according to many. More recent news has seen Lisa Utzschneider fill that space, coming in from Amazon.
In other news Turn receive their belated Christmas present raising $80m as they march on as a leading DSP in the market and looking to expand beyond that descriptor and moving more towards a wider DMP, services model, some might call agency model.
Holy F*** February
February was IPO crazy month with Pubmatic rumours, Rubicon filing, Rocketfuel all taking the plunge – some big valuations were banded around and it was the month everyone realised that the good times were back and the VCs were starting to spend all that cash they had been hoarding through the bad times – the bubble is inflating. Google buys another company, on the back of Deepmind in January, a London based machine learning company, called Vungle. We have seen the signs but Oracle buying Bluekai was a big flag being waved to show that the digital media business was being taken seriously by the cloud and consultancy companies. We also saw round one of TV disruption being won by the old school with Comcast getting Netflix to pay them for streaming services, the upstart being slapped into place.
But all the IPO business paled into insignificance when the world collectively went ‘what the f*** app’ as Facebook put down a multi billion dollar offer for the social messaging app. Cue the hand wringing about lack of revenue, too high a price from the digerati turned incredible commercial strategists. Facebook are clear on this, show us something growing fast and taking share and I will show you my cheque book (or should it be Visa Debit Card). Scale is everything in a world where data and the identification of people and what they are doing and where they are doing it becomes the most valuable asset. Or perhaps Mark is hoping to achieve the same status as Steve Jobs who was approved to appear on a US stamp that very same month.
March saw a number of moves for the future by different companies. Comcast bought Freewheel, a clear indication they are gearing up for a programmatic, data led future and could not resist the tide any longer. At the same time AOL One launched to much fanfare – the Game of Stacks now well underway with AOL taking a big step forward, We are but pawns in this incredible battle of supremacy between AOL, Facebook, Amazon, Twitter and Google and there is much more to go as we see this play out. The single view of the customer across screens is a vital offering and these teams are throwing everything at it, whilst Microsoft seems to be frozen to the spot at the moment. Perhaps they need to remove their whole sales team and start again? Oh..
Finally in modernisation March we saw Conde Nast take the stage and announce proudly, albeit a few years late that they had decided that yes programmatic was something to pay attention to and they would be getting involved. Thanks for that.
The first signs of trouble for the IPOs of the previous months – the city falling out of love with a number of them, seeing prices fall significantly and some below opening day. There was some scepticism at IPO but recent press questioning whether these companies were right to value themselves on the hard work of bot traffic came into play. As the curtain lifts on the methods of many RTB companies this may be a theme for the future, perhaps even hitting the FT one day…oh it did.
RadiumOne saw some ‘Rocky’ waters as their CEO was eventually prosecuted for beating his wife up. It took some time and a fair amount of industry Twitter rejection to get him ousted but it happened and then everyone moved on as he set up Gravity8 three minutes later.
As if to demonstrate two different strategies Facebook and Google both made a play for the future with Facebook launching an…. Ad Network..meanwhile in other news Google bought a drone company – was it an April Fool? well after Nest in January and now a drone maker it appears not – Internet of Everything anyone?
Merger May, Maybe not
Publicis and Omnicom call off merger. Must be something else they can buy sooner or later surely?
Millenial and Rocketfuel taking an absolute beating on the stock market as increased speculation on their businesses and whether or not they are complimentary or in conflict with agencies rage. Google and AOL keep buying companies to further enhance their operations, Google getting into attribution and AOL into cross channel allocation, interesting that both are now toe to toe on making the stack work. It was a month where everyone appeared to be tooling up with Axium buying and Liveramp to help with data onboarding.
What is the worst brand name in Adtech? Qriously of course. Apparently that was not all bad and brought some pre Cannes exposure coupled with their expensive tablet card asking for a meeting. Memorable but expensive I would say, some might say a qrious decision.
June was the month GroupM announced a withdrawl from open exchanges and that it would be done by Christmas, big claim for sure. Could someone check for me? pretty sure they are still there but there is still time. As with every year Cannes came around and the Adtech world took it by storm – the rose looked and tasted the same, the beaches were packed with hard working media folk but the names were different, everyone had upgraded this year and the place now resembled an Exchangewire event at scale. It was a good time to be in Cannes as the money continued to flow and pay for those expensive tents and lunches. Mediamath picked up a massive 170m dollars, Twitter bought Tap commerce for 100m, Facebook bought slingshot and WPP ploughed 25m into a DMP strategy.
Buy buy July
Enough said, the boom continued and at pace. Facebook buys Liverail as its next move in Stack Wars, Yahoo buys Flurry to continue its successful push into mobile revenues, a battle it appears to be winning as we are seeing now as it overtakes Twitter in mobile revenues. Linkedin bought Bizo, a natural fit for both and makes us wonder if the sleeping giant is starting to wake up and join the fight.
Rocketfuel bought the very transparent X+1 as it starts the long road away from the darkness and into the incredibly difficult world of running a business transparently. In the spirit of transparency Turn took a turn in July and went on the offensive, taking aim at Tubemogul amongst others, it felt like an email you send late at night when slightly under the influence – stand away from the send button. Oh no, you did again..in August.
Everyone went to the beach. Google bought some more companies.
Facebook me September!
Millenial fights back and buys Nexage to grow out its programmatic credentials and build credibility in the data and RTB space. At the same time WPP drop their adserving business and buy into the DSP business, out with the old in with the new.
The Alibaba IPO put Yahoo into a very interesting position, as perhaps a buyer or maybe a seller? There is a strong belief that Yahoo and AOL are on a collision course and so having their P&L filled to the rafters with the Alibaba IPO cash will put them in a great position either way.
But really all everyone wanted to talk about was Atlas and the launch of their new adserving platform and soon to be launched DSP. Facebook had now made its biggest move in the Stack wars. Combining improved adserving tech with their data and soon to be launched DSP. With this move we see ever more clearly that there are likely to be some large islands of tech and everyone of those is ring fencing owned and operated inventory and how you access it. We have moved a long way from the utopia of one access point to the web and are now focused on how can we join these islands up with DMP and other technology.
Publicis buys RUN and invests in Matomy – something to expect as we progress and competition comes not just from other agency groups but also the very aggressive managed service offerings and RTB networks. Agency groups will need to tool up more and more and so I think we can expect more down the road. Mediamath go to prove the point and buy Upcast showing how they need to tool up as well and keep delivering new products and services cross channel and cross device. Meanwhile Videology launch a programmatic TV offering to follow Turn but go a step further in teaming up with major US TV partner.
Stack Wars is back in October with Yahoo buying Brightroll, a sensible move as you consider the purchase of Adapt by AOL and Facebook of Liverail a couple of months earlier. We now see them all with video offerings, display offerings, adserving and performance products and suites of data. I think we are about at the right time to see them kick off. Atlas has hired a key guy in Damian Burns to lead their offering, once he has his feet under the table I think we will see some real movement.
Publics buys Sapient a huge acquisition and another one under the radar taking the advertising world by storm. An incredible team of people joining the Publicis.Sapient platform.
Channel 4 after years of resistance to programmatic have announced they are getting into the market place and will no doubt leave ITV where to go next. Either way it is clear the TV marketplace is hotting up and now we are seeing a hockey stick of activity and partnerships. Exciting times all around.
Rubicon buys two companies to help build out its direct deal automation tech..yawn. Yes you got it, we are going to take all those buys you used to do over the phone and now do it on a platform without any cherry picking or data insights. Just back to buying impressions. Back to the future.
I am sure I missed a number of big deals – list them below so we get the full picture of the comings and goings of Adtech and its sheer scale. Thanks
I am passionate about how we cannot let this scycle of ever decreasing cpms continue and I lay the blame at all our doors, agencies, advertisers and auditors. Exchangewire covers this topic with contributions from me. Original article here.
Click fraud has undoubtedly been one of the topics of conversation in the programmatic advertising sector in 2014, with Google’s purchase of UK-based security specialist Spider.io just one of a number of industry moves underlying its growing importance.
Last week Rocket Fuel was fingered in a FT article highlighting its prevalence in the industry (of course it was quick to rebuff the article’s assertions), but the entire advertising – from client-side marketer to third-party ad tech vendor – must accept their role to play in allowing it to continue.
This comes on the back of other articles in mainstream press – for instance a Wall Street Journal article claiming that up to a third of all web traffic is “bogus” – pressing the issue further for the online advertising sector to improve transparency over media buys taking place via automated channels.
Moves to tackle the issue of click fraud (or bot traffic) began to gather pace last year when the IAB’s US chapter established the Traffic of Good Intent (TOGI) Task Force, in a move demonstrating that programmatic ‘media trading’ sector was maturing as braces itself to become a mainstream player, as opposed to an emergent force.
In fact during the last two weeks alone Dstillery announced it was received a patent for its fraud detection technology from the US Patent Office, this follows the news that the similarly named Distil Networks’ bagged $10m in Series A funding just last week.
More recently, the Alliance for Audited Media (formerly the Audit Bureau of Circulations) announced it was absorbing fellow auditing service ImServices.
So while it is clear that there is a near universal intention to wipe out such practices, but it’s probable that the fraudsters will always be on step ahead of the industry’s security brigade byinventing new ways to game the system (some fraudster techniques are quite comprehensively discussed here).
How can individual parties minimise the impact of click fraud?
But that’s not to say that measures cannot be taken to minimise the impact of online ad fraud, and with this in mind, every tier of the industry has to take their share of the blame in letting this happen.
As discussed in previous articles in ExchangeWire everybody has their part to play in minimising the detrimental effects of elements of the ‘bad internet’, and if parties are proactively taking measures to improve things, then they’re part of the problem.
Speaking previously with ExchangeWire Dr. Thomas Servatius, IPONWEB, head of client services, identified that the rise of the programmatic industry had allowed fraudsters to thrive online, with the scale of web traffic allowing rogue players to put sites which generate traffic by non-human means on ad exchanges.
“The problem is that when an advertiser buys traffic on a fraud site, it usually comes very cheap – much cheaper than human built sites [thus opening the opportunity for arbitrage from third-party players and media agencies] – and it has good click through rates.
“So if you have fraud in your advertising mix, what you see as an advertiser is that for a small amount of money, you get a good number of clicks,” he explained.
Explore what will KPI’s look like in a post-click fraud market?
He went on to further relay anecdotal evidence of the internal dynamics that encourage brand-side marketers (the people who are ultimately being ripped off here), from concealing the issue.
Indeed Cameron Hulett, Undertone, executive director, EMEA, further explains that such is the scale of the problem that most campaign benchmarks after a “post click fraud market correction” would be largely redundant.
For instance, most marketing KPIs, such as reach and traffic are drastically inflated by bogus web traffic as it currently stands, causing problems for parties on both the buy- and sell-side alike, contends Hulett.
Hence, it is in the interests of a lot of parities to let this white elephant in the room to go unaddressed, according to some.
Prioritise quality over cost-cutting
Marco Bertozzi, President Audience On Demand EMEA and North American Client Services at VivaKi, argues that the entire industry is incentivised to prioritise lower CPMs (ergo poorer quality inventory, or even bot traffic through long-tail exchanges and networks) instead of quality content (where prices are higher).
“I think educating marketers on the importance of paying more for quality inventory will need to happen because the buy and the sell side are chasing KPIs determined by said client who may be calling for lower CPMs versus quality interactions,” he says.
“If the only metric focused on by auditors and advertisers is lower cpm, then that’s where everyone will focus – turning a blind eye to the lack of quality and transparency but being happy that a lower CPM was achieved.”
Auditing has not kept up with the pace of change in the Ad Tech space. The industry still clings to CPMs and not the value of the impression and what it can deliver, according to Bertozzi.
“If you look at Search, if standard auditing metrics had been applied to search advertisers would not use it and spend would be non existent as agencies would be told to suppress the CPC. The same now applies to display, it is an auction environment and yet still they want to drive down on cpm,” he adds.
Explore alternatives to CPM pricing and last-click attribution
Meanwhile, Julia Smith , a partner at consultancy firm 614 group, and acting MD of Evolve Media, argues that exploring alternative pricing models to selling media on a CPM basis, can make it easier for advertisers and their security partners to detect non-human generated traffic.
“A lot of people are all about the click, and in particular its a problem with the long-tail of sites [meaning non-premium ad networks and exchanges are a particular problem in this regard].
“We can start looking at alternative Using a cost-per-engagement [pricing] model could play an important role in combatting this. While it’s not perfect it can make it harder for click farms to replicate human behaviour.”
However, as mentioned earlier in this piece, fraudsters are just as industrious in their attempts to stay ahead of the security elements of the ad tech industry, with their techniques growing evermore sophisticated.
Sources consulted by ExchangeWire also argued that one fundamental flaw in the ad tech sector that lets poor quality traffic be traded on ad exchanges and networks is the prevalence of the last—click attribution model , which incentivises the entire industry to chase the last click.
Adit Abhyankar, Visual IQ, executive director, says: “Incentives drive behaviour. this is common sense. So if flawed attribution leads to flawed allocation of performance credit, which then leads to incorrect incentives, you can bank on the fact that, it will also lead to bad decisions.”
Meanwhile, Marco Ricci, Adloox CEO of content verification firm Adloox, argues that looking at at specific domains on ad exchanges and networks, for statistics such as CTR per domain and by publisher, is a more sophisticated method of detecting bot traffic.
AOD’s Bertozzi adds: “Attribution, econometrics, understanding business impact will all go a long way to removing an obsession on lowest cpm. It will also focus on the fact that advertisers should be challenging media partners to show where they are advertising line by line. If you have to be transparent about the media placement, you are less likely to buy the long tail.”
Employing sophisticated vetting techniques
Those ad tech players looking to perform blacklists [of sites that are known to have traffic generated by non-human traffic] should perform check such as clickthrough rate (CTR) per domain and by publisher, CTR vs conversions, and CTR vs IP addressees are all useful metrics, according to Ricci.
“We check clicks made in less than one or two seconds we can catch fraud – blink and you’ll miss it. Essentially our clients want a more granular level of transparency than the majority of the market offerings today.”
Bertozzi also argues that those players on the buy-side need to do more to improve the reputation of the sector. He adds: “We provide a rigorous vetting process called VivaKi Verified, which thoroughly evaluates media, data and tech partners to ensure that they meet our standards when it comes to brand safety, consumer privacy and client data protection.
“Rather than buy in the murky pool, we use means to avoid the problems, don’t buy in the murky pool at all.
“We have also a proprietary Quality Index that combines the [safety] signals from partners like comScore, Google, Integral Ad Science and Vindico to all the URLs we have in the AOD marketplace creating our own score.
“Metrics and standards aren’t there yet and adoption needs to happen on a larger scale, but the cost of viewable ad impressions will go up and we need to be prepared to pay them to ensure that better brand-to-consumer interactions are happening. If the only metric is cpm, we are opening up the business to gaming the system.”
So the fact is, regardless of which statistics parties in the ad tech industry subscribe to, as to the extent of the problems of bot traffic, it remains clear that more can be done to address the issues of click fraud.
Those that choose to ignore the problem (for whatever means), are helping to propagate it.
My piece on Digiday outlining the threat of Ad tech disintermediation. First posted here.
I remember sitting with a founder of a well-known demand-side platform a few years back (feels like a lifetime), and he was warning me how the evil Google would disintermediate us all and destroy the agency trading desk business if we were not careful.
The irony now is that the worst culprits of all are the new, up-and-coming tech vendors who are chasing the direct-to-advertiser relationship at any cost.
As an agency, allowing a DSP or real-time bidding ad network to control all the programmatic spend may seem the same as giving an insertion order to an ad network, but it is far from that. The rules have changed with the rise of ad tech. Our whole business is based more and more on data. We need to manage, explore, test and learn with data, and the data needs to be held at the hands of the agency running the wider business, or remain in the advertiser’s hands should they choose to take the process in-house.
To release tens of millions of dollars to a managed service DSP is to release all of your intellectual capital to an external company where the same rules expected of an agency may or may not apply. We see clear benefits when we are able to apply the agency learnings to all the programmatic opportunities. Whether we are looking at cross-channel attribution, econometric modeling or online and offline synchronization of media spend, we can make activity work so much harder in that context — and tie it back to the advertiser’s own data whether on or offline. A third party, or siloed business, simply cannot do the same.
Agencies take heed: This is no longer just a question of outsourcing some digital buying but rather the outsourcing of your agency role and intellect to a third party. You may not recognize the danger, given the modest level of programmatic spend relative to massive TV budgets. But when this spend drifts away, a little bit of control goes with it. Not a good situation given the projected growth of programmatic.
Take a lesson from search. Two things happened in search that made it one of the biggest battle grounds of the agency world through the mid-2000s. The first was that the agencies ignored it when it launched, and the second was they fought tooth and nail to get it pulled back into the agency when it had grown into the mammoth beast that it is today. Today’s DSPs are yesterdays search villains.
An agency digital lead should fight to keep the programmatic business close. Yes, I am biased toward a relationship with an agency trading desk — not just because data-driven, programmatic buying will be the lifeblood of the future media agencies but also because the right agency/trading desk relationship is better for clients.
An advertiser might be attracted to cheaper options. A siloed, third-party provider might “feel” unbiased. But what happens when the market moves (which is does every day), and that marketer is tied to a single provider. They move at the the speed of the provider. Or they pay the significant switching cost. Yes, DSP technology evolves. But their lack of access to the ideal marketplaces may leave an advertiser handicapped. And how will the marketer know? It’s hard to measure performance without any comparison or opportunity to swap (short of making an extensive investment).
The agency relationship should give clients cross-platform, open access to all opportunities — and objectivity. Trading desks should deliver the benefits of relationships, learnings and experience with all of the best DSPs, plus perpetual evaluations of new and evolving partners. They must be able to provide the brand safety, starting with basics like full disclosure on where ads are appearing and how much of your budget was spent on media. It is fascinating to me that Rocketfuel discloses 60 percent margins and there are no concerned glances from advertisers. Really? 60 percent?
I have been warned all my life that Google is the bad guy, but it is becoming clear that as the story unfolds, we are seeing a very different picture. The VC-fueled pressure cooker we are in at the moment is creating disintermediation on a grand scale or at least the potential of it. And agencies and advertisers should both see that there is a major role for their partners in helping them steer through this time so that we don’t walk blindly into a repeat of 2001-2008, an era that both agencies and advertisers regretted longer term.
A video that outlines Audience On Demand and programmatic buying more generally.
My ten minute presentation designed to trigger some discussion in Turkey about RTB and programmatic.