Having co-founded Collective in 2005, CEO Joe Apprendi has seen his company’s ad network reconfigured, if not entirely reimagined, as programmatic audience buying transforms the publisher ad network model. And as placement has given way to audience buying in recent years, Apprendi and his team have looked to keep pace with products such as its audience buying platform, known as AMP, and its newer TV Accelerator product aimed at media buyers looking to address TV audience online.
Today, Apprendi pins Collective’s future on multi-screen addressability: “We put the audience right at the center of our technology platform. Any screen that we can address with data in absolute or near real-time, that’s where Collective is playing. Those screens include the desktop environment, the mobile environment with tablets and smartphones, and eventually connected TV.”
Though declining to discuss exact revenues, Apprendi says business is booming with clients who include 76 of the top 100 spenders in the US. He also claims that the average spend of those 76 increased by 40% from 2011 to 2012, while headcount at Collective is now “north” of 300.
AdExchanger spoke to Apprendi last week about his company and industry trends.
AdExchanger: There’s lots of discussion about what programmatic is and isn’t. How do you view “programmatic”?
JOE APPRENDI: A lot of people instantly think “programmatic” means real-time bidding (RTB). I would say RTB is a subset of programmatic and programmatic is subset of automation.
“Programmatic” doesn’t necessarily mean you have to make a real-time decision on an impression selection. In fact, because Collective predated RTB – versus some of the other demand-side platforms (DSPs) and/or ad networks who have just focused on RTB access or open market access – we've already done a lot of the work to “cherry-pick” and bulk-buy based on data intelligence. Also, our direct-to-publisher channel provides buyers great value.
Today, RTB-based buying is still less than 50% of our actual activity. Consequently, we offer marketers the best of both worlds, when you have both ecosystems at your disposal and a unified bidder to select and activate whether you’re getting it through your direct, non-RTB or RTB impression sources.
Now, over time do we want to see that RTB percentage grow? Yes. Will it ever be 100%? Unsure. It’s really just a question of how publishers want to conduct business with data-driven buyers and how ad exchanges evolve.
What are the changes you're seeing on the agency side today?
I’d break it up into the two groups: the agency level and then the trading desk level. Agencies are operating in different ways as it relates to the trading desk and how it integrates with their planning and buying strategy both offline and online.
At the agency level, their thinking has shifted from siloed planning grouped by channel and by screen to a consolidated structure that is a bit more screen- or channel-agnostic as far as their planning activities on behalf of the brand. The first mover there is video, which aligns with our TV Accelerator product. Instead of planning video just for broadcast and cable, agencies are planning video everywhere. Nielsen with Online Campaign Ratings and comScore with their vCE product are now allowing them to buy more consistently with that gross rating points currency they're accustomed to at TV.
What’s going on with AMP these days?
Great question. Being in the business of servicing advertisers on the buy side and publishers on the sell side, both through media monetization as well as through technology with AMP, we have very strong relationships with publishers. All the capabilities that we've built for agencies and advertisers directly, publishers have been eager to get their hands on. If a publisher’s going to be successful long-term, they're going to be thinking about how they sell both via content as well as with data, not just doing it on their own inventory but as a part of audience extension and leveraging their data and audience.
We've been servicing publishers about five years with our AMP product – it’s really an Ad Network Administration, Revenue Analytics and DMP tool for publishers. We want to be the turnkey partner for big publishers who want to complement their core media businesses with audience extension. Our recent Cox agreement characterizes the type of relationship that publishers have with Collective, specifically leveraging the AMP platform and our managed services to deliver audiences at scale no matter what screen they want to deliver on. That’s where AMP is headed.
What has happened to the Collective Exchange in all this?
Again, it continues to grow. Agencies or advertisers who are using tools to buy audiences directly through exchanges or other DSPs...can leverage this enormous curated audience and inventory ecosystem that we built through Collective Exchange. That’s still accessible, still available, a growing part of our business.
So, overall, how would you describe Collective the company today? Ad network? Agency?
We’re an audience platform. We deliver audiences using data and technology across screens and formats. That’s what we do. How we do business – the business model which we engage with agencies and advertisers – can take many forms. It can take the form of an ad network, meaning you just want to pay a simple CPM to leverage that data and media bundle at scale, and we handle it end-to-end...If you like to engage more in a platform and managed services capacity, where we charge you transparently on a percentage of spend like a DSP, [we're] happy to engage with you that way.
The key is we deliver audiences. And people get the most value by opting in to leverage our end-to-end ad network platform. They also just use our data. They leverage our creative platform (Tumri) on- and off-network, too. But the end-to-end value proposition is where the market’s headed – a single solution, a single stack.
Will we see a Collective IPO soon?
There’s a variety of strategic options available to Collective. We are a large company. If you would take a look at the LUMAscape, we’re probably in the top ten in terms of ad demand coming through this platform and we have high margins and great profitability. We’re a very attractive company that is probably a good public candidate. We’re certainly not giving any absolute guidance on that. I believe there’s an opportunity for Collective to do that at some point.