Andy Nibley is CEO of Yieldex, a sell-side, yield management and analytics firm that has focused on providing publishers insight on their guaranteed inventory. Nibley provided an update to AdExchanger recently about his business.
AdExchanger: Why has Yieldex been keeping a low profile in the past year?
ANDY NIBLEY: We’ve had our heads down building the business brick by brick, client by client. We don’t have any real competitors in this space right now, and we don’t feel like putting out a lot of information to encourage people to get into this space. We’re just trying to build the business and not worry about how we appear publicly.
That said, we have integrations going on with ad servers, order management systems, particularly with data management platforms (DMPs) - a lot. We make DMP data actionable – and then the next question becomes, “How much inventory do I actually have to sell and how should I place that?” We think the combination of Yieldex with DMPs is very powerful for publishers.
Any surprises for you over the past year and a half since you took the helm at Yieldex?
I wouldn’t say there were surprises. I think the market has moved towards us, and that there is a realization now that it is very difficult to manage, forecast and price inventory. There’s so much data.
We have become a "big data" analytics firm, which helps publishers increase revenue by getting a handle on how to manage their inventory, how to forecast it, how to price it. It’s very difficult for publishers, with all the overlaps in inventories, to know how much they have to sell and how much they’ve sold already and how much they have left to sell.
Over the last year, we’ve tripled revenue. Over the last 18 months, we’ve tripled the number of “blue chip” publishers we have.
Also, we’re processing over 100 billion ad impressions a month and between three and five terabytes of data. It’s just an enormous amount of data. That’s why I don’t think we have any competition at this point.
Where is the data coming from?
There are just new data sources almost every day. You have DMPs, sell-side platforms (SSPs), order management systems, and video and mobile ad servers. Yieldex has positioned itself to be the window on all of the data that a publisher has - a hub. And then we translate all of that data into something that can be actionable by the publisher.
Who are the people, or roles, that are using Yieldex’ tools on the client side? And what does a client need in terms of staffing to get the most out of Yieldex’s system?
We haven’t found that clients have to add any employees to use the service, but the service is spreading beyond just ad operations, which is where the product was used primarily for the first few years. A number of publishers are now hiring yield managers.
We find that sales forces are now using our product, particularly for availability look-up. We also see the product moving into the finance department, and it’s possible, at some point, that it will even move into the creative and editorial functions, as well.
Are you seeing some challenges on the publishing side as it relates to audience buying and programmatic media?
Yes. That’s one of the reasons why it’s so exciting for us to team up with the DMPs since they create audience segments. What we do is figure out how much inventory a publisher has to sell against those audience segments - or how much they have already sold against those segments.
It’s a service that becomes increasingly valuable to the publishers, as they try to drive their direct sold CPMs higher to counteract any downward movement in CPMs by programmatic buying. So we have become more valuable as programmatic buying increases, because publishers have to get more out of the inventory they sell directly through their sales forces. They have to learn how to repackage inventory to get higher CPM products.
Do you think that publishers can overcome the negative impact that programmatic buying is having on their direct sales with effective programmatic selling?
Yes - I think that may very well be the future. It’s always hard to look into a crystal ball and see exactly what’s coming. I think at our recent Yield Executive Summit, the experts predicted that, in the future, it would be about 50/50, direct selling versus programmatic - that’s probably a pretty good number. At this point, 80 percent of the revenue is still coming from 20 percent of the inventory and publishers are going to continue to focus on direct selling. But, there may be programmatic ways that they can sell, without giving away their premium inventory and still get the benefit of all the brand work they’ve done - and all the editorial effort they put into their content.
In terms of “50/50”, that may suggest that CPM’s that publishers would get through “direct sold” would be lower with the programmatic, right?
I think on the remnant side, they might. The real question is about what everyone refers to as the “fat middle.” There’s something between the very high end of the premium selling and remnant. What we think is, we can identify valuable inventory in that fat middle that can drive higher CPM’s. And that’s why you have to look at every last ad impression. And that’s what we do. And that’s why we have to crunch so much data is to find the valuable pockets of inventory that publishers have been giving away, now, to real time bidding and other programmatic buying systems. We think they’re losing value there that they could be using to off-set the lower CPM’s they are getting from [remnant channels].
Any international plans for Yiedex?
We think the opportunities overseas are quite substantial and have a handful of international clients. We are looking to move more aggressively into that market. We think there’s a huge opportunity in Europe, in particular.
Where are you in terms of headcount and funding, today?
We’ve been growing rapidly and have increased head count by 60 percent this year, and we have plans to continue to grow.
We did our “C” round a year ago in October, and that was a $10 million dollar round, so we’re all set. We don’t think we’re going to need any cash right now.
I know they’re not your clients, but what do you think is in it for the buy side with Yieldex products?
The more educated the publishers are about what advertisers want to buy, the better off the entire ecosystem is. Up to this point in time, the buy side has had the upper hand with analytics. And for a market to prosper, you need both sides of the equation to be sophisticated in the trading.
I saw this in my years of experience at Reuters in the financial services market. And there are, obviously, a lot of similarities between what happened in the financial services markets, and what is beginning to happen in the ad tech market.
I was particularly familiar with the foreign exchange markets. Two banks might have gotten together - two traders - over lunch with a few bottles of wine, and they would agree to a trade. It was a very opaque sort of market. And once that started to become automated, they could look at prices, and then they could look at news that moved the prices. Then, they needed analytics. And then, they could conduct the trades through the system themselves. It’s very similar to what is going on now - the need for analytic tools to sit on top of the data, is important for both sides.