When it comes to the latest funding news, the ad tech year in Europe ends on a high. Ad tech provider Adform has just bagged USD$21.5m funding from the Scandinavian Pension Fund, Danica.
In this Q&A with ExchangeWire, Adform co-founder and CEO Gustav Mellentin explains why the funding match with Danica is a long-term one, where Automated Guaranteed is going and how data protection is becoming increasingly important for the ad tech provider.
ExchangeWire: The bulk of your new USD$21.5m funding will go to your US expansion; but since the investment comes from European sources, what are your European plans?
Gustav Mellentin: The US is of course a big part of it, but if you look at actual investment, a lot will go into expanding our footprint in Europe, for sure, and a lot will go into further product development. Of course, especially the US and other new markets have a big part in that, but in the end, a very significant part of it will go into strengthening our presence in some of the big European markets as well.
What were the reasons for your choice to take European investment instead of US?
We were speaking to a number of parties, but I think [such a decision] is always about strategic alignment and alignment of culture, and how you see the market developing. It wasn’t a specific US-versus-Europe decision; you always go for a party where you think there is really good alignment. That’s what we have in terms of strategy, how we believe is the best way to build a business, the long-term vision, and how we approach the market. And then it was also about what they expect. Danica said in one of their releases that they are looking at this as a long-term relationship, and they are also looking to put more money into Adform. Danica is a very big fund, maybe just short of a €100bn; so they definitely have the capacity to follow up down the line, which is also important for us.
In September this year, Adform started Automated Guaranteed. Why did you decide to introduce this, and how is that working out for you?
Our strategy is to work with premium clients, both on the demand as well as the supply side. That has been our strategy all the way, and it continues to be. I believe that the guaranteed marketplace is part of that and will continue to be. No one is going to challenge programmatic, but I think there will still be a very big opportunity in the guaranteed marketplace. As we see more new marketplaces come on board, they will not all go programmatic. There will still be a big marketplace across mobile and web and outdoor and TV. To me, one of the big promises is automated guaranteed as a way to secure that demand and supply meet each other in automated, efficient, and guaranteed fashion.
Is there any news yet on the integration of further third-party ad servers for Automated Guaranteed?
For the moment we have focussed more on supply than additional demand. But it is definitely on the roadmap to get access to more demand. We have incoming demand and we are trying to create a match between the demand we have and the new supply. It is part of our DNA to be open and independent; and as we go on, we are definitely open to integrating new demand sources.
What are your predictions for Adform in 2016?
Cross-device is definitely something we see as increasingly important. We have launched a number of initiatives there and will continue to follow up with that. We are seeing an exceptional interest in our newly launched DMP, both from the activation standpoint and from a data management standpoint, as well as a data protection standpoint. Clients are concerned about their data floating around in the market, and we want to be able to protect it. From a legislative perspective, there are European companies wanting to sign up with other European companies that respect European legislation and do not throw their data into a ‘big black hole’ where they don’t know what is going to happen and whether these companies respect European legislation. The data side of things is something that is becoming increasingly important for us as a tech provider – making sure that we cater to the needs, both from a business point of view, but also from a defensive, protective data point of view, in terms of complying with legislation.
Talking about new things, native is an important topic for us. We are seeing a lot of traction with mobile in-app, so we are focussing more on making that happen. We see many publishers who are monetising mobile insufficiently and we are definitely out there to help close that gap by creating marketplaces, but also creating strong demand.
And automated guaranteed – we see that as being a new promise. We do believe that we can automate 80% of the guaranteed market – but of course that will not all happen in Q1.