IPONWEB: 'We Don't Consider Ourselves To Be A Commodity Product'

Nathan Woodman, was named as IPONWEB's first-ever GM of demand solutions earlier this month and will oversee the Russia-based company's positioning and expansion in the USA from its current embryonic North American base, stationed in New York City. This comes hot on the heels of IPONWEB opening of its Berlin office. ExchangeWire, caught up with Woodman, the former COO of Digilant, to find out  more about what his appointment represents for the company's designs on the lucrative US market, plus whether it signifies a change in direction of the wider company. 

In this first piece of a two-part interview, Woodman also offers insights into the working processes of IPONWEB, plus his take on the much-mooted 'ad tech power game'.

EW: You have taken a newly-created role with IPONWEB, what are you specifically charged with, and why has the company created this role at this point in time?

NW: This is a newly created role to oversee the need of demand-side clients with data assets; advertisers can fall into that category as well as data owners.

As a company IPONWEB feels there's a lot of opportunity there, as we've been seeing a lot more interest from companies that would fit that description. Usually we're kind of hard to find, but these companies are increasingly finding us, and asking us what can we do.

Ultimately, we think there's a massive opportunity for data owners to build a bespoke solution that deeply integrates into programmatically traded media into their own information and data.

The critical phrase there is 'deeply integrate', because you can do thick layers of integration. For instance if you have email addresses you can onboard through LiveRamp, so people on this list can be used to form part of an audience group, and that's one way to integrate CRM into programmatic media. We've done that a few times with clients - it has some issues in its ability to scale.

From here we can turn that into a big data [data management platform] DMP repository, and use that entire system to put machine learning on it. This would then equate to an automated media buying machine. That's the opportunity we see in front of us.

One of the advantages for advertisers is that it gives data owners the opportunity to perform programmatic media buying within their own system, preventing direct, or indirect, data leakage. It lets them control everything, as it lessens the need for them to worry about giving away their customer data to a third party.

We are starting to hear perspective customers talk about that, and that's the way I think the market is going to go, and I'm here to help IPONWEB capitalise on that.

EW: So how does your role, and the fact you will be based in the US - away from IPONWEB's Russian and European remotes - reflect the company's ambitions to increase in terms of its global footprint, as well as market profile?

NW: To a degree it is about saying: 'Here we are!' But I don't think IPONWEB is ever going to be a company that's boastful.

Although, yes we do want to be here [in the USA] for the people that start looking and are then able to find us. It's a fine balance, we don't want to hide. Again, almost everything we have [in terms of new business] is in-bound, and we want to be able to have conversations with people in the market that are thinking about the topics that I mentioned beforehand.

Regardless of whether or not people use us, I think IPONWEB can add a lot of value to those conversations.

Typically throughout IPONWEB's history it has had a long client engagement process. Sometimes we'll start to talk to a client or prospect that is just beginning to think about getting involved in this space.

As part of that process they will sit down with us, and we'll take them through. And about half the time we'll say to them: 'We don't think you guys are ready [to work] with us.'

We'll then advice them that they might be best off going back and learning a bit more about this space, or even if they can go away and use a system to see if they can deploy what they are looking to deploy.

Half of these people will go away and not come back, and about half will go away and start working with us, and are happy.

EW: What's the rationale behind that, isn't it just leaving money on the table?

NW: The rationale is that at this point in time we want to be pretty selective on the business we take. Part of that is that - and this is a big part of the DNA of the company - we don't want to fail. We won't disappoint a customer.

If you think about our product BidSwitch; it ran operationally for a year before we even said we had it. This is just part of the way we do things. We want to have some level of confidence in what we do for the client.

The clients that are able to succeed using other platforms should continue to use them, as we don't consider ourselves to be what we'd call a commodity product. We don't see ourselves as comparable to, what I'd call, a standard multi-tenant platform'. We build single tenant platforms.

The advantages to using this is in terms of what you can exhibit and control - like algorithms, decisioning logic, protection of the data and directing the system to reduce the cost of media.

But this also requires a longer lead-time. For IPONWEB, we typically have a three-month development and engagement process, which the client pays for. The payback on that doesn't be long in coming around, but again, this is not necessarily right for every prospect.

No one is going to go and shell-out hundreds of thousands of dollars on a lengthy develop-and-engage process without knowing what they are doing, and ultimately what they want to do.

So again, we want to work with clients that have 'earned their wings' working with something else, realised the alternatives [to what IPONWEB has to offer] are somewhat limited, and then we're happy to help them get to the next level.

EW: So these ambitions will require added firepower in terms of people on the ground both in the US and elsewhere?

NW: As a company we have two engineering centres in both Moscow and the more recent one in Berlin, which we intend to staff with about 40-50 engineers over the next year. Some of these employees will migrate from Russia, but the majority will be hired locally.

Over a longer period of time that same model will probably be extended to here in the US. But for now the focus is that in markets where we currently have staff, we will employ different types of employees.

Obviously business development is important, and typically we pair them up with business consultant that will engage in 'pre-selling', to walk a prospect through the possibilities of what could happen and how this integrates with their strategic objectives.

We also go about a process of hiring a technical architect - typically these are people that have held positions such as CTO - and they are responsible for designing the system for a prospect.

Like I said, our business development prospect can take anywhere from six months to up to two years. In fact some have actually taken up to four years.

We've been around for 15 years - as long as Google and the others - and in that time have had multiple conversations with clients and prospects.

Our sales cycles are long, and consultative, but the engagement process is about designing something for the specific needs of the client, and that whole process takes a long time. It's a bit more complicated than just giving a prospect a log-in to your user-interface.

Hence, we're not after 'classic media salespeople', as we have a different kind of approach.

Any client that we have gets a client-services person, as well as an account manager that's typically in an engineering centre, with one-or-two engineers working on it. The delineation is that account service and business development will work in-market, and engineering - and engineering operations will take place in Berlin or Moscow for the time-being.

EW: AppNexus has made a lot of noise recently criticising players like Facebook and Google with its talk of the 'Ad Tech Power Game', and claimed that it is very much in the corner of media agencies and traditional publishers. Does IPONWEB have a similar stance, in terms of what sector of the industry it supports?

NW: No, we don't. As a company we are out there to solve challenges across the entire spectrum. That could be for an advertiser, an agency, a DSP, or publisher. So I wouldn't say that IPONWEB is focused in any one direction, as AppNexus seem to be (going by your question). But I'd also like to be clear that we don't think we can do everything. For instance, I don't honestly think we could do all the programmatic advertising for a massive bank right now, as there is so much that their media agency does for them that is outside of technology development.

If said bank came to us and said they want to build a big advertising stack, then we would not be doing the programmatic-direct deals, or taking care of accounts payable, or creative, etc. The classic media planning and buying functions are still the domain of the agency.

When it comes to the whole disintermediation discussion, I think that we are in a situation when a lot of the ad tech intermediaries such as DSPs have been forced to perform these functions for a number of reasons.

But simply speaking, that's not something that IPONWEB do. We don't buy media, and we don't sell media; we just do tech.

There's this whole line of media, and line of business that's about 'managing the client' and their portfolio of clients and brands, by making sure they're buying in the right programmatic marketplaces and at the right price.

And again, that's none of our concern. We just build the technology, and someone else can run it. That someone can be a brand that has decided to develop a brand trading desk, or sometimes that could be a brand that has decided to go with an agency trading desk. It could be a brand that has decided to go with a hybrid model that sees us build its bidder for it, but is then operated by the agency.

The final part of this interview will be published on 18 November