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.

I’m not suggesting that pubs should go down the ad network route. I think publishers exploring this option should buy one hundred per cent of display media through the automated channels (ad exchanges, SSPs, etc) forgoing the messy relationship building with pubs in their niche. How might a publisher buy this inventory and target ad using their proprietary data? They could use Invite or AppNexus. But they could build their own. Granted there would be some resource required in building out the technology and hiring people who have experience of buying inventory across exchanges. But the opportunity is there. Not everyone can do it of course – because all publishers have good data. I’d be looking at one of the niche publishers to take the plunge – particularly those in verticals that pay fat CPMs or can generate the most ad revenue. The FT would be the best candidate. It has ridiculously good data which it can use to augment its reach.

How might the FT look to put something like this together?

- Hire a bunch of developers to build out a proprietary DSP solution that will leverage data but prevent leakage
- Bring in some exchange-buying expertise to trade across the automated platforms
- Use a vendor like Netezza to help crunch the data
- Use a dynamic creative provider
- Hire some ad net sales staff to get you on those all important media plans

It sounds all too easy. And it is to begin with. There will be teething problems. Some campaigns won’t work – and some will. But the thing to remember here is that the ad net market is worth £250 million in the UK alone, and some pubs are missing out on taking a slice of it. What you also need to remember is that the European exchange ecosystem is slowly being knitted together. Invite can plug into many of the exchanges in Europe, and because of this you will see a lot more centralised media buying in digital. A lot of it will be done from London. Shouldn’t the FT be looking at this development as a big opportunity for revenue generation.

But what about sales cannibalisation? Audience-buying will affect my tier one inventory, and I won’t be able to demand my fat £70 CPMs from the market. Well, there’s something called sales conflict management. Seeing as the FT is running its own DSP it can instruct its sales staff to stay away from certain brands, agencies and advertisers.

Paidcontent reported yesterday that the FT was in the process of launching a niche site on the FT network, as it looks to increase ad revenue opportunities. Why limit yourself to a few hundred thousand in advertising when you could be accessing a market worth hundreds of millions Europe wide? The FT could own a chunk of the media buying market in finance if it wanted. But is owning and running a DSP a bridge too far for any publisher?

Munich, June 1st 2010. AdScale, the leading marketplace for online advertising in Germany, has announced today the successful conclusion of the financing for its expansion in continental Europe. TIME Investors, a Paris based specialized investment firm providing strategic support to European Telecom, Internet, Media mid-sized companies, is investing more than 5 million euros in AdScale (www.adscale.de) for a minority shareholding and is thus expanding the circle of existing investors, beyond the European Founders Fund and Holtzbrinck Ventures.

Matthias Pantke, managing director and spokesman for AdScale’s management: “We are delighted about the investment of TIME Investors, which is proof of the great potential that AdScale holds in store. The additional financial means, combined with the expertise brought by Time Equity Partners, management Company of Time Investors, will give us the opportunity to further expand Adscale’s product portfolio and geographical reach. We will introduce further advertising formats and booking options to our business model this year. In this way we will strengthen our position as a leading online advertising marketplace in Europe.”

Jean-Luc Cyrot, partner at TIME Equity Partners, management company of TIME Investors : “It is our main goal to operate at the heart of the digital revolution. With a very solid business model, AdScale has experienced stellar growth thanks to an impressive and highly scalable online advertising platform that can be leveraged on a pan-European footprint. And most of all, AdScale is led by an excellent and visionary management team with which we look forward to partnering. The aim of our investment is to substantially support the growth of the company over the coming years.”

Sven Achter, partner at Holtzbrinck Ventures: “AdScale has proven from the very start how well the business model can work in Germany. Within a very short time frame the company has developed into the leading and a profitable marketplace for online advertising in Germany with a triple digit growth rate. We are convinced that the future will belong more and more to the online advertising marketplaces and are looking forward to further expanding the market leadership of AdScale together with TIME Equity Partners.“

About AdScale

AdScale is the leading marketplace for online advertising in Germany, which brings together advertisers, media agencies and publishers. Via AdScale, advertisers, advertising agencies and website publishers buy and sell video, display and text advertisements.

The company offers a portfolio that currently comprises over 3,500 websites of all sizes, which advertisers can book self-contained via a single platform. As a real time and a transparent platform, AdScale offers publishers and marketers a tool for controlling inventory use. According to comScore, AdScale has achieved a reach in Germany of almost two thirds of all internet users (64.9 percent or 35.1 million unique users in April 2010) in the online display sector and delivers nearly 8 billion ad impressions a month in Germany. Advertising spaces are auctioned for every ad impression. As such AdScale achieves fair prices while at the same time creating transparency. Launched in September 2007, AdScale was founded by Klaus von Doemming and Stephan Kern. Since the beginning of 2008 the management has also been reinforced by Matthias Pantke. Further information can be found online at www.adscale.de.

About TIME Equity Partners

TIME Equity Partners advises and manages a 100€m equity allocation granted to TIME Investors by four European entrepreneurs through their joint company Yam Invest NV.

TIME Equity Partners is led by Henri de Bodinat, Jean-Stéphane Bonneton and Jean-Luc Cyrot, who have a strong experience in the Telecom, Internet, Media sectors. TIME Equity Partners focuses on companies with a proven business model and profitability and high quality management team, it provides the funds necessary to finance organic or external growth. TIME Equity Partners is above all a strategic partner for the management, thanks to the proven experience and expertise of its partners, both in investing, consulting, creating and managing Telecom / Internet / Media companies.

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.

Let’s suppose this deal does happen, how will the rest of the industry react? ExchangeWire shall now make some ridiculous (but fun!) predictions about possible repercussions:

- Microsoft will buy Appnexus: with its own exchange platform in the works, Microsoft will likely buy in DSP capabilities to counter Google’s move
- One of the big holding companies will buy MediaMath, X+1, DataXu, Triggit or Turn: the holding agencies will feel very uncomfortable with Google being in the DSP space, and will want their own platform.
- A possible surprise buyer will pick up a DSP: we could see Adobe, Ebay or – wait for it – Facebook buying a DSP. Think of all the data Facebook could leverage in a media buy. Its targeting could only be matched by Google.

You’ve recently went through a rebranding and a repositioning of the Infectious offering. Can you explain the Infectious Media proposition in more detail?

MK: Yes, it’s simple, we make display advertising work for our clients. Clearly there’s a lot more to our business in terms of how we do that but that is our proposition and how we sell our services. We operate exclusively in the ad exchange space and offer these services to both advertisers direct and to agencies. We’ve purpose built both a team and trading platform, Impression Desk, to service this opportunity in the UK and Europe.

The rebrand and new website was about reflecting this focus.

How in your view has the exchange market evolved in the UK since the launch of Infectious Media?

MK: There wasn’t really one when we started so it’s come a long way! Right Media was the only place we could trade and was in itself the preserve of a few very smart networks, it’s incredible really that a whole new ecosystem has developed in the space of two year, the pace of change is staggering. The component areas of the value chain seem to be settling down a little now and both publishers and buyers are starting to do deals with and build infrastructure around DSP’s and SSP’s in order to service the opportunity. It’s not yet clear how the traditional intermediary, ad networks, will respond to these changes.

Do you think there is still not enough quality inventory available through automated channels?

MK: I think there is quality inventory available at scale but an issue that buyers will find in this environment is that it’s hard to find and the ways of doing this differ by platform. All supply sources take a different approach to defining quality as do all the DSP’s so it’s a minefield with no standardisation. We have chosen to tackle this issue head on and have invested a lot of time and effort in to devising our own manual vetting procedure for inventory sources. We are about to introduce our own transparent classification system for inventory that we vet ourselves so watch this space.

Has the arrival of the SSPs, the DoubleClick Ad Exchange and now the Orange Ad market improved the buying opportunities offered through automated channels?

MK: There is momentum growing on the supply side and these intermediaries are driving things forward. Ultimately this makes sense for everyone involved, with lower transaction costs associated to this channel and CPM’s increasing substantially in the last 6 months alone. Part of the education process for publishers is that the CPM’s that they receive for their inventory are higher than those they receive from a network as the buyer has much more opportunity to recognise value in the platform environment than they do in a bulk network buy. We, on average, currently pay double the average CPM in the Doubleclick Exchange quite simply because we can see the value that our activity is driving for the advertiser and bid accordingly

Do you think this volume on the sell-side will attract a lot more display spend into the exchange eco-system?

MK: I don’t think anyone on the demand side is under any illusion that this is the way that the market is going and needs persuading any more. The barrier is more around attaining the skills and technology to operate effectively and the speed with which this will happen.

Data plays a huge role in the automated buy. Do you think the absence of UK-specific data sets from the data exchanges and other platforms is hindering the development of the exchange eco-system?

MK: The data market has been slow to develop in the UK but there are now some companies entering the UK such as Quantcast and we welcome that development. I would also say that from an Infectious Media perspective this has meant we have had to focus our product development around data analysis and decisioning in the absence of ‘off the shelf’ target audiences.

We speak to many of the top UK publishers and they are keen to find ways to monetise their data so it will just be a matter of time before this market develops further and there is room for some big winners in the UK and European data market.

Is Infectious currently buying inventory through RTB? Would you say the buying process is different than a typical auction buy on the Rightmedia and Adx exchanges?

MK: Yes we are currently buying via RTB in the UK and across Europe. The buying process is no different in many respects, this is just the buying of display media after all. The difference is the amount and richness of data points that can be passed through to the buyers on each impression but I don’t yet think this is being fully exploited by the supply side especially. The more information a publisher passes about an impression, the more of a chance that we will see value in that impression and bid higher accordingly. What has been a real game changer for Infectious is impression level reporting which is a huge volume of data that we take in to our data warehouse to analyse but has meant we can scrutinise performance to a new level of granularity and optimise accordingly.

Infectious is an exchange trading specialist – far removed from a traditional media buying agency. What kind of skills does Infectious, which puts technology and data at the heart of its business, look for in new hires?

MK: There is some cross over with media buying agencies in what we do but we’re a very different type of company. Exchange trading is our only service and we offer this to both advertisers and agencies and because of this we have built a very specialist team and infrastructure. Our last three hires have been a statistician, a business information systems architect and an agency account manager. So some cross over with an agency in terms of personnel but in the main something completely different. Coming from large media agency backgrounds it’s been a breath of fresh air for Andy (co-founder) and myself to be able to build the team from scratch with new skills and a company structure that is fit for purpose. To date we have not employed anyone from a pure media buying background.

Now that the DSPs have finally arrived and RTB inventory has come onto the market, how do you see the space developing in the coming months?

MK: The pace of change is rapid at the moment and will not be slowing down any time soon. The coming months will see the completion of the infrastructure for the UK platform trading revolution, new UK data centres opening, trading desk offerings appearing, SSP’s hitting scale and we hope a more open debate around data and privacy that needs to happen if we are to successfully self regulate as an industry.

Oh, and loads more hype, as ever.

There’s much confusion about what Vivaki does? Is it buying platform? Is it a crack exchange trading unit? Can you explain the Vivaki proposition in more detail?

MB: Vivaki is the strategic entity created by Publicis Groupe to leverage the combined scale of its media and digital operations, which represent nearly $60 billion dollars in global ad spend and influence. VivaKi aggregates the marketplace influence of five autonomous brands, including: two global media agencies, Starcom MediaVest Group and ZenithOptimedia; two leading digital marketing agencies, Digitas and Razorfish; and a premiere futures practice, Denuo.

On behalf of its agency brands and their clients, VivaKi faces the market to help identify and build technology, message distribution, audience aggregation and content solutions for the future. VivaKi also includes a “Talent & Transformation Practice”, which leverages the scale of the VivaKi brands to develop and deliver tools and approaches designed to attract, develop, train, motivate and reward the world’s best people.

Sitting at the core of VivaKi is the VivaKi Nerve Center, which serves as a think tank, R&D centre and testing ground to activate new pathways for clients to connect with consumers in an increasingly digital world.

The key objective of the VivaKi Nerve Center is to help deliver better solutions for our clients as the marketing landscape continues to evolve and accelerate at a fast pace, collaboration within the VivaKi family, and across the Groupe, is essential.

To succeed in our mission, the Nerve Center will focus on some key areas to empower our VivaKi agency teams and clients:

Global Platforms & Products: Developing global platforms and proprietary products that help our agencies differentiate and compete in the marketplace. Products will be supported by an advanced underlying technology and data infrastructure that delivers speed and scale.
Industry-Leading Partnerships: Creating strategic global partnerships that provide tangible value for our clients and partners, while differentiating against the competition.

Innovation & Thought Leadership: Investing in innovation and next generation emerging opportunities, like The Pool, which will validate our leadership position in the marketplace.

Our ad exchange solution is called Audience on Demand and is therefore a key strand in the global platforms and products category above and indeed innovation. It’s one of the most exciting areas to touch all agency groups in recent years and needs to have a defined and aggressive focus put upon it. Vivaki Nerve Center has worked very collaboratively with the brands in delivering the Audience on Demand platform to their clients. We are live with Audience on Demand and really excited by the performance of the solution.

Can you elaborate a little more on your role within Vivaki?

MB: My role in is Managing Director of The Vivaki Nerve Center in the EMEA. I report into the Global President of the VNC, Curt Hecht. The VNC has made significant progress in the US and my role is to work closely with the brand management and digital teams to establish how the VNC can help them in delivering the future-facing digital solutions that our clients are asking for everyday. Ad exchange trading through Audience on Demand is a significant area of work for me.

What’s your perspective on automated trading and audience buying through exchanges and other demand sources?

MB: I have been blown away by it. I may be biased and perhaps my background lends itself to making this exciting to me but when you see the potential of automated buying you can’t help but be impressed. It’s worth saying that automated buying is a little misleading. It requires clever optimisation strategies and insights that the agencies need to lead through talented people. I would not want people to think that you a press a button and it’s all done. Anyone who thought search bidding would be automated would testify that is not the case – it is search bidding times ten so definitely not just automated.

The trading platform allows you to target exactly the individuals you want at the price you want. You are buying one impression at a time which makes a CPM approach look outdated although it is not the death of the CPM buy just yet, not least because media auditors would not know what to judge us on! I believe it will ask questions of every agency trading model to some extent or another. It will also challenge auditors to stop judging agencies on an arbitrary discount off a pool metrics, and force everyone to consider more performance related contracts. I think for now it lends itself more easily towards the performance models but down the line I can see far more being traded through this method.

Do you think that large European holding companies like Publicis are now seeing ad exchanges as an efficient channel to buy ad inventory?

MB: I think the large network groups get a hard time for not changing enough and being slow to react. In some ways that may be true but agencies today are very different to those of 15 years ago. They have completely transformed: agencies realise change is inherent in what they must deliver year in year out.

Ad exchanges are just another media / trading / targeting opportunity that have come along, and agencies will embrace it and make the most out of it on behalf of their clients. My experience so far is that all the groups see the benefits of it but that will vary by group as some are more advanced than others. You will see who believes in it the most by how quickly they grow their ad exchange spend because once you start to see the results, clients and agencies alike will want to move their budgets into new the model.

Do you think that trading on ad exchanges makes it easier to leverage agency and client data to deliver better campaign performance?

MB: Trading on ad exchanges will allow data to become more important but actually it’s not the exchanges where the benefit lies but with the use of DSPs like Audience on Demand. It is this technology that allows us to best use data to enhance the performance of campaigns and target only those users that are most likely to deliver a beneficial response for our clients.

The combination of our clients being able to retarget their visitors but on a much larger scale with the introduction of third party data means we can turbo-charge our schedules to deliver at the right cost and at the right level of volume. Those third party vendors need to move quickly over here. We already have demand and they are a little slow to get going. I was pleased to see Phil moving from Yahoo to Quantcast, perhaps a sign of things to come.

Does Publicis have an exchange strategy for Europe, and if so will this be headed up by Vivaki? Are there plans to devote more resource to developing this area of the business?

MB: This is not a UK or US only market place. It will become important across all major markets so of course we will grow our business in those countries. Many of our major European markets are already testing different models and gaining from the insights. Vivaki Nerve Center will take the route that drives the consistency and ability to learn as a group and not at a country/agency level. We are in the very formative stages of this area so it’s important we all learn from each other.

Resources will evolve over time. Some people will re-skill into this area, some will be recruited. But we have time yet to get into that. Rest assured though that the number of people working in this area will grow substantially!

What do you think are the key difficulties in moving an agency toward automated media buying? Is it the lack of technology and data skills that exist within the agencies? Or is it a lack of technology?

MB: It’s not a technology issue. We have the technology and it works. I am sure all of our competitors have their technology too. Some will work better than others perhaps, but generally I don’t see that as an issue. Technology should not be the differentiator for agencies, it’s the people behind it and what it delivers that counts. Clients do not want pitches where we all get our technology out and wave it about; they want to see insights and results.

In Vivaki there are pools of people who understand this new area and those that know less about it but is that not always the way? Over time we will train people and recruit people so that we have the right level of understanding and evangelism in the business. Look how agencies changed around search. We had the same discussions back then and we now have these amazing skill sets around search in the agencies, so I don’t really see too many issues. If you think the opportunity is a good one, you can make things happen.

Do you think the arrival of DSPs into the European market will help agencies bridge this technology and skills gap?

MB: DSPs will allow agencies to build campaigns across multiple ad exchanges, create data pools, and control frequency etc across the whole playing field rather than at a site or network level. They will also provide us with the largest search area when we are trying to find the elusive consumers who have visited our client sites previously. DSPs are enablers so of course it’s a great innovation in the marketplace globally.

I would say that I believe a true DSP is one that’s only interest is in providing technology to do all the above. It should not to try to resell inventory or have morphed from an ad network. There are many blaggers out there and it’s important that people choose carefully in who they work with as you may discover that the systems they provide are not as future-facing as you thought. The market place is very grey around the edges!

What’s your view on real-time bidding? Is it a game changer for the display market? Or are there still fundamental problems that need to be worked through (such as the computational costs) before we see the benefits?

MB: It works. Our campaigns are delivering great results on the RTB strands of the campaigns. I think RTB will be affected by many different elements not least volume of competition, which will only increase. But this is where the clever use of data helps you in RTB: only you know what is deemed a valuable cookie. Hence you will be bidding on it, not the rest of the world. This is different to search where everyone knows that if you bid on home insurance you will sell insurance. This is a huge benefit for ad trading – the agency knows who is valuable not the publisher telling us what is valuable.

Overall I believe that RTB will be a game changer. Suddenly impressions are valuable again in the volume game. Interestingly though, they are valuable from a data perspective and not so much from a context /channel perspective. The rules have changed. What’s premium now?

How do you see the European exchange space developing over the next twelve months?

MB: I think you will see many of the major players in the US getting people on the ground here to push into big European markets. The ecosystem is developing rapidly in Europe, and it will not be any different than the US. There are already companies up and running in Europe, providing ad serving and other services, and they will try to steal a march in these markets. The DSP pure players will soon be driving a more objective approach across Europe. I also think we will see the likes of Google really ramping up in the markets here, which in itself will drive liquidity.

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.