EMEA > Publisher

PubMatic are speaking at tomorrow’s AdTrader Conference in Berlin, April 18.

Can you give an overview of the PubMatic proposition in the German market?

We provide premium publishers in Germany with a real-time media-selling platform for managing revenue across every sales channel and every platform, including mobile, desktop and tablet. PubMatic provides a flexible set of capabilities that allow publishers in Germany to customise their ad technology. These capabilities include: superior Private Marketplace tools for managing premium inventory and brand control with transparency; appending first- and/or third-party audience data to media, increasing the value of impressions and improving the user experience; real-time dynamic reporting across direct and indirect inventory to enable publishers to see which channel will deliver the highest value per impression and enable complete control over how their inventory is sold.

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Simon Halstead is Director, Microsoft Advertising Exchange and Scale Display, EMEA, Microsoft Advertising

Disclosure – I have worked for agencies, sales house, networks and now work for one of the world’s leading publishers and exchanges. Microsoft have a valued partnership with AppNexus in Real Time Bidding (RTB). All views expressed are my personal opinions, and don’t necessarily reflect Microsoft strategy.

The topic of programmatic ‘premium’ or ‘reserved’ means a publisher, or SSP, needs to clearly define its programmatic goals. There are a number of functions that are currently fulfilled by RTB and the programmatic channel:

- Monetisation of unsold impressions
- Additional revenue not captured by a direct sales team
- Efficient selling processes
- Focusing direct efforts to custom/integrated selling

Currently, a number of publishers are exercising RTB as an additional revenue channel, whilst many are simply utilising RTB as a sweeping function. For a publisher who wants to extract maximum value from programmatic, they will need to redefine and evolve their strategy.

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In 2002, less than £200 million was spent on UK internet advertising – 10 years later, digital advertising spend crosses the £5 billion mark.

In 2012, digital advertising increased by 12.5% on 2011 to a record annual high of £5.42 billion – up by £607 million from £4.81 billion according to the latest Internet Advertising Bureau UK (IAB) digital adspend report, conducted by PwC.

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Numerous reports and studies show just how the RTB market is exploding, with IDC estimating that global spending on real-time bidded display ads in 2016 will be $13.9 billion. What’s more, a lot of that research seems to be focusing on the European markets.

For those who are wondering why that is, there’s a reason why real-time bidding across Europe, and especially in the UK, is generating all the big headlines: Unlike a number of other digital disciplines, RTB in the UK and Europe seems to be advancing at a much greater rate than in the US. Although overall spend is of course much higher, we’re simply not seeing US agencies spend the same percentage of budget on RTB in relation to UK agencies.

There are a number of reasons why this is the case – and most of them focus around the two countries’ respective agency environments. In particular, UK agencies have employed a more top-down approach on buying and trading for several years now, which enables them to make decisions and deploy them in a macro fashion. Digital trading teams, and the role of the digital trader in general, are not a new concept across the EU, but they’re just now starting to take fuller shape in the States.

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Google announced last week that it was making a number of changes to its DoubleClick Ad Exchange, as it continues to add the functionality of Admeld’s SSP solution to its core publisher product suite. Scot Spencer, Director of Product Management, Google, described it as an evolution of the Ad Exchange on the DoubleClick Publisher blog, but what does that mean? Is this conversion on the sell side? Do you really need a SSP and an Ad Exchange when they can both carry out the same yield management/optimisation task? How does this benefit the publisher? Here we discuss these subjects with Neal Mohan, VP Display Advertising Products at Google.

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Petteri Vainikka is CMO of Enreach.

Call me crazy, but I believe the biggest problem premium publishers face in better monetising their digital content is that they don’t know what business they are in. In other words, they are selling the wrong product.

Allow me to explain.

Since 2011, all conversation on publisher ad revenue and yield management has revolved around RTB. Only very recently has anyone dared to remind the ad tech seminar loyalists that, in fact, something as unsexy as direct guaranteed sales actually make up the cornerstone of publishers’ ad sales. Not RTB. (There is now also a healthy amount of innovation around direct guaranteed sales taking place, but that is a different discussion…)

For publishers, the disproportionate RTB debate (i.e., the debate around the sales channel and transaction model) has unfortunately distracted them from addressing a more fundamental question: What should they be selling to create a sensible and sustainable business in the digital age? (Not how should they be selling what remains the wrong product.)

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With the RTB market expected to be worth $20 billion by 2015, new findings from Adform have revealed that CPM rates for RTB-traded inventory have doubled over the past 12 months.

The research highlights the boom in the display market with demand for RTB-traded inventory having overtaken supply for the first time in Q4 2012. The increased demand has led to competitive bidding from advertisers, calling publishers to provide more real-time traded inventory.

Advertising on tablets attracted the highest engagement with a click-through rate 65% higher than that of desktops with mobile close behind with a click-through rate 50% higher. Until now, mobile devices have only represented a fraction of the total impressions in the European real-time bidding market. Previously, advertisers have also had concerns over the performance of mobile and tablet ads with a staggeringly low 2.1% of the total spend on RTB advertising allocated to these devices.

Gustav Mellentin, CEO at Adform comments, “The RTB industry is booming, but European advertisers are still testing the waters. To keep up-to-date with on-the-go consumers, advertisers need to run display campaigns on all the screens that consumers are using and over the sites that they’re interested in. The fact that CPM rates have doubled over the past year shows that RTB-traded inventory is a ‘win win win’ for publishers, advertisers and consumers.”

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While programmatic digital media buying has been established in the US for some time now, Western Europe and Japan made the headlines in 2012. With US exchanges and DSPs going global in parallel with the big ad groups, market development has been phenomenal. However, the challenges and opportunities that each of these markets presents are different. There is evidence to suggest that a lot of leap-frogging will also take place, where some of the markets outside the US will evolve their own business models and some services might be faster to reach maturation.

The British, French, German and Dutch marketplaces offer interesting contrasts. The UK has been one of the easiest and fastest growing programmatic markets outside the US, with 12% of total online ad sales coming from RTB in 2012. A large part of this growth is coming from RTB eating into the ad network share. The challenge for the UK going forward will be getting more volume, and diversifying into more channels, such as video and mobile.

The French and German markets have both been conservative; however, the challenges for programmatic buying have been different in both countries. In France, RTB has had to break into the stiff performance advertising segment and contend with search, affiliate and other performance display. The initial lethargy of publishers has been replaced with a strong desire to develop smaller exchanges and private marketplaces. It’s a bit of having your cake and eating it too: publishers don’t want to cede ground on the RTB space and have decided to start setting the pace. Don’t be surprised if direct RTB spend goes up in France over the rest of 2013.

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