AdExchanger.com: Can you give us a sense of business momentum currently at Brand.net? Any surprises?
EB: We've been trafficking campaigns for 12 months. Our target market is the Ad Age 100 and to date we're right on target, with the majority of our revenue coming from that group. On the "surprises" front - we've had more and earlier success than we would have anticipated with the CPGs; 7 of the 10 biggest have worked with us already. Also, budgets have been larger than we forecast, each quarter average order size has been over $100K. What all of this tells me is that the biggest Brand advertisers want to use the web as a - eventually the - mass media for Branding. When the internet finally offers them the ability to do that well, scalably and efficiently (as it has done for years for direct response (DR) advertisers), their Brand budgets will move online.
How do you define "premium" inventory?
The word "premium" is at best imprecise and misused. We see agencies and end clients focused on "quality", which in the modern era requires two elements. First, (a) top comScore sites, where publishers continue to invest in delivering a very high-quality user experience and users recognize and reward that with their visitation and engagement. Second, (b) the page-by-page experience itself. Over the past five or six years, you have seen virtually every publisher aggressively thread UGC throughout the content (professional edit) experience. Often this occurs as user-posted comments below articles. The stated goal is to increase engagement - the unstated goal to increase page views - whatever the reason it has dramatically complicated the purchasing experience for Brand advertisers just as they were gearing up to move more Brand advertising online. Brands are very sensitive about inappropriate text and/or images appearing on pages where they place ads, especially so if their ad is directly adjacent to that content. Our SafeScreen product, launched in Q109, allows us to do page level content filtering - which gives advertisers "cleaner" experiences than if they bought directly from those publishers. This is not a trivial problem (nor an easy one to solve technically); we've already screened out over 25 million impressions that came from the highest quality publishers, in the content channels most popular with Brand advertisers. So (a) top sites and (b) safe page-level environment = quality to us and to our customers.
Where are the brands and their budgets? Do you think brand marketers see digital as direct response-focused?
Today, 95% of Brand budgets are spent offline - so in TV (even though the most attractive viewers are the most likely to use DVRs and skip commercials entirely), in print, etc. Brand marketers are smart - they know that spending 5% of their budget where their target demographic is spending up to 40% of its media time is a recipe for trouble. Beyond spending too much to reach too few, they flat out are failing to reach the people they need to buy their toothpaste and shampoo, cereal and soda, movie tickets and DVDs, cars and vacations. I think Brand marketers see digital as frustrating. They see it working brilliantly for their direct response counterparts - scalable, efficient and effective. But to buy Brand online the way they need to do it, they have to go publisher to publisher to publisher executing individual buys, then frantically try to "pull it all together" to make sure they are achieving their composition, reach, frequency and pacing goals. It is incredibly difficult to do this even across a couple of publishers at a time, and even more so to do it all contemporaneously with the offline (read: much larger) portion of the campaign. The final insult is that even though Brand advertising in the US is almost twice as large a business in dollars as direct response - and other mass media put the biggest and best, most scalable opportunities in front of the Brand advertisers - online we tell the Brand guys to get over it and use direct response tools and networks built for direct response. Again, when the internet finally offers Brand advertisers the ability to do Brand advertising well, scalably and efficiently, their Brand budgets will move online. That, of course, is what Brand.net is focused on doing.
How do you assure publisher partners that you are not "cannibalizing" their inventory?
I think what you mean here is channel conflict. I spent most of my career in publishing - first in the magazine business, then 9 years at Yahoo! I am passionate about great content. No advertising supported major media has ever supported great content without access to material amounts of Brand spending. So I assure publisher partners that I won't cannibalize them in a couple of ways. First, I tell them to sell every possible ad impression they can directly, using their own sales force, indeed right up until run time. To take the highest margin dollars they can get. But for several reasons (inventory volatility, supply/demand imbalance, etc.) no publisher ever sells everything and my goal, then, is to be their partner of choice. When they say "who can step in real time and monetize my unsold inventory" I am there with guaranteed spend from top quality Brand advertisers, with high end creative and better CPMs than they can get from direct response. This gives them the most money for any excess inventory which, again, allows them to continue to invest in delivering high quality user experience. Finally, while my advertisers know I only run on the top comScore sites in each content channel, they also know we don't disclose what sites they ran on and in what combinations for their specific buys. I am very proud of the great relationships we have with the best content sites online and I'll continue to do everything in my power to help them grow their businesses.
Can you see challenges developing in the agency model? Rapidly evolving technology is hard to chase for a service business, no?
I've seen the advertising agencies evolving their model and their business very rapidly over the past few years, in response to massive shifts in media usage and, then, the current economic environment layering on top of that. With these massive concurrent shifts, there has never been a bigger need than there is today for Brands to have a trusted advisor partnering with them to drive media strategy and buying. That's the role the agencies are uniquely suited to play. Do agencies need and use technology to do that? Absolutely. But I do think their business sweet spot, their emphasis, and their business model is going to focus on portfolio management - first, on cross-channel media allocation decisions, then on monitoring and thus driving best execution by vendors who are best in class across their disciplines. So the technology they will emphasize is the technology that allows them to do that portfolio management incredibly well. The big holding companies have and are enhancing those capabilities, and are actively working with Brand.net and our peers to evaluate which will make their shortlist of preferred provider partners.
Would you ever consider buying from exchanges? Under what circumstances?
Yes. We do work with exchange technology platforms when our direct relationship with the publisher enables us to know with 100% certainty what we are buying and using that platform provides operational efficiency for both the publisher and Brand.net.
What's closer to the value proposition for Brand.net - that you offer brand-safe inventory or you are experts at building brands on the Web?
We are experts at building Brand campaigns on the web. Let's be clear - we are not a creative agency, and we don't do cross-media strategy and planning. Once the client and agency decide what the right message is, and that the web is a big part of where they want that messaging to occur, we step in and get that Brand message out in the highest quality online environments, with tightly managed campaigns, and clear Brand-focused intra- and post-campaign metrics. So offering Brand-safe inventory is certainly a core competency of ours, and a critical element of our value proposition, but only one piece. It's pulling it all together - efficiently, effectively and at scale - where we deliver value to the Brands and agencies.
Do you ever provide a site list to buying partners? How do you handle this request and assure brand safety?
As I discussed above, our advertisers know we only run on the top comScore sites in each content channel, and they also know we don't disclose what sites they ran on and in what combinations for their specific buys. We may provide comScore data or examples to help buyers understand what types of sites constitute a "channel". All Brand.net media runs through SafeScreen, our page-level content filtering system, to assure the safety of our advertisers' brands.
If you were a young media planner, buyer or seller (network side) in the digital media space, how would you proceed so that you develop key skills for a successful media career? Any suggestions?
As I said above, I think the elite agencies of the future will be true media portfolio managers, planning and executing cross-media strategies. So young people should focus on learning strategy and buying top to bottom, and across multiple media.