AdExchanger: Is BrightRoll an ad server?
TOD SACERDOTI: We historically have really tried to stay away from any acronym definition of our company. If you want to build a viable, long-term standalone business, you need to be unified across buyers and sellers, which means you need buy side tools, sell side tools and a marketplace where they can transact. That’s really where we’ve been focused on building products. It’s interesting with some of these point solutions where people say, “Well I’m only focused on one side of the business” and then they’re acquired and their story immediately changes, but the reality is, in the end, anyone who’s going to be competitive long-term will have buy side and sell side tools under the same roof. Facebook now has that in video. Obviously, Google has it. And we’ve been focused on building an alternative stack to Google for a long time. We have buy side tools, sell side tools and we do serve the majority of the ads on our platform today.
On the buy side, are you primarily self-serve or a managed service?
We offer both self-service and managed service structures on the demand side. We don’t disclose the percentage, but we have hundreds of entities that use our platform self-service, so we have a really robust self-service business. We’ve announced some large brands and agency customers and a huge amount of ad tech companies that use our platform self-service as well. We think we’re a world-class video DSP platform if you want to put an acronym on it.
On the supply side, do you enable yield management for publishers?
Within the marketplace portion of the business, we have primarily focused on companies that are building out server-to-server marketplace infrastructure. The companies we have always been most competitive with have been AOL’s product through the acquisition and Google’s AdX. The three of us have been the companies that have invested the most heavily in global RTB infrastructure worldwide. Then, on the pure publisher tools side where you’re doing things like ad network mediation and yield management and access to programmatic demand, we have some capabilities in that area. That is the area where of the three, we’ve spent the least amount of time thus far, but we think a huge amount of the marketplace traction we’ve experienced is driving demand there, too.
Are video SSPs, like display SSPs, referred to as “big exchanges”?
There are far [fewer] players in the video ecosystem. I usually separate the players that are building out server to server programmatic exchange infrastructure from everyone else. And the number of players that are actually integrated server to server with the buy side globally is very few. Somebody who builds publisher tools that has no server to server infrastructure to me, is a less significant long term player than somebody who has built out that structure and integrations. So there are similarities, but I don’t think of them necessarily as the same.
Can you describe your relationship with other buy-side platforms?
I don’t think this is different than display. On the buying side of our business, we’re absolutely competitive with any other buying platform, be it pure play video or a display-buying platform that offers video. On the marketplace side of our business, we sell essentially to every programmatic video buyer – competitors and non-direct competitors. We aren’t buddying up closely with one or two players for collaborative deals. When there’s a platform opportunity on the buy side, we compete seriously and hope to win every opportunity and when programmatic buyers in video are onboarding supply, we will actively work with everybody.
I don’t know of any major programmatic buyer we don’t work with today, including TubeMogul and Google and everyone else. I don’t think that’s different than Appnexus’ relationship with the programmatic buyers in display. They want trading desks and agencies and brands to use their platform and if they’re not able to win that deal, they’d love to sell programmatically to Rocket Fuel, Mediamath and everyone else. I don’t view it as a different model than display.
What’s your take on Facebook’s acquisition of LiveRail?
I think there’s a huge perception and we’ve seen this happen at least twice where (digital) companies (acquire video) … that was the basis of Specific Media’s acquisition of Vindico and AOL’s itch for Adapt. There has been some comparison of Facebook’s acquisition of LiveRail – [that these companies will be the ‘DoubleClick of video.’] There is a DoubleClick of video and that company is DoubleClick. DoubleClick is a major publisher ad server in the video ad business that’s often discounted, but they’re a major player in the ecosystem.
The company that’s most likely to be the DoubleClick of video is FreeWheel, which was acquired by Comcast. So the sort of positioning that these companies are “buying the DoubleClick of video,” I don’t think has any base of truth. The majority of premium supply on the publisher side are ads served by DoubleClick or FreeWheel and has been for at least five years. I think there’s a little bit of a misperception around the publisher ad serving business in video.
So every digital ad tech company will need to build or buy their way into the video stack.
Look at the number of companies who do hundreds of millions of dollars in online advertising and don’t have a video advertising stack and there’s a list of places that would make sense [for acquisition.] Every digital advertising company needs a digital video advertising stack.
Let’s talk about private marketplaces.
A year ago, we saw almost no sort of activity and now it is the single most talked about product on the buy side. It is early, but it is very real. If you are a brand today and all you do is take your existing media buy and move it to a programmatic platform, but you buy all the same inventory you would have bought before, that is the most simplistic definition of a private marketplace and you would immediately see benefit as a result. For folks who are new to programmatic or tentative about programmatic, private marketplaces are sort of the easiest first step and are a huge generator of potential value. We’re definitely in the millions of dollars of media flowing through private marketplaces, so it’s absolutely happening.
Why now? What’s the brand marketer benefit?
The three lowest hanging fruit in private marketplace for a brand offer the understanding of cross-site frequency or over frequency, so you can do a global frequency cap. Even if you’re not tapping, you can see the over frequencies publisher by publisher. You can begin to lift in-target efficiency by seeing that spread across publishers and being able to impact it. And lastly, as you start changing the way you’re buying from traditional I/O buying to private marketplace tools on platforms like ours, you’ll instantly see double-digit percentages in savings. Even at the most baseline, elementary version of a private marketplace, we think there’s 30-50% efficiencies for brands, so it’s easy to understand why that’s their top area of focus.
What is BrightRoll’s take on mobile video? Is demand matching supply?
I think we’re the largest supplier of server-to-server mobile video in the entire ecosystem. We have pretty good data about what sources of inventory are performing and at what pricing. It’s still early and it looks a lot like programmatic desktop a few years ago where most people were targeting inventory and optimizing delivery in relatively simplistic ways. Obviously Nielsen is about to announce general availability of mobile OCR. … Overall I see a 12-18 month window where mobile video spend will rise to mobile video supply in terms of a percentage basis. Back of the envelope, mobile is a quarter or a third of all supply and I think spend will move there over the next 12-18 months as the audience and other targeting technologies move with mobile. Retargeting, in-market data targeting – those actions are important. But the majority of the business will be audience extension, target audience efficiency – broader, more common brand techniques.
Everyone’s talking about programmatic TV, but how do you define it?
I think it’s important to separate the programmatic medium in two categories. One is, using tools to more effectively determine what you need to buy, which is actually what the majority of the activity that’s occurring in programmatic TV is. The actual buying of TV is still manual, but the tools to determine what inventory to buy, what price to pay, how to flight it is being done programmatically and that includes everybody from Simulmedia all the way down to the video ad competitors we have.
I separate programmatic planning from buying television inventory in a programmatic way, which means making real time decisions on inventory, dynamically serving it and using a platform end to end. This means, “I put the campaign in the system and it delivers,” not “I put the campaign in the system and somebody makes a phone call or fax on the other end.” On the former, there is a lot of efficiency being brought to the table, but it’s not a part of the business we’re particularly interested in – manual ad networks using programmatic tools are not our focus as a business.
But [for] the programmatic buying piece, we are integrating with anyone who has a programmatic stack for buying television – whether that’s satellite or VOD. But the total supply that’s available for that is extremely small. We are tempered in our enthusiasm but bullish in the long-term prospect about the opportunity.
Can you share revenue, customer/headcount and your 12-24 month plan?
We don’t share revenue numbers or percentage breakouts, but we have said in the past – we are the largest video ad company by revenue in the ecosystem and that has been true over the last three years. We’ve been profitable since 2010 and we don’t have a specific customer number but, BrightRoll serves [85 of the top US advertisers, top 15 agencies, 10 DSPs, 18 of the top 20 ad networks, 25 of the top 50 publishers, and 350 video partners, per the company.] We have hundreds of independent, self-service customers. What we’re focused on today is scaling what we are doing already. One of the things we hired Bruce Falck to help us with is scaling operations. We have a pretty massive business, close to 400 employees and we’re building the team and processes to grow. We’re very focused on being an independent company. We’re most excited to expand mobile as a percentage of our business and international as a percentage of our business. We believe we have every opportunity to be no. 1 in every major media market in the world and we have a big focus on rolling out our video platform internationally.