There is a developing battle going on at the moment between the ad net and agency DSP for ad spend. Slowly but surely ad net margins are getting squeezed by the emerging DSP market. Agencies, who remember have the client direct relationship, are implementing fairly robust exchange strategies now. They are looking to put a lot more of their spend through these automated channels (either through 3rd party vendors or their own platforms). Who will suffer most from this shift of budget to the DSP? The ad network of course. Price and inventory transparency remain the key drivers. But transparency remains a tricky subject especially in the European DR market. A lot of ad nets are selling blind because premium publishers don’t want to them repping their non-premium inventory – for fear of sales channel conflict. The agencies are demanding more transparency and less of the black box sales patter.

This is a difficult place to be for the ad networks. The industry Cassandras who called the death of the ad network 12-24 months might not have got it quite right, but you feel there is a big shake-up about to come. There are a couple of reasons for this? The biggest reason, which have already touched on is the rise of the agency buying platform, with ad agencies taking a more pro-active role in buying and optimising media on behalf of the client instead of outsourcing the process. Another big factor for the shake-out is the rise of the so called data economy. For years, data was given away without a thought. Its economic value was never fully appreciated by publishers. The data leaks will soon be plugged up by revenue hungry publishers and ad nets will have to pony-up for its use. And questionable tactics like burying scripts in ad tags will never capture enough data.

Ad nets do have of course access to large volumes of actionable data, but thrity-day cookie decay and regualr cache clear-outs will ultimately force their hand. Publishers will be looking to be compensated for data use. I’m not saying ad nets are in danger of disappearing. But there are too many ad nets in the UK – and with automation becoming the trend there will eventually be no business need for 80 middle-men. The bigger technology-driven and well financed operations will survive and prosper. And they won’t be satisfied with being on a media plan. Some will, but others will be looking at this from a different perspective. I envisage a future where agencies and ad nets are going head-to-head for advertiser budget.

Imagine for a minute you are top-performing DR ad network with solid tech, data and expertise. Are you going to let a third-party or agency DSP suck all your business away and leave you as an ad-hoc outsourcing solution? Of course not. The ad nets will go straight to the brands and advertisers, and try to distinguish themselves from their agency competitiors. How will they do this? They could build out a DSP proposition similar to Lucid Media or licence tech to compete with agencies trading in the exchange marketplace. The data “blind spot” could be covered by establishing attractive rev share deals with publishers. Basically the uber ad net will need to play heavily on the tech and data angle. People in the industry say ad nets and DSPs can co-exist in one harmonious space. I’m saying it’s possible but there will be less ad nets in the market and their business model is going to look a lot different than today. Arbitraging inventory will no longer cut it especially if agencies continue to put more and more budget through ad trading platforms.

Unfortunatley there continues to be a real dearth of European-focused events covering the area of automated ad trading and media optimisation. With the intention of fostering informed debate on the evolution of the display market and indeed online advertising as a whole, ExchangeWire is today announcing details of the Ad Trading Summit 2010. It will be the first dedicated European event of its kind, and will look to attract decision makers form agencies, advertisers, ad traders, ad nets, ad exchanges, ad-tech vendors and publishers across Europe. The best minds in the industry will be brought together to discuss and debate the changing face of the European display advertising market, the increasing influence of automated trading platforms and the explosion of the data economy.

Confirmed speakers for the day include: Mike Nolet, AppNexus CTO and Cofounder; Curt Hecht, President, VivaKi Nerve Centre; Martin Kelly, Cofounder and Managing Partner, Infectious Media; and Konrad Feldman, Co-founder and CEO, Quantcast. Additional details on the speaker line-up and agenda will be announced in the coming weeks. ExchangeWire will also bring you the thoughts and opinions of the event’s speakers in the run up to the actual event on September 23. Tickets are now on sale – but please note that the numbers are limited. Further event information can be found on the Ad Trading Summit 2010 site.

Neumann points out that Invite will probably get access to Google’s treasure trove of search and GCN data. This will allow it to offer buy-side clients unparallel targeting capabilities. It will undoubtedly impede other players in the space, including XA.net – a DSP which Jerry has an investment in. It is no secret that Google was planning to build DSP and RTB capabilities into DFA – and it would be logical to assume they would have allowed DFA to leverage the same search and GCN data. After looking at the timescales of getting it to market, Google reasoned that it was cheaper to buy Invite at a snip for $70 million dollars. The price does severely mess-up the valuations of other DSPs, eyeing up a possible bonanza exit. I’d say some VCs weren’t too impressed – but I digress.

Jerry is right to point out that Google is now ridiculously conflicted. It’s an ad network, an exchange and now a DSP. He points out that having insight into data and pricing from other inventory sources would give it a real competitive advantage over its rivals:

Because when Invite is integrated into Google, it seems reasonable to assume that Google will:

1. Start cherry-picking the other exchanges’ best publishers; and
2. Start front-running the other exchanges, keeping the demand for themselves****.

By giving Invite access to their marketplaces, Microsoft, Yahoo! and AOL give Google access to data about position and price of every ad that runs through them. They would be giving Google the very data it needs to outcompete them. If the other exchanges allow this, they won’t for long. Because if they do, they won’t be in business for long.

**** It’s widely rumored in the industry that Google has a double standard in exchange pricing between people buying through Google’s user interfaces and people buying through the exchange API. If Invite is an insider, it shouldn’t surprise anyone if they get preferred access.

He has a point here. But it won’t be so easy for Google to dominate completely – especially when a lot of publishers on the sell-side are hesitant to throw their lot in with Google. Rubicon, Improve Digital, Admeld, Adjug, Adscale and the Orange Ad Market are becoming the preferred automated channels for a majority of European publishers. It will be difficult for Google to “front-run” other exchanges when its own exchange only has access to millions of Mickey Mouse Adsense sites with crap content. Audience matters – but so does context. Expect publishers to be more self-aware of this. And there is no doubt in my mind the good people at Rubicon, Admeld and Improve will be pushing hard on the agnostic angle. You’d expect, if you were a betting man, Google to make it very difficult to integrate DFP with these platforms. But these guys are good at innovation – and they’ve got the resource, talent and cash to meet the challenge.

Giving too much power away to Google is not in the interests of any publisher. There needs to be competition in the space to improve pricing and innovation. Is it really healthy for a single company to have a stranglehold over a publisher’s entire income? I would call that commercial suicide. Monopolies are a bad thing. But I will say one thing for Google: it keeps everyone on their collective toes, making companies innovate and continuously push the envelope.

The Invite acqusiiton could leave some on the buy-side in real trouble – especially the big agencies. Disintermediation is a real possibility here. If I was a Google strategist, I’d be looking beyond the “unnecessary buffer” of the agencies and going straight to the top European brands. Google’s got the tech and the data – and could probably deliver better results. What to do? Make yourself relevant before it is too late. Innovate. Invest in technology. Are we getting carried away? In fairness, agencies are doing all these things already. We are still at the start of this automation process in display. And as one sage industry stalwart told me yesterday, the industry needs to stop whining about Google and get on with developing better solutions and tech for its clients. It was a good post by Jerry, but now that we know the big G’s strategy let’s see if the rest of the industry can outmanoeuvre them.

» There’s some interesting numbers in Adsafe’s industry report for the first quarter of 2010. The most striking is the percentage of campaigns running through automated platforms:

The composition of the buying channels utilized by AdSafe clients varied across the course of Q1 2010, with Ad-Exchanges / Real-Time Bidding Platforms / Demand Side Platforms serving the majority of traffic at 47% of inventory. Ad-Networks served 34% of traffic and Direct Sales served 19% of traffic. This percentage of traffic served by Ad-Exchanges / Real-Time Bidding Platforms / Demand Side Platforms increased significantly from Q4 2009’s share of traffic, suggesting that premium brand advertisers are beginning to shift a larger percentage of media dollars to these channels.

These numbers relate to the US market – and are based on Adsafe clients only. It does suggest a significant change in buying habits for display. Why is this significant for Europe? We tend to be about 6-12 months behind the US in ad-tech development. And you are already seeing significant volumes flowing through exchanges in Europe. According to Adscale CEO, Mathias Pantke, the automated market is expected to rise from 40 million euro to well over 120 million by the end of 2010.

Here’s the press release in full:

LOS ANGELES – May 25, 2010 – the Rubicon Project, the digital advertising technology company, has acquired SiteScout, the malware security technology provider, to build upon the technology that drives the brand protection and security layer of its REVV for publishers™ platform. The acquisition is part of the Rubicon Project’s commitment to engineering comprehensive technology that ensures premium Web publishers a safe, efficient and profitable platform through which they can transact with all demand channels for their audience and ad inventory.

Recent malware attacks on popular sites and apps have reduced site traffic by as much as ten percent in a single month, and with that, a parallel reduction in revenue. Across the industry, this represents a net monthly risk of nearly $600 MM, as publishers across the Internet, from Twitter to Facebook to the New York Times, are falling victim to a massive influx and growing complexity of threats related to malware or “malvertising.” Since most malware is distributed through advertisements and content served through legitimate websites, it falls on publishers to protect their brand, revenue, and customers (consumers and advertisers) from these malicious attacks. Publishers who are not proactively protecting their sites create the risk of customers becoming infected through an attack initiated on their site, spend a lot of time and money trying to chase down problems when they occur, and create a bad reputation.

There is currently almost nothing – technology or otherwise – within legacy ad server products that protects publishers, their visitors or their advertisers from malware attacks. As detailed in the Rubicon Project’s manifesto, “Principles of a REVVolution, or the ad server is dead,” the company is committed to offering publishers technology that counteracts these risks, delivering efficient and safe to all sources of demand, and providing protection to consumers. This commitment drove the company’s decision to acquire SiteScout.

“We began to look for the right security partner to help address this growing issue for publishers in 2009, evaluating several solutions in this space to complement our industry-leading brand protection technology,” said Craig Roah, COO and Founder of the Rubicon Project. “In side-by-side tests, in a live production environment with real ad tags on premium websites, SiteScout was hands-down the most effective technology. In addition, the technology is easily integrated with our platform, and the SiteScout team is a perfect fit with our strong company culture. This acquisition will enable us to protect premium publishers with the most effective and highly scalable technology solution to address the very real, very dangerous and fast-growing problem of malvertising.”

“The threats are transient, the bad guys are smart. Solving the problem of malvertising requires serious technology engineered by security experts that runs in the background to protect websites 24 hours per day, 7 days a week,” said Rob Lipschutz, CEO of SiteScout and who is now tasked with leading the Rubicon Project’s Brand Protection offering. “We are excited to integrate our team’s combined 40 years of security experience and SiteScout’s proprietary technology with the Rubicon Project and its digital advertising technology platform, REVV, to ensure publishers have a complete technology solution that enables them to keep digital media free for consumers.”

There are unique risks to publishers, advertisers and consumers from malvertising attacks:

· Publisher risks include: Revenue loss, customer loss, damage or loss of advertiser relationships, negative publicity, damage to brand, lower product sales
· Consumer risks include: Virus-infected computers, compromised privacy, decreased willingness to spend online, financial info theft, identity theft
· Advertiser risks include: Legitimate ads ‘hijacked’ for ill-intended purposes, loss of brand reputation, damage to the very consumers they’re trying to target

The new comprehensive malware protection powered by SiteScout security is available exclusively to REVV for publishers customers as an extension of the Rubicon Project ad technology platform; the SiteScout malware reporting and other product tools are slated to be available within the REVV platform in the third quarter of 2010.

Lipschutz will be tasked with leading the security and brand protection team to continue building technology innovations for the REVV platform. In addition, the Rubicon Project will open a Seattle office in the Pioneer Square district directly across from Qwest Field. The company will take advantage of the rich engineering talent in Seattle, with plans to hire in the areas of engineering, product and security.

Can you give you an overview of the Httpool proposition?

KA: Httpool is an online advertising provider focusing on emerging markets, especially the Central and Eastern European region. We provide clients with localisation services together with all segments of online advertising in the region – including premium inventory network, performance network, contextual and behavioural network, and search engine marketing. Httpool has 10 years of experience and expertise across the region serving major agencies, global and local clients with digital strategies and planning.

How does the Httpool offering benefit UK advertisers and agencies?

KA: Httpool provides UK advertises and clients a one point access to all of CEE markets. With offices in the majority of these markets we have direct access to local inventory, publishers and specifics that differentiates our offering from other sales houses in the UK. Direct relationships with local content providers in the CEE markets enables us to provide a streamlined process and a quality service to agencies so that they can execute efficient online campaigns in this region.

What markets does Httpool currently cover in Eastern Europe?

KA: Httpool has direct access to all CEE markets and offices, including Austria, Czech republic, Slovakia, Slovenia, Croatia, Serbia, Romania, Bulgaria, Macedonia, and Bosnia. We are currently expanding to the rest of the region with plans to open offices in Poland, Hungry, Turkey and the Baltics within the next 3-6 months. Httpool also services Asia via their Honk Kong and Indian offices.

How evolved is the display market in Eastern Europe? Are exchanges and automated platforms gathering much traction there?

KA: The display market is quite evolved, and in some markets represents even more than search in terms of budgets. Advertisers use many advanced rich media formats combining it with more content integration. On the other hand exchange platforms are getting lots of traction. Httpool offers a self serving platform in many of our markets, which enables local publishers to get several high eCPM products with one single tag. Advertises on the other hand can manage their own campaigns. However, there is a huge opportunity for growth for these platforms because the average ad spend around 3-4% is still low, but knowledge still has to improve.

How influential are ad networks in the Eastern European display markets? Do ad nets play an important role in aggregating inventory for local and international agencies?

KA: The importance of ad networks varies across the different Central and Eastern European countries but mostly they play a critical role in the CEE display market. The main reason is that ad networks are able to provide advertisers with various solutions, helping them to achieve their campaign objectives and get better reach in a fairly disparate marketplace.

What’s your view on real-time bidding? Has Httpool any plans to use RTB to trade ad inventory?

KA: At the moment real time bidding in the region is not the best solution. It works best where supply and demand of inventory are in balance. In CEE there is excess of supply which pushes CPM prices down using RTB. This causes some limitation in growth of markets. At the moment we are not planning to use it across our platform. Automatisation of buying and selling inventory will definitely grow as the number of buyers increases, and expertise of marketer becomes more widespread.

What current trends are you seeing in the Eastern European display market?

KA: The main trends are reflected in focusing increasingly on targeting solutions such as contextual and predictive behavioural and larger ad formats on top premium properties.

Can you give an overview of the AdScale platform offered on the German market?

MP: AdScale is Germany’s leading real-time marketplace for online advertisement. In this marketplace, advertisers and publishers buy and sell display ads, i.e. advertising space. It is possible to define ads and to plan target campaigns, simply and conveniently. As a marketplace for online advertising the pricing in our system is fair and transparent for both sides. For publishers this means that they can control their prices independently and effectively via AdScale. The price level can always be adjusted according to the efficiency of the advertising space. Therefore, the marketers have the full control over each campaign and what price it is running at. Thus, the average price level in our marketplace reflects the actual price level of the German online advertising market.

AdScale is a complete marketing solution for small and medium websites. For large websites with a higher traffic volume it offers an additional and risk-free source of revenue, which can be used parallel to ad networks and direct sales activities.

Agencies in Germany have been described as being very hands-on. Is the Adscale platform much more self-service – or does it have a service layer?

MP: We would say that agency campaigns are 50% self-booked, 50% serviced by AdScale, whereas in the direct advertiser business the majority of the campaigns are handled and booked by the clients themselves – at least 80%.

Is exchange trading getting much traction on the German display market? Do you think agencies are likely to use DSPs like Appnexus and InviteMedia for online display trading?

MP: We believe that last year roughly 5 percent of all display campaigns on the German market were traded via exchanges. The market share of ad exchange campaigns should increase up to at least 15 percent this year. The turnover of all display campaigns booked via online advertising marketplaces will triple in Germany in 2010 (from an approx. 5 percent market share up to 15 percent). Over the next three to four years, 50-60 percent of all standardised online bookings for display and performance campaigns will be processed via online advertising marketplaces and booking platforms. The rest will be sold conceptually and manually by marketers in certain environments.

Agencies are very likely to use DSP’s, but we believe that they will either build them themselves or buy one of the above-named players.

How do you see the exchange model progressing in Germany in 2010? Do you foresee the same trend towards audience-buying that’s happening in other markets?

MP: Definitely! 90 percent of all campaigns running on AdScale are not planned traditionally for editorial content. They are planned for NOT single sides but based on target groups running on aggregated traffic on multiple websites, thus running either in rotation of channel/network mode or fuelled with targeting technologies.

How is AdScale differentiating itself from the likes of Doubleclick Adx, RightMedia and other exchange and SSP (supply side platforms like Rubicon, Admeld and Improve Digital) platforms?

MP: The yield management of AdScale is today already comparable with that of the large US market players. It allows the publishers optimal inventory exploitation.

AdScale is the only marketplace in Germany that has managed to gain critical mass on the supply AND demand side. On the subject of reach/supply, we rank second behind Google content Network (comScore 01/10). In addition, AdScale differs in terms of the quality of the traffic: The booking of 75 percent of the top100 is transparent and not “blind”. In contrast, Google offers mainly long tail inventory for display, bookable only via Adsense currently. 30 of the top 30 German media agencies use AdScale for highly standardized, targeted channel/rotation campaign flights via a proprietary white label agency booking tool. 60 percent of all revenues are generated by agencies, 40 percent via performance-driven direct advertisers, thus displaying the independency and sustainability of the business model. All in all, AdScale serves between 800 and 1,200 campaigns a month, and is growing fast, 20 percent delivered by CPC, 80 percent delivered on a CPM basis. From the roughly 300 million AdImpressions a day we sell up to 50 percent, the rest goes back to the publisher as a backfill option.

Our platform is based on its own proprietary adserving-technology, complementary to all other adserving systems like Dart, Atlas etc. Positioned as an open and transparent marketplace, we believe that the supply and demand side should be able to use all state-of-the-art 3rd party applications for targeting, video adserving etc. in order to increase transaction volumes via the platform. We achieve this through a technical API, which allows both advertisers and publishers to connect their own systems in the most efficient way, e.g. data exports to proprietary billing and buying systems, planning system of media agencies, targeting systems etc.

In contrast to Yahoo’s Right Media and the Doubleclick Exchange, we prolong our platform business value chain by generating demand through AdScales own sales team, especially in the agency market, allowing us to charge on a commission basis, rather than on a license basis. We also extend our value chain by offering to manage and optimize the running campaigns, if required by the direct advertisers.

Are you seeing much brand budget running through the AdScale platform? Or are the campaigns mostly DR-focused?

MP: Both. On small standard IAB’s we mainly see performance driven campaigns, but especially the bigger formats (expandable, tandem, video interstitial….) are showing a strong development within the online advertising marketplace. Although the two formats Pop-Under and Video-Interstital were not launched by AdScale until the end of 2009, together they already made up around 16% of the turnover in January 2010.

Can you name any of the publishers currently trading on the exchange?

MP: All of them are transparent in the system at www.adscale.de.

Has AdScale experience a lot of growth since it was launched last year?

MP: AdScale recorded considerable eight-digit revenue in 2009. Thus, in 2009 we achieved the break-even point and are profitable one year after the start of the operative business. For 2010, we are anticipating a further increase in sales and expect to double the existing sales levels at least. For the German market in the coming year we expect to triple the market share of all booked online advertising campaigns via ad exchanges from five up to 15 percent. As the market leader, we will be able to benefit from this increase disproportionately.

Is AdScale offering inventory through real-time bidding? If not, are there plans to add RTB functionality to the platform in the coming months?

MP: Not yet, but we will add RTB in Q4 2010 at the latest even though we believe that this is a very hyped feature and suits mainly performance-driven direct advertisers. Secondly, RTB is not really a “big thing” in Germany yet.

Can you give an overview of the size of the French exchange marketplace? And the role Improve Digital plays in the market?

MJ: At this moment there is no ad exchange or demand platform in France with significant volumes. Some global players have not yet started in France or if they did, are at a beginning stage. There have been some announcements by the likes of the Doubleclick Adx and Weborama – which declared, during an IAB conference in January, its intention to become an ad exchange – but I have not seen any real traction in the market.

In France, Improve Digital gives publishers the ability to optimize revenues and eCPM’s from ad networks and exchanges – while protecting their premium business and ad quality policy. We have 2 billion monthly impressions in France and believe that this is a significant sign that publishers are opting for an agnostic publisher focussed yield optimiser, such as Improve Digital, instead of working directly with an exchange.

How evolved is the exchange eco-system in France?

MJ: There is more and more demand from publishers for our platform and this trend shows that publishers are ready to work with multiple partners in the form of ad networks. They see our technology as a way to prepare for the future, where publishers monetise their ad space both directly through various sales partners, such as ad networks and Demand Side Platforms.

Existing ad networks still have significant growth opportunity, mainly because of AOL’s decision to close the French office, but there are also new players entering the eco-system, particularly the DSPs. I estimate that the French market is perhaps 18 months behind the UK, but some media agencies are developing their own DSPs to buy automatically unsold impressions from publishers. In France Matiro, founded by two formers top managers of Havas Media (Yann Leroux and Erwan Lepage), are offering advertisers the opportunity to buy unsold impressions directly from their platform. A new question will arise: how will the ad networks evolve in to meet the challenges?

Are publishers now seeing the benefit of using platforms like Improve Digital?

MJ: From December 2009, we began trials with some key publishers like Le Monde, Allocine. Nouvel Observateur. At the moment in France, we work with more than 15 publishers that represent over 2 billion French impressions and we have never lost one customer. Actually we are connecting new French publishers every week. From a publisher’s perspective, the first advantage of our system is increased revenues and eCPMs. From an operational perspective we simplify working with multiple ad networks and reduce operational issues. On a strategic level, our product helps publishers gain control over revenues, ad quality and cannibalisation of premium sales.

What are the significant differences of the French display market compared to the likes of Germany and the UK?

MJ: I don’t know the other markets in-side-out, but from what I heard, the German market is very much dominated by sales houses. In France this is not so much the case and many publishers have their own sales teams. Just like in other markets, the standard IAB ad formats are becoming more of a commodity, with pricing models lowering and moving more towards performance based pricing. Standardization kills the prices, but not necessarily the margins. With our platform, the costs of trading ad space is significantly lower, realising higher margins and making the online media in general more competitive to television, radio and print.

On the other hand this is the exact reason why more and more big publishers develop special ad format or disposals, brand content areas, etc. “Opération Spéciales” or in English, “Special Products’ are the latest trend for the ad development strategy of publishers.

As a “first mover” in the French market, how would Improve Digital sell the benefits using its automated channel to monetise non-premium inventory to publishers?

MJ: When we entered the French market, ad network optimisation was a new phenomenon. Most publishers had never heard of. But if a technology is proven to work, the word spreads quickly and today we have 15 of the top 20 Comscore French publishers as clients. Using the platform is a way for publishers to prepare for the future, as I described before. Media agencies, advertisers will try to find some “Google Adwords” like business model for display. This new attitude is motivated by the “infinite inventory” that characterizes the display market at the moment. We started as a true ad network optimiser, but we are evolving towards a sell-side platform that enables publishers to optimise yield and revenues from all of their ad space, not just unsold.

Are you making any French inventory available through RTB? If not, when are you likely to allow real-time bidding on the platform?

MJ: If the publisher wants to connect to RTB, it’s a matter of opting in. Right now, we offer French inventory through RTB and have multiple global RTB partners live. Technically we are ready to connect French ad networks. As I mentioned previously, the exchange eco system is not as developed in France, and some French ad networks are technically not ready to buy through RTB.

Is the buy-side and sell-side ready for real-time bidding in France?

MJ: I hope that it will be the case with the arrival of new exchange trading specialists like Matiro and others players from the media agencies world. Improve Digital can be considered the first and the largest sell-side platform on the French market.

How do you see the display market changing over the coming months?


MJ: Like a lot of people in the French display market, I think that we are seeing the end of CPM as the key model on display. The IAB ad format will be bought on a performance based model. The fee business model will manage the premium offer. Publishers will have to find some technological solutions to adapt their performance offering for the demand side, advertisers and media agencies.

Will we see France following a similar path to the UK?

MJ: As a lot of international advertisers manage more and more of their marketing budget on a European level, I expect the whole European market to follow a similar path with most ad networks becoming DSPs and most publishers organising themselves through sell-side platforms.

Are we likely to see significant volumes through exchanges and SSPs over the coming months?
With our monthly 2 billion of French impressions, we are already seeing a significant volume, but this is just the beginning. First, because managing unsold impressions has become more and more complex on an operational level; and secondly because of the search to find new monetization opportunity. For this first year in France, Improve Digital has the objective to double every quarter the number of impressions it optimizes.

Can you provide an overview of the new Matiro offering?

YLR: We are the first and only ad exchange specialist in France that is focused on servicing the advertisers, i.e. the buy-side. We are entirely focused on allowing advertisers and their agencies to benefit from media trading: real-time bidding, impression-based optimisation, advanced targeting, combined creative and media optimization, access to market price, etc.

Importantly, we operate transparently, i.e. when working with us not only does the advertiser pay the media “at cost”, but our fee is billed separately, which means they know how much revenue we are making. We believe this is critical: we are 100% aligned with the advertiser’s own interest, and our clients can verify it.

What kind of exchange-trading knowledge and agency experience is Matiro bringing to the market?

YLR: Both of us have worked for advertisers from within digital and cross-media agencies, for 14 and 11 years respectively. We have had the opportunity to work for several high-profile direct response advertisers like Expedia, ING Direct, the French lottery, etc. In addition, I have been involved with the trading project at Havas Digital, across many markets.

How evolved is the exchange eco-system in France?

YLR: It is very early stage. Most people we are meeting have barely heard of ad exchanges, let alone understand precisely the opportunity they represent. It is both good and bad obviously. Good because we can lead this from the start, and create/define the market. This is bad because we have to shoulder all the education effort. Having said that, it’s very exciting to be at the forefront of what we think is a revolution! It is because we have lived the frustrations of media planning (i.e. traditional display) than we got so excited about Media Trading.

What platforms can you currently buy from? And where will Matiro buy inventory from?

YLR: Our trading platform allows us to buy from all major inventory sources in the exchange space, including the ones that matter most for the French market: Right Media, AdX, Improve Digital, Rubicon, OpenX/Orange Ad Market and AdMeld.

What is your view on DSPs? Are you likely to use a DSP to buy inventory from multiple inventory sources?

YLR: We are licensing the real-time trading platform that we use, and we are developing custom applications on top of it: we are adding a client interface to start with, and will continue to invest in proprietary technology.

Will Matiro look to partner existing agencies or will it try to work directly with advertisers?

YLR: In France the majority of e-commerce or online direct response advertisers do not work with multi-media or digital agencies: either they have internal teams or they work with specialised companies, say for Paid Search, or Affiliate Marketing. It is a general trend in the market place, and we have seen grow in the last few years. It is the time of the specialists, and that is fine with us!
Because of that market situation we are mostly talking to advertisers. However, we are happy to partner with agencies. Being a specialist and being the only ad exchange expert company here we are compatible with all of them!

As a “first mover” in the French market, how would Matiro sell the benefits of exchange trading to sceptical CMO’s?

YLR: Flexibility, ROI, control, top-notch ROI-driven optimisation, media and creative targeting, pay the market price and never more than the value, transparency

The Orange Ad Market is officially launching in June, promising premium inventory for exchange traders Europe-wide? Do you think it will it have significant effect on how display advertising is traded in France?

YLR: Orange’s approach is quite interesting, in that they are pushing for transparency. In the long run transparency will be very good for the market as we see it, alleviating the concerns of Brand advertisers. However, we are looking forward to seeing publishers sell inventory through Orange Ad Market. It may be too early for transparency to be “acceptable” for publishers, but hopefully Orange will prove this is wrong.

In any case, Orange is a key player, so their involvement with exchange-based trading is great news.

How do you see the display market changing over the coming months? Do you think publishers will make more impressions available through the different platforms?

YLR: We have seen great traction for yield optimisation tools on the publisher side, and we are getting great traction ourselves from advertisers, who are looking for a way to acquire new customers beyond Paid Search and Affiliate Marketing, which are maxed out for many players now. We believe ad exchange trading will become the hottest topic in the market place this year.