6 August 2013 in ExchangeWire EMEA 0 Comments

‘Nevermind the B*ll*cks, Here’s the Next Wave of RTB Innovation’, by Tal Keinan, CoFounder & CEO, AdExtent

TalKeinanHeadShotCroppedThere’s been lots of doom and gloom about how something like 7/8ths of us aren’t going to live to see our next birthday. Heck, maybe Terry’s right, and maybe that’s a good thing.

So who’s gonna make it? Probably not yet another buying platform or ad tech infrastructure company. On that much we can likely agree. This isn’t to discredit the work the ad tech infrastructure giants have done. Quite the opposite — the companies that have a chance at leading the ‘next wave’ of innovation are the ones that have had the good fortune of being able to build upon the pioneers of the first wave of RTB innovation, and build solutions for specific needs that simply aren’t being addressed.

I can speak to that good fortune firsthand. AdExtent, for those who are unfamiliar, started out as an AppNexus App for building retargeting campaigns. We’ve since expanded to support the major DSPs as well. Without the technology infrastructure, and widespread adoption by media buyers these companies have built, platforms like ours wouldn’t be able to exist. For the first time in online advertising history, there’s a stable, liquid, and efficient marketplace for transacting media, and now the real fun begins.

This is already unfolding: one could argue that the third-party data category was the first to plug in rather than build from scratch, then dynamic creative, then retargeting apps. The newest exciting flavour is data visualisation, with companies like Metamarkets and Datorama enabling advertisers and technology providers alike an unprecedented view of their data and the exchanges on which they bid. Functions that were once ‘table stakes’ for an ad network (like analytics) are now innovating much further as separate products and delivering far more value.

While the market evolution may look like just more fragmentation, the reality is that these solutions are actually converging into one well-integrated ecosystem — and each new entrant now gets to start with building blocks to provide a better experience for marketers. As demand for certain capabilities grows, these new entrants can specialise and own a space, instead of spending time rebuilding what’s already available.

There will, of course, be the temptation for some to call the next few emerging technologies that build on top of a buying platform FNACs (feature, not a company). Those who do are missing the size of the economy that’s been created. It was true, for a while, that unless you sold or somehow intermediated the media buy, you didn’t have much of a future. The scale just wasn’t there for a fee-based model. So, many companies that did a certain thing well began to bundle media to their offering just to make ends meet. The highly innovative analytics platforms I mentioned before would probably have had to become ad networks to stay alive, if it were only a few years ago.

Today is different: with literally billions of impressions flowing through exchanges, building a business on helping advertisers and agencies do better with those impressions (as opposed to selling them better impressions) is a huge opportunity. These companies can focus on specialised, focused innovation to meet a specific need. Everybody wins: the advertiser (and publisher) has access to tools that work with, not against, the way advertisers and agencies like to buy media, the infrastructure giants gain leverage through the ecosystem that builds atop them, the ad tech investment community stays ‘hot’ with new innovation, and little companies, like ours, can flourish.

Okay maybe not everybody wins. Some larger networks and portals are fighting this movement with the notion of ‘the tax’ — that by working with so many different players on one media buy, advertisers are getting ‘taxed’ by paying a little slice of margin to each vendor that needs to whet their beak. This ignores the large tax that opacity and lack of choice levies on any media buy, but more than this, it ignores the fact that for a partner to be truly useful, it should more than make up for any additional fees they add to the media buy. If not, they deserve to be called a tax and sent packing. The ‘next wave’ of innovation will, appropriately, have to prove their mettle transparently and efficiently — and I wouldn’t want it any other way.



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