There’s a new native SSP in town and it’s been built by ex-fintech engineers. Still working with beta partners, but launching imminently, ExchangeWire speak exclusively with Simon Gilbert (pictured below), CEO, Patrius, who draws the many parallels between ad tech and fintech, explaining why there is a need for an independent native SSP in the ecosystem and what Patrius will bring to the table.
ExchangeWire: Your background is in investment banking technology. What prompted you to move into the world of ad tech and build a native SSP?
Simon Gilbert: The financial markets facilitate billions of transactions every day using highly sophisticated real-time trading technology. The online advertising space has adapted a model in recent years to allow real-time programmatic trading of adverts across connected devices through the OpenRTB protocol, but has struggled to make this model scale. The issues are not only technology related, but lean further towards an underlying uncertainty with supply sources, brand safety, and exposure to fraud.
Both industries rely on real-time technology to transact between buyers and sellers, but whilst both markets are prone to fraudulent activity, the key difference is a lack of regulation – something which inherently shifts the market’s focal point towards prioritising anti-fraud mechanisms. We’re striving to raise standards in the ad tech industry to match the level of anti-fraud sophistication that governs global financial markets.
Patrius was built from the ground up, as a native-first platform. Drawing on the parallels between the advertising market and the world of fintech. We’re coming into the ad tech industry with a fresh pair of eyes and a different perspective. Our primary competitive advantage is, therefore, not only our previous experience in building truly scalable high-frequency real-time trading platforms, but how to safely transact between industry participants and put the trust back into the marketplace.
Why does native advertising need an independent SSP? Is the technology currently lacking in the industry in general?
We’ve seen numerous companies enter the native ad space. However, a conflict of interest frequently presents itself – with major players promising to deliver great returns for the publishers, whilst equally making advertiser ROI a priority.
In some cases, we’ve seen SSPs with their own bidder plugged in on top, thus creating a scenario where the demand that they bring in from their own insertion orders is having to compete with their external buy-side partners; and all of this occurs under the hood of an auction that the SSP controls itself. In the financial world, this type of setup is forbidden, so this state of play presented itself as a clear anomaly to us. In an open marketplace, transparency is key to ensure that volumes can scale, whilst business trust can prevail.
The industry as a whole needs to take a more long-term view of its approach to trading, which, in the short-term, might reduce revenues, but over time will prove to be worth the investment as the desire to make a quick buck is pushed aside and the standard of impression quality and execution increases. Safer trading environments will promote greater volume of transactions, which will eventually maximise revenues for participants.
How does Patrius solve some of the existing challenges publishers face with native advertising?
The industry has continually worked to iterate the design of OpenRTB and move the market forward, such that we’re now in a state where our open trading schema is well-equipped to capture a significant amount of key information. The problem is that it’s rarely populated to an adequate standard, either because the provider of the bid request does not have the technology to capture all of the context that a buyer might be interested in, or because the demand source itself is not plugged directly into an unchained source of supply that sits directly on top of the tag (and, therefore, that SSP does not have access to the page itself and cannot parse the information on an ad-hoc basis).
Our dynamic tag sits directly on the page itself, allowing us to use semantic and contextual relevance algorithms to determine the sentiment and context of each web page for which we generate an impression. This ensures that our demand-side partners have a broad and detailed insight into what they’re buying, and can, therefore, align their bidding strategy to the most brand-safe, contextually relevant and appropriate website content.
You have developed an ad fraud detection solution within the SSP platform – what is the importance of this?
Programmatic advertising is an attempt to solve that hoariest of marketing clichés: “I know half of my marketing is working; I just don’t know which half.” To begin with, the half that doesn’t work is the half that’s plagued with fraud. The difficulty, therefore, is not in how to prevent it, but how to spot it in the first place.
If the intention with native advertising is to produce click-through rates that resemble those of editorial content, your starting point has to be an ‘anti-fraud-first’ approach, where the supply is clean and vetted. We’ve self-funded our technology to allow demand-side partners access to this functionality as a standard, rather than them having to allocate media dollars to third-party vendors merely to check that the supply sources they’re trading on are brand-safe and accurately representing each impression.
Smaller buy-side players that are budget restrained, and unable to integrate any form of fraud monitoring service in their current setup, are typically left exposed, thus, forcing them to trade blindly on their supply and then deal with the discrepancies retrospectively. We’re giving them the ability to de-risk their trading strategy from day one.
How does all of this tie into the great ad-blocking and page-loading debate? What are you doing to manage this?
Ad-blocking software has become the key weapon in any ad hater’s arsenal. This technology is eating into display advertising revenues, and ensuring a poor return on investment for media buyers who focus on banners as their main medium for brand engagement and advertising campaigns.
Recently, we’ve seen the emergence of the acceptable ads initiative, as pioneered by Ad Block Plus who state: “We believe that this initiative is a sustainable middle ground between the user’s choice to use ad blockers and the continued need to support free online content with advertisements.”
The initiatives criteria for unacceptable ads centres on display advertising units; whereas the criteria for acceptance follows the form and function of native ad units. The upside for advertisers who invest in native advertising units is, therefore, that their efforts to promote their brand and content will not be diminished by ad-blocking software. Intrusive adverts are counterproductive to advertisers; and native advertising spans this sustainable middle-ground in the least intrusive and most effective manner, working to satisfy users, publishers, and advertisers alike.
With scale, there are always challenges; and the industry is all too aware of the issues with page-loading times and the fallout from users as a result of this. We’ve focused carefully on these aspects when designing our dynamic tag, to ensure that users’ browsing experience isn’t degraded by poor-quality loading times. After all, happy users are more engaged users, and we’re working hard to maintain that trajectory.
Our platform is built with low-latency, high-frequency trading in mind, ensuring campaigns can be scaled effectively, thus, adhering to the true properties of programmatic trading.