Specialising in digital media since 1996, Hi-Media has grown considerably over the years, now boasting an R&D team of 100 engineers and IT specialists. A year after the announcement of their automated marketplace at ATS London 2011, CEO Cyril Zimmermann discusses how far they’ve come since then and what we can expect from Hi-Meida in 2013.
It’s been over a year since you launched your marketplace at the last ATS London. How has shifting inventory to the automated channel helped the Hi-Media business in France and Europe?
As you say, we have moved all our inventory to our automated marketplace. This was possible since we had a different business model than traditional ad networks like Specific Media, Adconion, etc. We’ve always positioned ourselves rather like a media company, with a determined perimeter of ad inventory either provided by owned and operated websites or third-party websites, with whom we have exclusive agreements. The several tens of billions of ad impressions a month, and the quality and diversity of the audience we bring to our marketplace, cannot be found anywhere else.
This being said, it has been a tough challenge, but today we are really satisfied with the shift to the automated channel and it is a real success. Sell-through ratios have increased over our global inventory, thanks to new flows of RTB campaigns that we didn’t have previously. In September 2012, (i.e. 10 months after going live with our marketplace) we had campaigns from 10,000 different advertisers in Europe, and our eCPM has risen by 20% for performance campaigns and what was formerly called the ‘run of network’ campaigns.
How difficult has the transition been in terms of both how the company sold its ad inventory, and the migration to a real-time solution?
It has been 18 months hard work, and I am proud Hi-Media has been able to transform itself in that way while operating its business on a day to day basis. It has been tough work, but again it was worth it. It has taken us more than six months to evaluate our strategy and our technical requirements, and then going fully-operational by shifting the inventory to the automated channel has taken us almost one year.
Beyond the migration itself, we had to build various tools and functionalities with our IT teams in Nantes and Paris to have AppNexus transformed into an adserver, beyond its core DSP and SSP functionalities.
We have set some forecasting tools as well to get better visibility on inventory optimisation, since we have our traditional sales teams selling campaigns parallel to the automated channel. We are also currently working on a dedicated automated interface for longtail advertisers that can’t afford the service of world-class DSP, but will be able to buy through us campaigns for a few hundred euros targeting very precise audience groups on the local level, for example.
On the publisher side, we have designed modules which allow our publishers to handle their barter deals and auto-promotion, aside from the auction environment of the marketplace. As for reporting, automated trades, like traditional sales, have been connected to our ERP, which was an important matter for us, being a public company with strict compliance obligations. Now we are currently working on enhancing our analytics interface for publishers.
As you can see, overall the company and its teams have worked very hard to create a new advertising ecosystem. Hi-Media is a wonderful company for that, we have survived the bubble crash ten years ago, we have resisted fierce competition in the 2000s, and today we have successfully made a bold move at the right time to take the best advantage of the market’s evolution and its probable consolidation.
You are serving over 20 billion ad impression per month across owned and repped sites. Are you making all your inventory available pragmatically? How much of a fill-rate are you seeing?
Our entire inventory is available pragmatically in our marketplace. This is our vision of what should be an ad exchange. If we were talking about financial markets, one could hardly ask a public company: “Are all your stocks all tradable?”
Saying that, we have of course price floors and black lists (or grey lists) agreed with our publishers, so that the marketplace respects the publisher’s policy. It is really key to have a strict pricing policy since our marketplace is totally transparent: the advertiser knows what our inventory is made of and can select audience, of course, but also URLs on which he wants to be displayed. In this way, we are very different from blind or semi-blind marketplaces. This justifies a strict list of price floors, based on historical data we share with our publishers, so that the automated channel does not bring price pressure.
The ‘machine’ is here to optimise and create upside on prices and revenues, not to save headcounts on the sales force and accepting deflation on price. Our Hi-Media Ad-eXchange can only bring upside: our sales force is in competition with the automated trades and the arbitrage is done based on the campaign’s eCPM for the publisher.
So we don’t have two separate worlds, with on one hand manual sales, and on the other hand automated sales. We have one single advertising ecosystem with two channels for sales. There is no cannibalisation risk and only upside since campaigns’ priorities are based on effective prices provided by both channels (with floor prices determined by our experience of historical eCPM for our publishers).
How are you managing yield across the direct and automated channels?
As explained, I can say we are agnostic and we don’t favor one sales channel against the other one. Two or three years from now I think there will be less and less competition between the two channels. Automated sales will get the vast majority of the standardised display market and Direct sales executed by our sales force will be more and more about tailor-made special operations. Along with the move towards our automated marketplace, we have as well strengthened our Special Operations team in the past 12 months and we’ll recruit more experts in that field in 2013 as well.
What has this meant in terms of restructuring sales resources within Hi-Media?
Over the years we have built a very strong sales organisation within Europe, with more than 120 talented people able to sell various type of campaigns, ad formats etc. Eighteen months ago we decided to reorganise our sales and business development teams by business units, specialised by channel of sales or ad formats. Today we have one team dedicated to special operations (Hi-Media OPS), one team dedicated to video (Plein Ecran/Full Screen), one team dedicated to mobile, one team dedicated to trading desks and one team handling the manual channel for display.
We have done a lot of internal training and enabled most of our teams to adapt themselves to the new challenges so that we can keep the company’s talent, and mix them with new teams, who are experts in technology, analytics, yield, data, video and mobile.
In terms of growth in the local market, are there any stats you can share in terms of growth in your own marketplace?
Our marketplace is almost 100% of our ad business today. The only part of the business which is not handled by the marketplace is a telemarketing and local ad sales business we have in Sweden, and to a lesser extent in France.
When it comes to the RTB share of our business, it already accounted for 9% of our business in June, (i.e. 8 months after launch). I would not be surprised if we reached 15% in December, or early Q1 2013.
We’ll do our best to keep on being one step ahead, we’ll make home page takeovers available in RTB by December, and email and newsletter inventory available through our market place in 2013.Global Desk Editor