AdExchanger: What does the announcement of AdLearn Open Plaform mean for Ad.com?
NB: Like any other provider of technology and a service in the marketplace, you look and you see what your marketplace is asking for. There has been a rise in the number of clients who want full transparency and manage things on their own. The issue arose that a lot of times [self-service] hurt performance, and a very significant number of customers who reduced spend a year ago went over to different, programmatic trading companies –and then returned to larger budgets.
You may have more transparency, but that doesn't actually mean you're going to do better. So what we wanted to do was take an algorithm and a model that worked - which was our internal UI [for Ad.com] - and bring it out to the marketplace.
I don't think it's a change in strategy, it's simply saying, "If there is a segment of customers that is now large enough to want to do it this way, we're going to provide them a tool to do it."
We believe that we invented the non‑reserved space with Ad.com. And we are out to reinvent it this year. What that means is getting back to real product innovation in the marketplace. So we began three major projects last year. This is the first one to come out.
It's all part of a strategy to be able to provide the best opportunity for publishers to monetize their inventory. At the same time, on the other end of that chart lies the advertiser. As they change the way they want to buy, we want to make sure that we bring the inventory tools, the technology optimization, and the data sets that will let them do it. Now, they want to buy it in one way versus another, we need to be there to do it. So it has taken us a year and not because it's something we couldn't do - frankly, it's quite a complex.
So do you consider AdLearn Open Platform a DSP (demand-side platform)?
It's a DSP‑plus.
For us, the DSPs in the marketplace would say, "Hey, we provide a UI into RTB sources. We provide optimization. We provide the ability to bring in data." We think we do all those things better, so we provide you not only access to the RTBs, but to all the inventory that exists in the Ad.com model, which is a couple of billion impressions a day of premium inventory.
On the data side, we can bring you all the data that you might want to buy in the marketplace today, plus all the data on the 100 million‑plus UVs that AOL serves on a monthly basis. On the optimization, there are a lot of companies out there that moved into the optimization space or the DSP space from different groups. Ad.com had to build UIs for all of them.
For us to put that into one place, we think it's the most complete data set. Frankly, when you develop the UI in the product from a decade of experience of doing this for customers, it's a different place to come from.
AOL has hesitated with RTB for its publishers and its own properties in the past, no? Why the change?
Well, we didn't go out to the marketplace and announce everything we did as an organization. With Adlearn, we changed the way inventory was evaluated in our network years ago to a market clearing strategy where every campaign in our system had to actually bid for inventory in our network. So the whole concept of then taking that externally and then bidding against RTB inventory sources was not foreign to us from the beginning. It's something we had a tremendous amount of experience with.
I understand how that's news, but it's not a different course of action for us based on how we've been performing for years.
Think of us as a private marketplace before there were private marketplaces. Adlearn itself bids on three billion auctions a day. A very small portion of that is RTB. It treats all of our publisher's inventory and our own inventory the way that a DSP treats an RTB source.
Can you talk a little bit about how you overcome the potential for conflict of interest? Where "first look" would go to Ad.com, for example?
Every piece of inventory is bid on by all the campaigns. We calculate what we think will be an expected return on the Ad.com part of it - that bid is no different than a bid from a third party to us. It goes into the marketplace simultaneously and to the highest bidder.
What's this going to mean to trading desks?
We hope they adopt as quickly as they can AOP as their algorithm and bidding engine into RTBs.
Can an agency trading desk "bring their own" such as an Invite Media?
No. But most agency trading desks today use multiple DSPs.
So what are the second and third phases to this?
There are three parallel, development paths. I don't know what's going to be in 2.0 and 3.0 exactly – but, we're launching with major trading desks and advertisers. We're going to learn what they want in feature sets, and we'll build UI, changes in feature sets, and so on.
The second development path is the movement of this into greater opportunities for brand advertisers.
We made a big deal of saying Pictela and Project Devil is an opportunity for a brand to shift from offline to online. We want that to be scalable, so we launched the Devil Network.
In the future, you will hopefully begin to see things like Devil be programmatically bought. You can see video and mobile being built into this. I think you’ll see more and more improvements on reporting, too.
The other thing I would add is internationalization as well. Canada's going to come in Q2, and then Japan and the UK, and across Europe.
As you know, we're relaunching Ad.com in central Europe this year, so AdLearn Open Platform will be a part of it.
Looking ahead, what would you like to have accomplished in 12 to 18 months?
With AOP, we're obviously looking for large‑scale adoption. I'm not going to say what percentage of trading desks on it makes me happy, but I think long‑term what you'll see from us is what we talked about last year with sales strategy - we want to be a provider that crosses from publishers to suppliers. At the end of the day, you have publishers and you have advertisers, and you have to find ways to efficiently bridge that gap.
Can you talk about the value of that AOL data that you're offering for targeting?
It's a couple things. One is that because you've got RTB and AOL data, it allows you to set frequency caps and things like that across a much broader set of inventory than you otherwise would've done, which helps you with efficiency levels.
It is a unique set, because the AOL properties, span everything from Huffington Post to Stylelist to Autoblog and so on. From a behavioral perspective, it's very useful.
So is this even more of a move towards the technology side for Aol the media company?
The formation of the Advertising.com group which occurred last March, you know, which includes Ad.com, ADTECH, Pictela, 5min, GoViral, and StudioNow, was a realization that the company has significant technology assets and needs to bundle them together to maximize the ROI from technology.
Having each of those be an individual, standalone business didn't make as much sense as thinking of them as a combined technology stack, and that's where we've been moving.
By John Ebbert