While advertising spending was depressed across Europe as a result of the ongoing debt crisis, the resilient German economy represented the best growth aspects for the ads space. And as the sense of doom and gloom ebbs a bit in Europe, there is a sense that real-time bidding, and its promise of efficiency, has received an extra boost in the changed economic landscape.
That appears to be particularly true in Germany, where Ströer, a company known for its out-of-home and street furniture advertising took a controlling interest in Cologne-based ad marketplace Adscale.
AdExchanger spoke with Matthias Pantke, the former CEO of Adscale, who is now in the role of co-managing director, about the investment and how the two companies will relate to each other going forward.
AdExchanger: Why is Ströer taking this stake in Adscale? And, how big is the stake?
MATTHIAS PANTKE: Ströer’s stake will be 91 percent. Both managing directors of Adscale, Stephan Kern and myself, will together hold nine percent of the company’s stake. Ströer is going to expand its online activates and has decided to invest in Adscale, a German marketplace for digital advertising.
How does Adscale fit together with Ströer's other holdings? Will it be integrated in any way with thesthem or be strictly independent?
Ströer’s Media Ventures, a company of Ströer owner Dirk Ströer, holds stakes in three other online companies: Ströer Interactive, Free Media, and Business Advertising. All three of them stand for premium online advertising space, while Adscale has its strength in reach and automation of online advertising.
Adscale and the three other companies complement one another. They are putting Ströer in a leading position on the German online advertising market. If the German cartel office agrees, Adscale will operate as an independent subsidiary within the new Ströer business unit “Ströer Online”. For the future we are of course planning to cross-link the strength of the four companies as well as the classical out-of-home business of Ströer Media.
How did the two companies come together? Had Ströer worked with Adscale before?
We’ve been working with Ströer as a publisher for quite a while. For us, the next logical step for further growth of our company was either to buy another online company that fits to our portfolio or to find a strategic investor that has online activities matching ours. That’s how Ströer and came together with us. Both sides thought it would be a perfect match and create a win-win-situation. We are really happy about our new major stakeholder and will together strengthen our leading position in the German ad market.
Are there any plans for greater international expansion?
Ströer is already a strong player within the European out-of-home market. Adscale on the other hand, works together with different international partners e.g. from the US, Great Britain and France, in the field of Real Time Bidding. We are definitely going to expand these international activities over the next years.
What is the state of the online ad market in Germany and Europe, particularly with regard to ad exchanges, real time bidding and programmatic buying in general? What is the state of the traditional direct sales model for online advertising in Germany and Europe?
RTB and automated sales definitely gained a foothold in Germany this year. Within our marketplace we have already achieved up to 30 percent of our daily revenues with RTB. We now have more than 20 demand partners connected with our RTB platform and see the business growing day by day. We believe that in three years an average of 30 percent of all Display advertising in Germany will be traded via RTB.
Traditional direct sales will focus on selling premium inventory as well as ad specials in the future. Overall, 2012 was not the best year for the ad business: The economy was very volatile due to the Euro crisis and advertisers where very conservative with their marketing budgets. Online advertising is still growing but no longer on such a high level as we experienced within the last years. For 2013 we are optimistic that online continues its growth path, and that we will profit from this development in our new formation.
Does Adscale work with any particular third party, or parties, in terms of supporting the infrastructure of its ad marketplace?
Adscale provides full SSP functionality and has all major demand side platforms hooked up to its proprietary marketplace, including AppNexus, Turn, MediaMath, Invite, DataXu, among others.
What are Adscale's goals going into 2013 with this investment?
2013 will be a challenging year for Adscale with a lot of interesting projects. We are planning to expand our RTB marketplace and will invest in the field of mobile advertising. In addition, becoming part of the Ströer Group, and above all the chance to dovetail our business with high-quality online marketers, will give Adscale access to further growth opportunities.