At a time when most of the established video-ad players are looking to serve as marketplaces catering to both buyers and sellers, LiveRail is strictly focused on publishers.
The 6-year-old company, which began life as yield optimizer for publisher video inventory, now offers a broader set of supply-side platform tools. Sixty percent of the 4 billion impressions LiveRail processes every month come from programmatic channels, double the amount it served a year ago, CEO Mark Trefgarne told AdExchanger.
"A lot of people miss the fact that programmatic is not a question of premium versus midtail, it's just about efficiency and reducing operational costs that make online advertising sales more expensive than they should be," Trefgarne said. "In that sense, we make it easier for advertisers and agencies to spend on brand advertising for the publishers we work with."
In tandem with the growth of its programmatic services, LiveRail's staff has more than doubled from roughly 50 employees this time last year to 110. Much of this growth has been on the product and engineering teams, plus the building out of its New York office. The company also recently opened a London outpost and expanded its Australian business.
LiveRail's expansion comes at a heady time for video-ad technology providers. Much of the industry's attention this week has been on video-ad network and analytics provider Tremor Video, which went public Thursday.
Asked whether LiveRail, which has raised $12 million since opening its doors, has any ambitions to go public, Trefgarne was quick to say no. But the Tremor filing is certainly on his mind, he said, and does suggest that, whether the stock soars or tanks, this is an auspicious moment for the digital video-ad industry.
"The impact of their IPO will be felt well beyond the Tremor offices," Trefgarne said after the filing. "Whether it was their intention or not, they are being viewed as the bellwether for our industry. All eyes are on their stock's performance, today and over the coming months. It will either open or close the IPO market for other video-ad networks and will be viewed as the go-to comparable when pricing private market deals for other ad networks in video and mobile."
Tremor has had a very light involvement in programmatic, Trefgarne said, although Tremor might say it is "agnostic" when it comes to demand-side platforms and SSPs. In our conversations with Tremor executives, they said its mission is to provide analytics to tell buyers and sellers how inventory will perform, leaving it to those two sides to work out the best method for transacting a deal.
Trefgarne believes there's no middle ground when it comes to programmatic. "To improve their growth and hit the numbers the street will expect, a strong strategy to engage in programmatic will be essential," he said. Nevertheless, Trefgarne doesn't expect LiveRail's business to ever be 100% programmatically based. But he does foresee a time, sooner rather than later, when 80-90% of its business is transacted that way.
Looking at the wider competitive landscape, Trefgarne said LiveRail's opportunity is in being different from Tremor, Adap.tv, YuMe and Videology, which offer end-to-end tech services to buyers and sellers. It also stands apart from TubeMogul, which primarily concentrates on the demand side.
"A couple of years ago, when we first started, the video-ad market was smaller, less standardized," he said. "A company needed to sell to every part of the ecosystem, from agencies and trading desks and marketers to publishers, in order to build a good-sized business. We've reached a point where the market is larger, more mature and more competitive. You need to be the best at one thing in order to differentiate. And that's as much about choosing what you don't do."
By focusing on publishers, LiveRail believed it could create more unique ad-serving and audience-measurement tools. We spoke with three clients, all of whom said LiveRail had more credibility in proffering programmatic services, such as developing private marketplaces, since it wouldn't be serving demand-side interests at the same time.
"Video private exchanges are yet another way to create an avenue for premium dollars to flow," said Alanna Gombert, senior director for programmatic and trading at Conde Nast. "They provide a seamless extension to our direct-sales efforts and allow us to price at rate card, while transacting in safe and controlled environments."
At the same time, the single-minded publisher focus allowed it to more easily partner with companies like TubeMogul and Turn.
"We only make more money when a publisher makes money," Trefgarne said. "And we have great relationships with Turn and TubeMogul because they know we're not going to go out and circumvent their work with advertisers and agencies."
Right now, LiveRail is working on developing its partnership with Nielsen and the audience-measurement company's Online Campaign Ratings. The deal offers LiveRail's publisher clients the ability to plug Nielsen OCR data into their dashboard, allowing them better insights about matching advertisers' audience targets with Nielsen's data on those same segments.
"Nielsen OCR has been a difficult adjustment for premium publishers in terms of dealing with issues around overdelivery and on-target guarantees," Trefgarne said. "We introduced a branding tool with Nielsen that helps publishers get more granular measurements and better forecast what parts of their audience overlap with Nielsen OCR. The idea is to better help them plan what audience segments they can best sell guarantees against."