AdExchanger: In terms of the amount of friction you encounter with different technologies, where are you on a scale from one to 10?
DAVID MOORE: I would say we’re still in a six to seven range. Just look at how much manual labor continues to exist when it comes to booking campaigns and running them. It’s still significant. Programmatic has gone a long way to automate parts of the process, and it’s certainly helped, but we still have a long way to go.
Another example is when you talk about viewability and fraud. Depending on which company you use, there are significant discrepancies with what each company provides. It’s no one’s fault, but the extent to which over time we get standards to know the gap of discrepancies across the board, be it viewability, fraud, impressions, it’s going to make this industry grow.
One of the group’s initiatives will be to help create mobile and video versions of the DAA’s AdChoices (which gives consumers choices about what ads they see). What’s your take on the privacy debate?
When it comes to mobile in particular, unlike a desktop, it’s only used by one person. It’s a much more personal, private device. I don’t know how you feel when you hand your phone to someone else, [but] when I hand my phone to someone, I feel almost uncomfortable. When you think about privacy and targeting, that whole mobile universe is going to have to something we’re going to have to be very careful about.
Most of Xaxis’ inventory is traded via private exchange. Why is this?
We love private marketplaces. If you think about programmatic RTB, we don’t have any advantage there, so from our perspective, we prefer to be doing everything through PMPs, so we can take forward positions with publishers, have the type of audiences we want, that are of high quality, and negotiate a set price. We’re a big supporter of them and expect our usage of them and our abilities to grow.
How do you see the growth of PMPs affecting the sell side, especially smaller publishers that advertisers might overlook for a direct deal?
On the sell side, Xaxis has done both – we sell and we buy. Xaxis has a network that came from 24/7 Real Media. We’ve got a very significant sales effort out there selling advertising directly to advertisers or their agencies outside the WPP family.
On that side, we have some of those smaller sites that are not top of mind. In addition to that, Nicolle Pangis, who is CRO of Xaxis, is working to create media products that can be brought to the various exchanges out there, and is diligently working on supply with a number of partners. We’re working with the big major publishers, but we’re happy to talk to smaller publishers. A lot of them have great quality content, audiences and a minimum of fraud.
With the shift to private marketplaces, it’s almost going full circle: An ad network and a private marketplace created from a group of sites, for example, look a lot alike. Do you see it that way?
Programmatic has allowed the agencies to create their own ad networks. While ad networks will never be the same, they are morphing into what I would call a different modality, if you will, that tends to be driven by advertisers and advertisers’ agencies.
What modality is that?
The typical network in the past was done on a personal level. You aggregated as many sites as you could, originally there wasn’t even an issue if the ad appeared in the US. Then programmatic started to occur, and the networks had trouble making their inventory programmatically at the beginning, and by the time they did the buyers were doing it themselves.
How has Xaxis’ network caught up to that programmatic reality?
We use programmatic now to create some of our networks, it’s not traditional where we used to meet sites, negotiate with them. We’ve developed a custom network on behalf of a particular campaign with Xaxis, which is a lot different than how we used to do it. In the past, we used to do categories: For a beer brand, it would be a sports content vertical. For a woman’s product, it would be women-oriented sites. Then it became audience-driven, delivering audiences to a particular campaign objective.
So are these networks purely composed of audiences?
The ideal situation is the right context, the right audience, the right ad at the right time.
What are the industry’s biggest pain points in the year or two ahead?
Pain points are getting to a universal ID, so you’re able to track someone wherever they go across the Internet and put relevant advertising in front of them. Now it’s tough to go across mobile and desktop, and across AOL, Facebook, Google, Yahoo. From an advertiser’s perspective, that is a major challenge. Other pain points are going to be working through viewability and ad fraud. On the fraud front, I think we’ve already made a lot of progress.
What else do you see affecting the industry in the future?
Regulation. It’s not here today, but I’m watching the FTC on net neutrality, or some of the new privacy initiatives that the Obama administration is contemplating.