As brand and performance advertising continue to converge, issues like viewability, verification, and brand safety, are still some of the hot topics that need to be addressed across the industry. Dan Slivjanovski (pictured below), CMO, RhythmOne, talks about how they address these issues, the evolution of the value chain, and the importance of being a full-stack solution.
ExchangeWire: RhythmOne has been on an acquisition spree recently, with the latest acquisition being RadiumOne, and YuMe on the horizon. How has this contributed to your overall strategy?
Dan Slivjanovski: Five years ago, the advertising value chain was somewhat simple. Brands worked with agencies that bought media placements from websites that attracted the advertiser’s target audience. Planning and buying of media happened with a handshake, negotiation, and the signing of an IO. With the proliferation of programmatic trading, the value chain has grown more complex. Ad tech extended the chain and solutions like SSPs, exchanges, DSPs, and DMPs entered the picture. While these technologies automate the buying and selling process, they also create complexity by increasing the number of steps between the advertiser and the consumer, taking a share in the process and often diluting ROI for both advertisers and publishers.
What we’re seeing now is an integration and streamlining of the value chain. Point solutions are finding it difficult to thrive alone and are increasingly being subsumed by larger, full-stack offerings. The market is consolidating into a handful of end-to-end marketplaces that have massive network effects and liquidity. These are all entities that have supply-side scale combined with integrated demand solutions. RhythmOne aims to be a credible alternative to these end-to-end players. We believe that the most efficient marketplace removes as many tolls as possible, reducing reliance on third-party intermediaries and delivering material value-add to advertisers.
Our M&A strategy has been one of forward-integration. Some of our recent transactions included the acquisition of exchange technology that helped us unify our supply sources and – through RadiumOne – the integration of a data-driven, performance-focused DSP and DMP. With the acquisition of YuMe, we gain access to a leading data-driven marketing platform, premium inventory (including connected TV), unique consumer insights, cross-screen targeting technology, and established demand relationships. By integrating their technology, supply, and data into our exchange, we will have a sizable audience footprint plugged into a single marketplace. This opens up maximum optionality in terms of how a buyer engages with us, and how they reach their target consumers.
As a result, RhythmOne is one of the few providers that has its sights set on providing a true end-to-end, full stack, technology solution for online advertising.
How is RhythmOne differentiated from other full-stack solutions?
Brand and performance advertising are converging. Once upon a time, media buying consisted of selling a number of impressions at a specific CPM. Today, brands are measuring success around viewability, or verification (elimination of nonhuman traffic), engagement, brand safety, and an evolving suite of quality and performance-driven KPIs.
That is one of the principal ways we are adding value to all of our inventory. RhythmGuard, our proprietary brand-safety filtering technology, eliminates suspicious and underperforming traffic before, during, and after it reaches the marketplace. According to our last benchmarking report, we blocked between 30-60% of traffic entering our platform. Filtering requests in this manner allows us to pass along a far more concentrated set of impressions that are of high quality. Leveraging this technology, we’ve also built and packaged private marketplaces that enable us to guarantee quality against specific KPIs directly through our exchange. Achieving these KPIs efficiently, and at scale, is a major differentiator.
What are the advantages for advertisers to look outside the Facebook/Google duopoly?
These walled gardens have the benefit of addressability. It’s logical that spend is going to consolidate there and I don’t see that trend shifting considerably, nor do I see it as a gating factor to our success. We think there is opportunity and motivation for advertisers to complement their spend on these platforms with partners that fall outside the walled gardens, not only to access inventory that is perhaps not as well represented in these platforms – like connected TV – but also because independent platforms are open to providing greater transparency. A duopoly doesn’t make for an efficient marketplace in the eyes of advertisers. Competition helps to drive innovation and offer choice. That said, any platform that is going to succeed in this environment not only needs to be full-stack, but also add value in terms of quality filtering, inventory guarantees, and unique data targeting. We’ve developed our platform with just this aim in mind and we continue to find a very receptive audience to our mission from all sides of the ecosystem.
Concerns around viewability, verification, contextual relevance, and brand safety continuously come up in our industry, how are you addressing each of these?
Nonhuman Traffic (NHT)
NHT has two main categories as characterised by the Media Ratings Council (MRC). One is general invalid traffic (GIVT), and the other is sophisticated invalid traffic (SIVT). GIVT is traffic that is generated through bots, spiders, invalid names, and invalid IPs, for example. As the name implies, SIVT a little more complicated and is generated by bots or crawlers that are pretending to be legitimate, or ads that are delivered by hijacked or malware-infected devices. Often, it manifests as a high frequency of impressions that are coming from the same user, cookie, or device – exceeding what any one human could reasonably do online. And then there's domain and URL spoofing: a domain representing to be CNN, for example, but actually a fraudulent domain where traffic is being directed through a bot.
We screen for both types of fraud, using different methodologies and technologies. We begin with a rigorous manual screening process of all supply partners, including a review of domain history, privacy policies, and content quality. To combat GIVT, we maintain a comprehensive set of block lists (IP, User, Device ID, Domain) gathered through our own intelligence and by working with third-party providers. Finally, as part of RhythmGuard, we have developed a proprietary scoring algorithm that combines data from best-in-breed third-party verification partners – the same ones that the demand side employs for their own verification – with our own data and machine-learning algorithms to identify and eliminate SIVT. We also continuously monitor our supply relationships and suspend or even terminate partnerships if quality issues persist without remediation.
By using algorithms to understand the correlation between in-view ads and viewable ads over time, at a domain or user level, we can then extrapolate and predict a viewability threshold with a high degree of confidence. With the power to predict viewability pre-bid, this critical KPI has now become the basis for the way we package inventory. We're actually packaging this inventory into PMPs and guaranteeing achievement of designated viewability or IVT thresholds – or we’ll give you double the difference in impressions back. So, we completely de-risk the buy for the advertiser before they spend a dollar. In a way, we’ve taken the same filtering technology that was employed forensically after the buy, and pre-filtered the inventory instead.
There's been a lot said about controlling where an ad shows up contextually. To address this, RhythmOne has actually co-located Grapeshot’s service servers within our data centers. Grapeshot’s adaptive page-crawling algorithm determines the value of words on a given page and across all pages previously analysed, thus giving RhythmOne the ability to effectively filter content that brands would consider objectionable, leveraging a true learning algorithm that is constantly evolving.
How do you see the current advertising value chain continuing to change in the future?
Inventory targeting and packaging has historically been the domain of the buyer. It has been the buyer’s responsibility to sort through supply, find ways to address viewability and verification, and to effectively leverage first-party data to target audiences.
RhythmOne wants to take that burden off of the buyer’s shoulders. We've invested in the technology and the partnerships to be able to do fraud screening, viewability screening and audience targeting, and have built liquid marketplaces where the guarantee is baked into the basket of impressions. We've launched a product called 'GMP' (RhythmOne's Guaranteed Marketplace), which bundles inventory that is less than 1% invalid and over 70% viewable, guaranteeing these KPIs, and removing the risk for the buyer. It makes the nightmare of delayed reconciliation a thing of the past. That’s the principal way we are pursuing differentiation from other open-stack players.