Programmatic direct will go from 8% to 42% of all programmatic spending by 2016, according to eMarketer research.
BuySellAds, founded in 2008 and which has 18 employees, followed a different path from iSocket and Shiny Ads, both of which were recently acquired by Rubicon Project. It focused on connecting smaller publishers with large brands like American Apparel, Getty Images and LG.
“It’s a lot of public companies, a good number of agencies, and a lot of in-house marketing teams that only have $50,000 a month,” said founder and CEO Todd Garland. “But they’re able to get access to a publisher where they believe their audience exists, so they’re buying their ads through us.”
Garland added that BuySellAds had from very early on focused on the SMB space, where it saw the most traction. “The larger enterprise publishers weren’t ready for this automation yet,” he said.
AdExchanger spoke to Garland.
ADEXCHANGER: How has programmatic direct evolved in recent years?
TODD GARLAND: As a media planner, there are more tools you need to be using to execute a buy efficiently. The time they used to be spending buying direct is crunched. People are more willing to let software do things for them than they were five, six, seven years ago.
Why haven’t you raised any money yet?
The reason why we’re the only unfunded player in this space is because we haven’t felt like we’re ready to pounce yet. Now with the [Rubicon Project] acquisitions, and assuming Google will enter space in next six to nine months, we’re starting to look at some other options.
Is your business profitable now? What are your goals for the business?
This year, $12 million will go through our platform. Last month, over 1,200 unique publishers transacted on the platform. We charge them between 10-25% of each sale to transact through our platform. We’re profitable.
Right now, it’s the land grab. We feel like we have one of the best products in the space. We’re in the process of signing up enterprise-level publishers. Once we start announcing those deals, they’re going to be surprised.
What’s your take on the recent acquisition of iSocket and Shiny Ads? How does that change your business?
It’s tough to say. I feel like it gets them out of our way. I’m definitely receiving more phone calls now. In terms of our road map and what we’re executing now, it doesn’t change anything. Staying focused on our customers helps us stay ahead.
What types of publishers use your platform?
Way back in 2008, the types of publishers using a system like this were earning $1,000 to $15,000 a week and had 1 million to 5 million impressions a month. It was websites were it was the publisher’s business, and they were doing the writing and the advertising. Having a piece of technology like this gave them more time to write the content and take care of the rest of their business. It’s sites like Touch Arcade.
Fast forward to today, and moving further up the enterprise, we’re working with sites like Reddit, which is owned by Conde Nast, which was an investor in iSocket. Stack Exchange, which is another large site, doesn’t sell any of their inventory in any of the RTB markets, they only sell direct, so using us is a pretty big vote of confidence.
Are all the rates transparent in the platform?
Yes, they are within the system, we do have a way to make them nontransparent, but we don’t have people asking to do that, believe it or not. If you’re embarrassed about your rates, set them high enough so you’re not embarrassed.
Most set their rates to a reasonable amount because they’re looking to get volume, and they can also negotiate.
Since many of these publisher sites are quite small without a ton of scale, is this a case of brands whipping out their credit cards to buy advertising?
There are companies that take out their credit cards and buy with us. It’s the overall theme of what we’re trying to do: How does the publisher sell an ad for $1,000 to Squarespace? The amount of red tape and paperwork to get that done means that it’s not done. BuySellAds makes it more accessible for brands to reach where their most passionate users exist at scale.
If there’s one big difference between someone like us and iSocket, it’s that they’ve found more of the blue-chip publishers, the folks that are super large. We’re starting with the SMBs.
How do you handle things like terms and conditions for these direct deals?
Everything we sell is based by IAB standard terms and conditions. Because of the transparency, it makes reconciliation of campaigns super easy. Early on, we focused on the advertising process, going from saying “I want the ad” to having the ad placed.
The second part is getting the things around the direct buy process more efficient. That’s reconciliation, the media-planning aspect, and even discovering deals is a tricky thing for folks, and something we haven’t nailed yet. The third piece is figuring out how to make these tools core to a publisher toolset as well.
How do companies handle this if they also have a direct sales team?
One of the challenges we’ve faced the past seven years was conflict between BuySellAds and direct sales teams. If it’s being paid through BuySellAds, why pay salespeople a commission?
Now it’s about enabling them to sell more. With Stack Exchange, for example, their sales team can use it to take more advertisers through the process in less time.
Some people say the technology behind programmatic direct is complicated. Others say it’s simple. What’s the truth here?
If you’re a publisher and fully buy into a system like this, that’s when you gain the true efficiency, because then everything else you do is through that single system, like reporting. It’s when you’re not committed to the system and when it’s one more thing you have to do as a publisher that it’s hard.
As an advertiser, imagine you’re Adobe placing 50 different buys for relaunch of Creative Suite. It’s one point of contact, and the value prop is even clearer. We do a pretty good job of moving those folks through that process of buying an ad.
How would BuySellAds be affected if Google entered this space?
DFP [DoubleClick for Publishers] is the largest ad server out there, with north of 70%, and it’s definitely a concern. Google actually has had a product, which is built into AdSense for SMBs, and we haven’t seen any effect on our side that we know of.
I still think there are room for companies like us that build workflow around things that aren’t DFP. That’s the promise of programmatic direct. Ad servers are utilitarian, and focused on solving a completely different problem.
What’s the size of your potential universe? Where might your business expand?
The performance of display ads is declining, which is no better evidenced by the decline of Yahoo’s earnings, and they’re a display ad business.
What we’ve been getting into more and more is selling advertorials and sponsored content. Automated guaranteed can do custom things, like sponsored posts. It can adapt to helping publishers sell to how they’re currently selling.
We’ve been experimenting with our content syndication products. It’s really just us trying to figure out how to build the workflow for selling advertorials, syndicate and underwritten posts for our platform.
What else are you thinking about a lot?
To raise money or not to raise? iSocket raised $15 million. We stayed bootstrapped. Look at where we are today. I’m happy that we didn’t make any bets early on. Where we are now is figuring out whether or not we raise money and step on the gas, and what the timing is on that.
