HARDEEP BINDRA: adBrite had been looking for a management team that could come in and recast the business for their initial review. Iggy Fanlo had been running the business over the last few years. There’d been fits and starts in the adBrite exchange, so to speak. There was development on the marketplace side, on the revenue side, on the business side. There wasn't a clear direction in terms of what adBrite wanted to be as it grew up.
It started off as a network, then started to become a partial marketplace – I say “partial” because from a pure feature perspective, it was still far behind some of the larger more established marketplaces in the world, like an AppNexus or Right Media – and they were looking to bring on a team that had more relevant, current experience in building this kind of operation. That's why the group had reached out to me, and as I was evaluating coming on, I shared this concept with a few of my close confidantes to get a review of the business to see what the technology was like. Joaquin was also one of them who looked at the business at the technology side and we brought him on as CTO.
We found that the core infrastructure was very strong. AdBrite had traditionally been a self-serve exchange, if you will. The majority of the supply partners that participated in the marketplace, as well as the demand side partners, the majority of them were what we call internally “organic demand” and “organic supply.” In other words, these were people that leveraged the self-serve platform, took the tags, put it on their pages and brought their spend, and signed up and set up their campaigns and started to buy.
Because this was set up a few years ago, the notion of being fully transparent, of offering advanced services like real-time bidding, was only still starting to be implemented in part. But these offerings were not fully available across the entire exchange. In the last seven months, we have focused our efforts on building a couple key capabilities on top of a relatively strong infrastructure.
For example, bringing transparency across the exchange, making sure that the supply base is largely transparent to the buy side, has been a big issue. The RTB integrations that allows for buying across the wider supply base, rather than just focusing on a very small subset of premium supply, has also been established. From there, we’ve also started to invest a lot more in video and mobile, particularly in-app advertising.
What areas of video are you focused on?
Prior to coming on board, video was primarily in-banner, rich media. There was very little if any in terms of pre-roll, post-roll so Joaquin and his team have built a proper video offering that is in banner as well as in player. Our focus has been on that. We also launched mobile web and are extending to in-app advertising and specifically bringing video to the mobile in-app advertising space.
A lot of the code that was developed for us was somewhat orphaned in its development and set up in silos. We've streamlined that entire process, we've got new code, rewritten a lot of stuff around it and stabilized it significantly.
What kind of partnerships have you initiated and how have they helped expand adBrite’s scope?
We have integrated with [semantic ad specialist] Peer39 across the entire exchange to classify that supply. As the bid request comes in, Peer39 will then look at every single URL, classify, build out the context and put them in IAB standard categories, so the buy side has a much better view into what they're buying and doing things like that.
Separately, we’ve installed Adometry across the entire company and our entire marketplace, so we’ll get better at click-fraud tracking and trashing of bad clicks. As I said, the impetus for these kinds of partners is the recognition that the marketplace needs to be a trusted, safe environment for our buyers and our sellers to come in and transact with each other. The key philosophical change is to not just be a standalone, traditional marketplace where buyers have to bring their own technology and suppliers have to bring their own technology for optimization and finding the right transaction points for themselves. Rather, we want a place where the exchange starts to play a little bit more of an involved role, a collaborative role in offering services that make those transactions a lot easier and a lot more trusted and safe for the buyers and sellers and offering those services at no additional cost.
With some of those costs being built into the exchange, there is an incentive for the buy side to bring more spend for the suppliers and to help us improve return on that spend for the buyers as well as improve yield for the publishers. By offering the services that they use anyways at no additional cost it would create the right incentive.
When I look around there's very few marketplaces that have the full stack from text links to standard banners to in banner rich media, pre-roll video, post-roll and then mobile web, plus going into in-app, and we're finalizing and curating that entire stack at this point, with the exception of mobile apps, which we will have starting mid- to late January. We support every other function at this point.
What’s your approach to the mobile web versus the in-app ad space?
There is a very big limitation on the accessibility to in-app advertising. NetPage is doing a fantastic job with it. AdMob is another alternative, as is Millennial Media. In today's environment, advertisers are almost forced to work with five or six different outlets or different set up points to go buy those things. There is a great demand for a one-stop shop.
For video, they will specifically start with BRX/Brightroll Exchange, SpotXchange. For mobile they will go to Nexage and AdMob. For display they’ll spread it around AppNexus, adBrite, Right Media.
That one campaign gets splintered pretty significantly. What we're trying to do is by offering a simple draft and the ability for someone to buy on multiple different through us.
How much does video and mobile contribute to adBrite’s overall revenue pie?
Video makes up roughly a quarter [of our ad inventory] and drives about 20 percent of our revenues. The mobile web is about 10 to 15% of our general supply and about the same percentage in revenues. As I mentioned, mobile in-app ads will be rolled out Q1 and will be fully ready to launch into the marketplace. We'll see how that picks up at that point.
How do you expect the exchange space to evolve in 2013, particularly with regard to major publishers who have taken small steps into the space with private exchanges as a way to insulate their direct sales?
There is always talk and rumors about consolidation, but that's pretty much the opposite of what you see happening in the marketplace. There's a lot more niche players now. They keep mushrooming and new acronyms are being added to the alphabet soup already, making things difficult to keep track of.
From a 30,000 foot level, I think the role of exchanges is going to grow fairly significantly. It's not just the exchanges, it’s programmatic buying or buying with optimization behind it. The notion that Google is pursuing with “guaranteed programmatic” is something we’ll be hearing a lot more from others. We're seeing this trend where partners are coming to us, publishers specifically, and saying, “Look, we tend to see X amount of dollars on a guaranteed basis and a certain CPM for different cyclical events in the year. But we want to try and see if the programmatic buying side can beat those.”
We are getting into an environment where optimization around audience based on external cyclical events is going to become a much bigger, much more sought after requirement. There are new technologies like Skinected, where you can now skin sites and bid on them on a programmatic basis. It just goes to show you that programmatic buying is transcending traditional standard banners by going after what you might call non-standard inventory.
The trend is about optimization of spend around audience, irrespective of platform and ad format. More than ever, it's going to start coming down to seeing who has the better data. Where is that data available? How best can you help optimize around return on ad spend as well as yield? That's going to be the sweet spot for people to start focusing around.