Challenges & Opportunities in the Ad tech era
Challenges & Opportunities in the Ad tech era
Ad tech seems to have become so central in the advertising industry that there is scarcely any advertising news item that doesn’t involve one of those innovative companies. AppNexus is the leading independent internet technology company that facilitates and optimizes the real-time sale and purchase of digital advertising. Operating across the world, AppNexus currently employs almost 1000 people globally.
Following some recently launched initiatives by AppNexus on the hot topics of Video Advertising and Brand Safety we sat down with Jerome Underhill, VP EMEA & Alex Karageorgis, TDG’s COO to get a first-hand view of the challenges and opportunities of this industry and how these are applicable in CE, SE Europe and MENA.
► What is it that AppNexus does?
Jerome Underhill: AppNexus technology powers some of the most innovative trading solutions and the largest independent marketplace for Internet advertising. In a few words, we power the ads that power the Internet. The company was founded in 2007 and has been growing ever since.
While some ad-tech companies only touch the Buyers or the Sellers side, AppNexus does both. We have a supply-side platform, i.e. a software tool, which allows digital publishers to effectively manage and monetize ad-space and also a demand-side platform, i.e. a software tool, which enables buyers of advertising to control their media buying and achieve high-performing advertising.
As an independent technology company, we do not own or operate media properties or digital audience platforms, but are bringing together a variety of advertising technology buyers, sellers and technology providers for increased liquidity and cost efficiencies across all types of deals and transaction in display, mobile, video, and native formats.
We are committed to building a digital advertising ecosystem that supports the Open Internet. We are not only investing towards technology solutions that will effectively create monetization efficiencies, such as the AppNexus Adserver, Connected-TV offering or Machine Learning-powered Media buying, but also launch strategic initiatives such as the launch of a standard identity framework, the GDPR compliance, and Brand safety initiatives which address industry-wide issues.
► What are they key challenges that you see publishers facing today?
Jerome Underhill: From a publisher’s standpoint, the main challenge is that the current digital advertising model doesn’t allow them to monetise their quality content on an even playing field with closed systems like Google and Facebook.
Ad spend is increasingly concentrated on a few giant platforms that are incentivised to spread the content that helps their bottom line, but not necessarily the content which is needed.
Many publishers are dependent on one single provider, Google, for both traffic and ad monetisation. And despite Google’s ad revenue reported growth from 29% in Q1 2016 to 19% in Q1 2017, publishers are not seeing any gains.
The key issues to be tackled are:
- Open monetization: Publishers need new ways to monetize without depending on walled gardens like Google. To that end, we’re helping publishers like Le Figaro, Schibsted and Axel Springer free their business from dependence on those platforms.
- Machine learning: AI is coming, and it can make advertisers more effective. But we need to integrate these technologies in a way that not only makes us more effective, but also retains transparency and human creativity.
- Video at scale: Every publisher and advertiser we talk to says they want more video – it’s the most powerful advertising format around. AppNexus is intensifying the investment on this front: the Video Marketplace is supporting multiple Instream and Outstream formats, and is also connected to major buyers.
► What about advertisers and buyers and the key advertising challenges they are facing?
Jerome Underhill: From an advertiser or buyer’s standpoint the main challenge is to maintain full control of our media buying, have transparency throughout the campaign, and ultimately maximize the ROI from their digital marketing campaigns.
The solutions we offer are addressing this need.
- Brand safety: Marketers need to be able to trust that their ads won’t appear next to hateful, extreme, or misleading content. That’s why we’ve been proactive in removing domains that don’t meet our inventory quality standards from our platform.
- Leverage a fully open data return path available to buyers. AppNexus offers powerful data intelligence in near real time in order to inform highly sophisticated targeting and performance optimization strategies.
- Activate cutting-edge viewable performance tools. From viewability measurement and viewable deals, to predictive media viewability signals available for manual or customized optimization, AppNexus offers powerful tools that increase viewable media performance.
- Efficiently buy quality, performant digital media AppNexus supply. This supply provides robust, transparent and efficient access to the quality, performant real time media available programmatically
- Build custom solutions on top of AppNexus open APIs.
► Have you identified any organizational issues inherent to the evolution of the advertising industry? How are you addressing those in the CEE?
Jerome Underhill: As technology and the advertising ecosystem are evolving at a fast pace, organizations both on the buy and sell side are facing challenges, which are fundamentally similar:
- Lack of transparency,
- Difficulty accessing intelligent, decision-empowering data and
- Operational inefficiencies.
To be able to fight against those challenges, we believe that the first critical step is to identify the right partners. Those are the ones who will not just deliver the right offering today, but are also investing in developing future-proof solutions, in accordance to industry-wide needs, and can offer a high level of service.
In this region, since 2013, we have partnered with TailWind, our strategic technology partner with a multi-regional agreement in GCC (UAE, Qatar, Saudi Arabia, Kuwait, Oman, Bahrain) & SE & CE Europe (in markets such as Greece, Romania, Hungary, and Czech Republic). Tailwind’s Account Management & Technical team has the expertise in across all AppNexus Demand and Supply Side technologies solutions and is constantly trained to be able to provide top-level service.
Tailwind is a strategic partner for us in the region and a valuable one for our growth. They are in the unique position working on both supply and demand, and combine tremendous expertise and scale with an experienced team of 50+ ad-tech professionals.
► What’s your take from the S.E. Europe and C.E. European markets so far? How are those markets different from the rest of the markets AppNexus operates in?
Alex Karageorgis: When it comes to ad-tech and how it enables digital advertising in the S.E. and C.E. Europe, although there are distinct differences within each market, leading to a mosaic of different phases of development and value creation, there are three unique characteristics for the entire region:
- Diverse level of maturity amongst key players: On the Sell-side, there is a part of publishers that are hesitant to apply the full variety of solutions provided by at-tech and they at the best reap only some of the benefits of operational efficiencies and automation or might outsource programmatic operations to a 3rd party. In parallel to that, there is part of publishers that are racing ahead, making investments, adopting new solutions such as header bidding and experiment and leverage technology to maximize results. The Buy-side also provides a similar picture, with practitioner attitudes ranging from conservative to fully advanced. This creates intensive educational and local market initiates needs and a first-class service level to cater for the different speeds of local players.
- Scalability challenges. Within the region, the volumes of players on the Buy and Sell side are still rather small on an individual level. The liquidity resulting from those volumes, combined with the levels of investment needed for ad-tech [tools and team expertise], require careful balancing so as to land with viable, future-proof solutions, the right mix of tools and teams, and the correct timing for ad-technology adoption.
- Partnerships as vehicle for growth. As a unique trait, within SE and CE Europe, we are witnessing a stronger trust in the value of synergies. Sellers are increasingly partnering with Publisher alliances, such as Project Agora, or sales house partners, such as the MediaFax- Thinkdigital partnership in Romania, to accelerate access to technology and programmatic marketplaces. Buyers on the other side like Mindshare in Greece are partnering with leading AdTech providers like TailWind in an effort to intensify their efforts for enhancing their organization skillset, including AdTech in their mix & developing their local data stack.
Under those unique conditions, as TailWind we partner with the leading global ad-tech companies but with local teams of experts and a deep know-how for our markets, we can help publishers and advertisers to cut through the complexity of digital business and drive their business fast forward through automated, data driven, ad-technology solutions.
► How big of an issue is the inventory quality and brand safety one? How is this being addressed by AN’s solutions?
Alex Karageorgis: Brand safety is not a new problem in our industry but we recently find that this emerging into a cornerstone for the further growth of digital advertising. We see an increased pressure for greater transparency and more third-party measurement which goes beyond the open the open-ecosystem and affecting also within “walled garden” inventory. This is not a technology issue: we now have the technology solutions to address brand-safety issues – the question now becomes on why and when this is not deployed yet and how we can actively form and support the right initiatives which will create market-wide accountability.
Jerome Underhill: AppNexus is on all ends taking the next steps to provide solutions which protect brand safety. We provide an in-platform viewability technology that enables transactions on viewable CPMs (vCPM) and also offers seamless integration with third-party verification technologies including Moat, Integral Ad Science, and DoubleVerify. In the AppNexus marketplace, we go one step further and have done a serious, concerted effort to banish unsafe supply by: enabling free viewability measurement, reporting and charging only for viewable impressions, and filtering out invalid traffic and stamping out of domains not meeting quality criteria – through human and machine-driven auditing.
To find out more on TailWind solutions, feel free to contact us.