Mario Diez is CEO of quadrantONE, a joint venture of Tribune Company, Gannett Co., Inc., Hearst Corporation and The New York Times Company, which offers exclusive ad inventory on news and information sites across U.S. local markets.
AdExchanger.com: What has surprised you about QuadrantONE and its business model since you joined the company as head of sales and then CEO?
MD: I'm not sure that I had so many surprises since I was already pretty familiar with its publishers from the companies that comprise its board. I thought it had a lot more potential, and I think that’s been validated. quadrantONE’s owners/partners have shown an exceptionally forward thinking outlook and meaningful commitment to the growth and success of the organization from the start.
You have a stellar group of large publishers as members/partners - will it expand in the future? Is there a need or an opportunity to scale beyond the inventory of your existing partners?
We’ve launched with existing partners, and expect to learn from the working relationships we’ll establish with the buy side. I think the “need” will be heavily dependent on demand. We already have more scale across branded local media than just about anyone else. That being said, inbound requests from the publishing community last week were phenomenal and the one consistent question we received from the buy-side was “when are you adding more sites”.
How does a publisher work best with quadrantOne? Can you take us through a use case of a publisher or newspaper website in particular?
We have essentially two streams of inventory. First being a guaranteed percentage from all affiliate partners (some 35 publishers and all their web properties). Second is 100% of the open market inventory that we’re privatizing under the Q (the four owner companies are first to participate). All is flowing through one platform now, which has never been done before. This will give individual publishers and quadrantONE a level of control and transparency previously unavailable to both parties. Every aspect of their digital display business in the open market will now be centrally housed to help drive yield and intelligence across their data and audience segments. All of this will be done with 100% transparency to our publishers to better inform them of the audiences their web properties are connecting to.
How much of the non-guaranteed inventory will you receive from the publishers mentioned in your latest announcement? Will it escalate over time depending on variables such as availability?
For the publishers participating in the privatization project, they are contributing 100% of their open market inventory. By open, I’m referring to the inventory not sold by their direct sales operations and had gone the way of networks and other exchanges. Our other affiliate partners will continue to contribute their inventory which generally ranges anywhere from 5% to 15%. Once Q-Exchange is fully functional and established – I see opportunity to grow our relationship with our current affiliate partners.
Any early results you can share?
While we are only a few days out from our initial launch, in this first week we’ve had well more than 3000 advertisers come in to bid on the inventory.
What's your view on channel conflict? Have your members decided to throw caution to the wind? How does your offering prevent channel conflict?
First, we operate in full transparency with our owners so they have full control into our operations. That being said, any time there is a disruptive technology that enters an eco-system – there are going to be areas of friction at various points of the execution process. I think we are seeing that now across the display industry. There’s a misconception that exchanges and trading desks are going to commoditize the market and take over all media buying and execution. This can’t be farther from the truth.
What we see is all parties that technically own a part of the process such as “buying (agency)” or “selling (publishers)” are starting to employ technology that give them more control, efficiency and transparency into an area of their business that was previous unavailable before. Exchange / audience buying will continue to evolve but it will always be for most marketers one part of an overall mix of tactics to reach their strategic goals. Marketers are always going to leverage custom relationships with sites directly which my owners/partners do an exceptional job of. There is no channel conflict. We’re not taking any new inventory or opportunities from the sales staff of our publisher members. The inventory dedicated to the Q-Exchange had been dedicated previously to the quadrantONE network. As you can see from my response to your previous question, we are already seeing great demand for Q-Exchange.
With your recent deal with Admeld for private exchange functionality, is the a sign that QuadrantONE's future is in licensing tech rather than owning it? Any plans here?
I think for now, the answer to that question is yes. AdMeld made it pretty simple for us to build this product and take it to market. I don’t see any reason to change that any time soon.
Looking at your private exchange strategy, have you contracted with trading desks, DSPs, marketer? Any clients you can share?
quadrantONE’s traditional platform has served most every major agency holding company across the country. Q-Exchange’s launch is on its 7th day as I write this and we are expecting to contract with a number of trading desks for the exchange in the upcoming weeks. Remember that this has been in the works for almost eight months, so we’ve had the opportunity to take guidance from buy-side leadership on design.
If your non-guaranteed inventory isn't sold through the private exchange, where does it go?
All non-guaranteed inventory will be managed through quadrantONE with one centralized strategy. The goal here is to, again, establish a common strategy across the local publishing community to ensure we can maximize the opportunity with the marketplace with scale.
Will you buy on behalf of publishers? Enable retargeting or reach extension? Any thoughts on buy side offerings?
The part that we think is the sexiest is that publishers can sell into Q as a buy-side extension, adding tremendous value that they had no access to previously for their advertiser partners. It’s literally the best of both worlds for our publisher buy side operations. Marketers come to them for their custom work and access to local audiences in known environments. We saw this as a huge opportunity for them to sell a like-minded environment with audience segment data as extensions to the site specific custom executions they employ for their local/regional advertiser base.