Founded in 2011, we bring web publishers and advertisers together via a single buying and selling solution tuned to enable publishers to maximize ad revenue and advertisers to buy quality impressions.
Can Marketers Meet Brand-Building Objectives Programmatically?
Toby Elkin, November 20, 2015 (MediaPost) -
The answer to that question is definitely “yes," according to agency executives on a panel at Sonobi’s Premium Programmatic 360 gathering on Thursday.
The lone brand marketer there, Colin Linggo, director of marketing & media at Paramount Pictures, called the use of programmatic an “opportunistic solution." While that may be the case, it can be a pretty darn good solution when brand objectives are combined with the data and predictive analytics that programmatic solutions can offer.
Barry Lowenthal, president of The Media Kitchen, called the distinction between direct-response and brand goals “bogus," adding that programmatic branded offers a “better opportunity to have a more relevant conversation. It offers an opportunity to drive relevance and more data to overlay.” Lowenthal deemed this a good thing.
Claudine Cheever, global head of strategy & design at MediaVest, argued that it helps to have agencies and marketers think about programmatic and branding together: “What’s really exciting is that we can begin to look at asymmetrical data sets to make programmatic data more interesting.”
Cheever kind of geeked out by saying she loves working with both creatives and data scientists -- and that sometimes they aren’t mutually exclusive. “It’s imperative that we bring these functions and thinking together. Then we can use data and attach it to creativity and make brands thrive.”
Jordan Bitterman, chief strategy officer, North America, at Mindshare (who I recently interviewed at a true[x] event), maintained that marketing technology is driving a kind of mashup of data that can be used to achieve client objectives via data decisioning. But Bitterman also said that the creative process within the context of programmatic media is lagging behind.
For those concerned that programmatic squashes the creative process, Bitterman maintained that creative can be optimized in ways that don’t “injure the creative brief.” It seems that you just need everyone in the room together. Cheever agreed. She wants the creatives, the technologists, and the data scientists sitting at the same table.
Baba Shetty, global chief media officer, DigitasLBi, was pretty charged up: “What's incredibly exciting now is that we’re at a point where we should think about every encounter that a brand has with a person that doesn’t merely represent a lift in purchase intent, but that changes the way that person thinks about the brand in perpetuity."
Now that’s something to think about. Programmatic media, data and predictive analytics, and all the other touchpoints along the purchase journey can be impacted by understanding consumer behavior across devices, in-store, outside the store, online, etc. Clearly, Shetty is a believer in data-driven decision-making.
The Media Kitchen’s Lowenthal thinks all media will be bought programmatically eventually -- and that doesn’t mean low-level, remnant media.
For what it's worth, I believe he’s right, but I also think that custom or bespoke programs will always require face-to-face decision-making and loads of discussion.
Merkle Announces Partnership with Sonobi to Launch Direct Programmatic Platform with Guarantee on Audience Targeting
November 20, 2015 (Merkle) -
The company also announced that CRM agency Merkle and DSP MediaMath will integrate JetStream -- as well as key features within their demand platforms -- to deliver audience guarantees to their respective advertising clients. “The Merkle Sonobi partnership represents a major evolution of marketing.
Through a deep integration of Sonobi's JetStream technology, brands can harness the power of Merkle's comprehensive people-based discovery, planning and buying capabilities to guarantee audience reach at scale and define quality media experiences for their consumers," said John Lee, EVP, Chief Strategy Officer at Merkle, in an email to Real-Time Daily.
Sonobi Launches Direct Programmatic Platform With Guarantee On Audience Targeting
Tobi Elkin, November 19, 2015 (MediaPost) -
Sonobi, an advertising technology developer, on Thursday will launch guaranteed targeting on display campaigns through its JetStream platform.
“In the U.S. only 28% of forecast 2015 total digital advertiser ad spend is expected to be executed using data-enabled media buying,” stated John Donahue, chief product officer at Sonobi.
“This leaves the majority of digital marketing dollars being spent on undefined users, especially across display. Solving this requires technology that empowers sell-side clients to ensure buyers are able to identify and guarantee desired audiences on quality content, as seen across traditional media,” added.
To address these challenges, JetStream will enable buyers and sellers to take advantage of a technology that offers end-to-end media planning and procurement tools. It works by delivering the ability to validate, propose, manage and report across programmatic RTB, private marketplace and guaranteed media ecosystem directly within the JetStream platform.
The company also announced that CRM agency Merkle and DSP MediaMath will integrate JetStream -- as well as key features within their demand platforms -- to deliver audience guarantees to their respective advertising clients. “The Merkle Sonobi partnership represents a major evolution of marketing.
Through a deep integration of Sonobi's JetStream technology, brands can harness the power of Merkle's comprehensive people-based discovery, planning and buying capabilities to guarantee audience reach at scale and define quality media experiences for their consumers," said John Lee, EVP, Chief Strategy Officer at Merkle, in an email to Real-Time Daily.
Sonobi’s Donahue explained to
Real-Time Daily
how JetStream works. The JetStream platform is able to guarantee the buy, for example, if a retailer wants to guarantee that it is engaging with its most loyal customers. “Publishers’ ad servers don’t generally understand audiences," Donahue says.
"When you buy an audience on an upfront basis, you can get 100% of that audience. With programmatic buying, you may only get 10 to 20% of the audience. It’s a scale problem. When you pre-qualify the audience, and buy that audience in a guaranteed, upfront capacity, our technology allows you to understand the quality of each and every impression,” he adds.
Donahue’s reference to “audience guaranteed” buying -- which means that if a brand wants to buy an audience upfront on a single publisher, like The Huffington Post, for example -- that brand is receiving its most valuable customers upfront on HuffPo.
In addition, header-based integrations allow Sonobi to see every consumer, every page view and every marketable impression, according to Donahue. “We can take a buyer’s audience and their first- or third-party data and look at how much of that audience is on all of our premium publishing brands. You can see the audience there, all the impressions and the number of opportunities that are available in a guaranteed upfront capacity.”
The big takeaway here, according to Donahue, is “there’s a separation in the way people buy media today. It’s either bought experientially ('I want my ads on that particular site’) or it’s bought on a spot basis.” Sonobi offers buying on an upfront capacity in order to build the specific audience(s) that brands want. The hope is that more branding dollars will flow into the programmatic landscape with upfront buys.
“If you could take the upfront experience, combine it with the spot, data-driven market where you’re getting the audience you want in real time, and you combine those two worlds, then you get the audiences you want and the experiences you’re looking to create,” he explained.
For DataXu, Fraud Is Top Of Mind When Vetting Inventory Partners
Liz Rowley, Friday, July 31st, 2015 (AdExchanger) -
Ad tech partnerships are fast and frequent, as vendors move to establish a presence in disciplines where they were formerly lacking, or to bolster their inventory pool.
Certainly, these integrations are easier with the emergence of standards like openRTB, but there’s still more to it.
“Now that everyone can support openRTB, you have to do a better job of vetting,” said DataXu Chief Revenue Officer Ed Montes. “The new question is: ‘Will the supply fit into my strategy?’”
In recent months, DataXu has signed a number of inventory sources to its DSP (DX platform), including Centro Brand Exchange, iBillBoard LiveIntent, WideOrbit and Sonobi.
“We’re not interested in integrating with a hundred different partners that are providing undifferentiated products or services,” said Montes. “We are looking for market leaders.”
Step one, he said, is a vetting process to ensure quality sourcing.
“While I want to satisfy clients and connect to anyone and everyone, it may not be the best decision for our business strategy,” Montes said. “Fraud throws things into question.”
DataXu started its fraud-free guarantee program on January 1. The company offers a 97% antifraud guarantee, which allows a 3% room for error. DataXu uses proprietary software on top of DoubleVerify’s detection tech to defend itself against fraud. DataXu clients can also opt to tack on third-party fraud detection solutions.
“We know that we won’t be 100% clean,” said Montes. “The challenge of administering it is that once you put skin in the game, RFPs are at stake,” he explained.
If fraud exceeds 3%, DataXu rebates its clients. “We have rebated our clients just about every month since the fraud guarantee has been in place,” Montes said. “Luckily, the amount has been very minimal.”
According to COO Justin Kennedy, Sonobi was drawn to internal initiatives at DataXu to attack fraud issues within programmatic. Sonobi offers buy-side and sell-side functionality around header integrations, and its technology acts as a traffic cop prior to the ad server, allowing publishers to dictate which ads go to which site visitors.
In addition to offering deal ID and antifraud guarantees, Kennedy said DataXu demonstrated a shared strategic vision about the future of online advertising.
“We fit together with DataXu very well in terms of wanting to rise above what the standard is for programmatic,” Kennedy said.
“Programmatic media doesn’t have to be restricted to remnant inventory and all the negative connotations that come with it,” he added. “It was that way because of the limitations of technology. But new programmatic tech has allowed the wall between direct sales and programmatic to be broken down.”
Programmatic’s on the rise, but buyers will define "premium" in the future
This article was written by Michael Connolly, CEO and founder of Sonobi.
It’s safe to say that programmatic is here to stay.
Advertisers have not only validated that buying media powered by impression-level decision logic against a defined set of objectives is the right model – they are looking to increase the percentage of media they buy this way. More, they seek to migrate budgets traditionally managed through direct premium channels to premium programmatic channels.
Publishers have been quick to understand and embrace this shift in buying models, and are anxious to increase the volume of premium inventory they can sell programmatically.
But this implies an important question: what exactly is “premium” programmatic? What qualities must inventory and audiences possess to ensure previously direct premium marketing budgets are funneled through programmatic channels instead?
This is what we set out to understand in our recent State of the Industry research with Digiday, and the answer is surprisingly subjective.
For most advertisers, the first driver of programmatic adoption is audience, and the second is site. When a buyer is able to access their audience directly on a highly desirable media brand, they will invest and pay a premium.
But from there, the research makes it clear that different marketers have different expectations of what defines premium inventory. So what my client considers premium may be very different than what your client considers premium.
The challenge for publishers becomes straightforward: they need technology to isolate the buyer’s audiences against inventory. Then they need to understand what constitutes a “premium” by the standards of each brand they work with, making their inventory available according to these highly specific needs.
Publishers able to meaningfully address multiple definitions of “premium” and integrate their selling efforts accordingly will accelerate revenue growth in the coming year.
Today’s media buyers are savvy. They have a clear idea of what they want. Publishers simply need to listen and provide flexible tools to help them plan, negotiate, and buy premium inventory programmatically based on the criteria buyers value most.
As we see it, there are two core capabilities publishers must master to maximize the high-value inventory they can sell programmatically:
Forecast the audience
Publishers must understand the specific audiences their buyers want to reach. They must size these audiences, and forecast impressions against them that will meet each marketer’s quality and placement criteria.
Guarantee the opportunity
Beyond this, publishers must leverage technology to deliver those audiences.They must prioritize access, and thus be able to issue delivery guarantees to marketers – whether through upfront or spot buying channels.
According to the research we conducted, programmatic revenue is set to exceed direct sales revenue for premium publishers.To profit from this shift, sellers must do what they’ve always done: understand their buyer’s needs and deliver against them.
Technology will help manage what constitutes “premium,” even as it varies from buyer to buyer. But this shift should be exciting, not scary. It will benefit all parties, and the expertise and tools required to manage it exist. This is our mission at Sonobi.
The future belongs to those who embrace this shift; we are there to help those buyers and sellers move forward.
Industry Execs On Ad Servers And The Value Of Proprietary Tech
Liz Rowley, November 26th, 2014 (AdExchanger) -
“It is the central hub for all digital placements, and provides advanced reporting on things like reach & frequency, multi-touch attribution, geo-targeting, time to conversion analyses, and overall media effectiveness,” IPG Mediabrands’ Mitchell Weinstein told AdExchanger.
But how important is it for companies to own their own ad server rather than leasing one? AdExchanger asked a handful of industry vets to weigh in.
Click below to read their responses.
Nick Jordan, SVP of Product, Tapad
Ben Kneen, Director of Client Success, Yieldex
Natalie Mazer, VP of Strategy and Development, AudienceScience
Kunal Gupta, CEO, Polar
Michael Connolly, CEO, Sonobi
Nick Jordan, SVP of Product, Tapad
"The term ‘ad server’ is used loosely, but in its most literal form, it is the last mechanism engaged prior to an ad being served in a browser. Currently, this is what DFA and Atlas do – not an area that Tapad is investing in today.… In terms of the importance of owning our own ad-serving technology versus buying or partnering, it ultimately comes down to the primary value that the customer needs. Looking at an ad server as a piece of technology that just serves a creative asset, that's not something a company like Tapad would need to build in-house. For us, proprietary [built in-house] technology is focused on developing a richer form of analytics so that it has a native integration with the rest of our technology stack. This is the value-add for customers."
Ben Kneen, Director of Client Success, Yieldex
“It's hard for me to see a world where the ad-serving function isn't a critical component of a digital ad business, if for no other reason than it handles the non-sexy task of targeting and counting toward a billable goal.… I'm not sure I'd be in a hurry to build or own my own ad server unless I had needed some very unique and specific functionality (like connecting into a secure service like a payment system, basing ad selection on some complex search-query parameters, or writing a lot of data to an ad-server cookie) as well as a deep bench of technology folks. I think a lot of publishers who have gone down this road before really haven't been honest with themselves on either the former or the latter. People fool themselves into thinking that building an ad server isn't a big deal, and it's true that the core features of an ad server, like counting and targeting, aren't all that difficult to build. What they overlook is the infrastructure and performance piece, not to mention what it takes to keep your feature set current. That's the real nightmare, and what makes it so difficult to own your own ad server and do it well given the competition. I think you see a lot of publishers walking away from that strategy. Even the guys who were on Dart Enterprise and held on to the very end would rather get on a hosted solution than take it in-house despite the loss of some features.
Natalie Mazer, VP of Strategy and Development, AudienceScience
“In addition to full control in terms of which ads are being served, the ad server also grants full control over ad rotation and sequencing for optimization. Having an ad server as part of the tech stack also allows us to build further capability on top of it. This is important for growing concerns such as fraud protection and viewability, particularly in the video space, where viewability measurement is not available from a third party. It is important [for us to own our] ad server because it provides our clients with full control and transparency into ad delivery and optimization. The other important element is data security. Owning our own ad server provides advertisers with the knowledge that data from advertiser X is not being used by advertiser Y. That kind of unauthorized data sharing is common with traditional third-party ad servers.”
Kunal Gupta, CEO, Polar
“Ad servers are critical to help publishers manage inventory, forecast revenue and generally manage their overall monetization setup. Critical to an ad server is giving the ability for a publisher to understand all types of monetization. I recently met with a comScore Top 50 publisher who shared with me that they have four different ad servers, including one for desktop display ads, another for video ads, another for mobile and a separate solution they are building internally for custom ad formats. An ad server is like a wireless network. You expect top-notch service, high reliability, and all the capabilities that will help you do your day-to-day job. However, value creation is done on top of the infrastructure, not the infrastructure itself. It is not important to own your ad server; what’s more important is creating compelling solutions that solve real market problems."
Michael Connolly, CEO, Sonobi
“The ad server is absolutely essential to the publisher’s technology stack… [but] unless you are one of the major publishers, [owning an ad server] is not advised. The ad server is becoming more streamlined in its ability to integrate with other technologies. Many of these integrations are becoming standardized. Maintaining your own server outside this ecosystem makes it difficult to benefit from standardization in the market. In addition to this, owning your own ad server requires an extraordinary amount of resources. You would need a really compelling business case to make the commitment to operate a 24/7 ad-serving infrastructure.”
The walled gardens around publishers’ premium inventory are hard to take down, since publishers are reluctant to put premium inventory in channels associated with low-priced, performance-focused inventory.
But Sonobi, whose platform combines direct-sold impressions with those sold programmatically, is trying to chip away at those walls.
The company hosted a Premium Programmatic Summit with its partner MediaMath and its client Hearst on Tuesday.
“I think one of the fears publishers have is [that] the way display moved to programmatic was a disaster and a poor case study,” said LUMA Partners founder and CEO Terence Kawaja. “As we move to premium inventory and ad formats like video, native, TV – that’s where publishers are making their money, and they don’t want to mess up the ecosystem like we did with display.”
Sonobi believes that if publishers let all their inventory compete – both programmatic and premium – programmatic impressions may outbid direct-sold ones. The way many publishers have waterfalls set up now, a $7 direct-sold CPM will win against a $10 CPM received programmatically. But if the bids and direct-sold inventory arrive at the same time, the highest price wins. This benefits both publishers and advertisers: When advertisers know a publisher exposes all of its inventory, they feel better assured of campaign delivery.
For some publishers, bringing programmatic into premium environments made perfect sense. “The reason we have made all our inventory available programmatically is that if an advertiser is willing to buy at a rate that will compete or beat, there is no reason we shouldn’t take that,” said William Murray, VP of sales planning and strategy at Scripps.
Other publishers struggle to get higher CPMs in programmatic.
Gretchen Grant, president of home-improvement site BobVila.com, bemoaned the difference in CPMs between direct sold and programmatic. Telling the story of the site to advertisers, or selling on context, gets the site its premium CPMs. Audience-targeted impressions net the site fractions of its brand buys, not its audience.
Agencies acknowledged being part of this problem. “Business Insider has the same audience as The Wall Street Journal for 10% to 20% the price,” said Adam Heimlich, SVP of programmatic at Horizon. “The price is being degraded, but it’s such a better deal.”
However, proponents of programmatic say it makes the buying process easier, and the ability to inform buys with data drives value.
MediaMath CCO Mike Lamb lamented “the number of man-hours wasted on deals that deliver $100.”
Premium programmatic deals help reduce delivery problems, but they also cost more. “We’ve had to pay a huge premium to vault over that reserved inventory,” Lamb said of the agency’s foray into programmatic direct using Sonobi.
In its tests with the platform, MediaMath had to set up separate budgets from the open exchange. Because CPMs were three to four times higher in the premium programmatic environments, the learning engines would rarely choose a high-priced impression in a field with so much lower-priced inventory.
But the results encouraged Lamb. CPCs were roughly the same compared to open exchanges, but CPAs halved. “The buyers for whom these work the best are those that have deep business outcomes they want to drive, like multichannel retailers, [consumer packaged goods], financial services and auto,” Lamb said.
That’s in part because these deals generally bring in first-party publisher data, enabling more precise audience targeting. Those deals also tend to deliver in full. Sonobi’s platform overlays first-party data against site traffic, enabling precise forecasting of how many impressions can be delivered against high-value segments. That combination of data, scale and premium checks boxes for performance and brand advertisers alike.
Sonobi Unveils 'Reactive Segmenting,' Enables Demand-Side To Deal Direct With Supply-Side
Joe Mandese, September 30, 2014 (MediaPost) -
Call it the death of the middleman. The next big push in programmatic media-buying is going to be about streamlining processes, stripping out intermediaries and creating as much direct access between brands and the audiences they are trying to reach through what has become an increasingly complex ad technology ecosystem.
The latest players in the push to centralize, simplify and make the process of programmatic audience exchanges more direct, are two important developments from both the demand and the supply sides. This morning Havas unveiled what it dubbed the first “meta DSP” in an attempt to reduce the litany of supply-side players (see related story) and Sonobi is doing the same.
Sonobi, which most players in the programmatic industry would call an SSP, or a supply-side platform, builds technology to help publishers create more “liquidity” by facilitating more demand for the inventory they sell through exchanges or via direct private exchanges with advertisers and agencies. To help premium publishers attract even more advertiser dollars, it is now launching a product to help the demand-side patch directly into premium publishers, bypassing many of the intermediaries that complicate the programmatic marketplace, and typically erode publishers’ margins in the process.
According to analyses by ad technology investment banking specialist Luma Partners, fees and commissions taken by some of those intermediaries can eat up as much as 60% of the money between an advertiser making a bid and a publisher accepting it.
“It’s true,” says Chris Karl, Chief Sales Officer and head of market development at Sonobi, adding that it is that kind of margin erosion that turns a lot of premium publishers off from using programmatic audience exchanges.
The new system, which Sonobi calls “Reactive Segmenting,” enables advertisers, agencies or trading desks to deal directly with premium publishers, but utilizes Sonobi’s automation technology to do it. Hearst Corp., Reader’s Digest, Cafe Mom and Intermarkets are among the publishers that have already begun using it.
In some ways, the system is similar to the ones being developed internally at big agency holding companies, most notably, GroupM, which has declared it will pull out of open, auction-based exchanges altogether by year-end, and will rely exclusively on using programmatic technology to power private exchanges with premium publishers.
Like GroupM’s approach, Sonobi’s new Reactive Segmenting system utilizes so-called “deal ID” tags that enable an advertiser or an agency to negotiate the terms of a deal (audience being targeted and the price being paid) upfront. When the audience becomes available to the publisher, the tags simply allocate those impressions to the advertiser based on the pre-negotiated terms of the deal.
Essentially, this approach enables the direct sales organizations of a publisher to work directly with their clients on the buy-side, but uses automation to facilitate it.
What makes it work, says Sonobi’s Karl, is the ability to exchange the advertiser’s data to identify and carve out the specific audiences the advertiser is looking to reach before those audience impressions are sold in other markets -- either directly by the publishers’ sales teams, or in other programmatic markets, including open ones.
(Photo: Courtesy of FLBlogCon)
Left to right: Crystal Duncan - IZEA, Brandon Yates - AffiliateManager.com, Matthew Papa - Sonobi
Matthew Papa, our Director of Publisher Development, visited Full Sail University this weekend to speak on a panel at FLBlogCon. The event covered topics spanning content, development, and social media. Matt’s panel helped explain how to get started with monetizing your blog.
(Photo: Courtesy of BWG Strategy)
Left to right: Chris Karl - Sonobi, Robert Brett - Viacom, Charlie Weiss - News Corp, Eric Silverstein - Reader's Digest, and Michael Persaud - Wenner Media
Chris Karl, Sonobi's CSO, attended BWG Strategy's Programmatic Revolution conference on July 9th in New York. He is shown here leading a panel that discussed the topic "Premium Programmatic - The Evolution of Sales in a Programmatic Era".
The panel focused on how, as programmatic media buying becomes a strategic focus for advertising holding companies, organizations have no choice but to embrace the programmatic revenue opportunity. As a part of the transformation, first party data has become the new currency of advertising. One of the challenges of this change arises from the fact that the Publisher's Ad Server was built to serve to pages, not users. Direct sales are still important - in the near future of the Programmatic Era, salespeople will be selling "access" instead of packages.
Is RTB Becoming Programmatic's 'Scatter' Marketplace?
NEW YORK, July 16, 2014 (MediaPost) -
Let me be upfront about this: When it comes to covering the advertising marketplace, I have some personal biases, and they come mainly from covering the upfront. I try not to let them influence the way I cover news about the marketplace, but I definitely try to use every editorial opportunity I can -- especially blog-like commentaries like this one -- when I can. So today’s RTBlog is about some analogies people have been making between the way Madison Avenue buys network TV, and the way it buys digital media, especially programmatically.
Let’s put aside how programmatic media-buying may or may not impact TV’s upfront someday. And let’s just focus on the brief history of digital programmatic trading and in what ways it is like, or unlike, the television advertising marketplace.
First let’s start with how agencies and trading desks buy programmatic, upfront. They do, you know. They have all sorts of terms for it. They call it “premium programmatic,” or “automated premium,” or “programmatic guaranteed,” or any number of other things, but it’s all basically the same thing, using automated processes and the infrastructure of the RTB marketplace to facilitate deals that enable agencies and trading desks to scrape off the premium parts of a publisher’s audience before they reach the open marketplace. This digital upfront may operate in a time frame of nanoseconds, but from a functional point-of-view, it is no different than the network TV upfront that can take place for weeks or months.
The ony differences are that machines, not people, are haggling and allocating the inventory, and that it happens at a speed that no human could haggle at. Otherwise, the function is exactly the same: Agencies and/or trading desks negotiated the best terms and conditions, including guarantees of price, audience composition and delivery based on a first-look opportunity to buy the most premium audience inventory.
That’s exactly what GroupM is effectively doing when Chief Digital Investment Officer Ari Bluman says it is shifting all its programmatic deals from open exchanges to private exchanges. For all the other legitimate reasons he cites -- viewability, fraud, algorithmic bidding engines, etc. -- the play fundamentally is about leveraging GroupM’s sizable budgets to "pre-negotiate" favorable terms (ie. price) to buy the most valuable parts of publishers’ inventory before it reaches the open marketplace.
GroupM is not alone. Other big agencies and trading desks are racing to lock up similar “first-look” and private exchange deals that give their clients preferred access and pricing. And the best part from the agencies’ POV is that it reinforces the best parts of the value they’ve always brought to the media marketplace, especially the ability to use superior insights about the value of media audiences and to leverage the clout of their clients’ media budgets to lock them up. They use people and data in the front-end to negotiate those terms. Then they use machines and data in the back-end to process them. It is the ultimate blend of the industry’s Mad Men and Math Men (and/or women).
Here’s why they will fail.
“No single buyer represents more than 5% of the demand in the marketplace,” explains Chris Karl, CMO at Sonobi.
Unlike the TV upfront advertising marketplace, where a handful of big agencies represent most of the demand, Karl says none of Madison Avenue’s biggest players -- not even GroupM -- represent enough of a critical mass of demand for most online publishers that they can constrain the market that way.
“Maybe they have 7%,” Karl says of GroupM’s digital market clout, but even if you add up all the buying power of the six of seven agency holding companies, you still come out with something that is significantly less than half the total demand for digital advertising inventory.
Does that remind you of another marketplace? You know, search? Well, in a lot of ways the programmatic marketplace is a lot like search. In fact, from what OpenX Foudner Jason Fairchild recently told me, it actually grew out of search, which was a 100% programmatically traded, auction-based, supply-and-demand marketplace. And you know, it has worked pretty well for brands of all sizes, and it continues to grow.
Of course, search is part of “digital,” even if a lot of people in the business don’t think of it that way. But whether we’re talking about online display, mobile, or social, Madison Avenue just doesn’t dominate the supply chain the way it does in television. Part of the reason is the supply chain in digital is so much bigger, and growing every day. And there just aren’t enough collective dollars on Madison Avenue to dominate it.
So the only way to create the same sense of an allocation market that exists in TV’s upfront, is to artificially constrain the digital marketplace. And the only way to do that, is to create some artificial buckets defining one part of the universe as being special, more valuable, precious, higher-in-demand and more sought-after than the rest -- you know, “premium.”
It’s a funny word, because it means so many different things to different people. And from what I can tell, it means completely different things to people on the supply-side and the demand-side, at least until Madison Avenue started retrofitting the programmatic marketplace to look more like TV’s. I have written about this in the past, and will do so again in the future, but the main difference in the way the two sides use the term premium in the digital marketplace, is that suppliers look at it as the highest price paid to reach their audience, while the demand side looks at it as the most valuable audience they can acquire, regardless of the price they pay, or the method they use to acquire it -- direct, private exchanges, or open exchanges. The main difference for them, is the price they end up paying to acquire them.
That’s the main reason I believe so many big marketers are taking programmatic in-house, because they believe their is no difference in how you procure the audience, so long as you reach the right audience possible, at the most efficient price possible. And some people believe the best place to do that is in an open, auction-based marketplace where the supply still outstrips the demand.
In the meantime, big agencies like GroupM will continue to create as much value for their clients -- and themselves -- as they can by leveraging things they do best in closed marketplaces, if for no better reason than they can actually manage that.
Some people have likened GroupM’s play to the notion that they are creating their own ad network, or ad networks for individual clients or groups. But I like Sonobi’s Karl’s analogy that they’re really just trying to replicate an upfront mindset by locking up first-look opportunities, negotiating preferred rates and guarantees, and then letting their machines scrape off the audience to create their own version of a premium marketplace.
The flip side, says Karl, is that everything the big holding companies don’t dominate in private exchanges go into what is effectively programmatic’s scatter marketplace. And unlike TV, that represents the majority of digital inventory. In other words, programamtic’s scatter market is less like TV’s and more like search’s. And that means it is far too diffuse for any single entity, or group of entities, to dominate.
'Inflection Point' Calls For Publisher Mobilization
NEW YORK, July 9, 2014 (MediaPost) - No, not “mobile-ization,” but that’s part of it.
Chris Karl, chief strategy officer and head of market development at Sonobi, a supply-side platform (SSP), on Wednesday wrote an email to the premium publisher community, titled “A Call To Arms for Publishers.”
Karl notes that he and Sonobi see an “inflection point” in the market, and insinuates it was uncovered by GroupM’s decision to pull all of its money from the open ad exchanges in favor of direct, private deals. Sonobi believes this news is positive for publishers, as is IPG’s desire to spend the majority of its money via programmatic. “Soon you will hear about these efforts from Publicis, Omnicom, Aegis, and every other sizable media agency,” Karl predicts.
In essence, Karl believes the future of digital advertising is in “programmatic direct” -- a blend of traditional (direct between buyer and seller) and new (automation and real-time optimization using data) ad trading methods.
Since demand will -- and already is -- call for some sort of direct relationship with buyers, publishes would be wise to have the infrastructure in place to support the demand before it gets out of hand. That’s the gist of Karl’s “Call To Arms.”
The “inflection point” Karl references is no mirage. TubeMogul, a programmatic ad platform, recently reported that there were nearly 200% more private marketplace deals that took place in Q1 2014 compared to Q4 2013. Similarly, CPXi recently noted that there were 250% more impressions served on its private programmatic marketplace in March 2014 compared to October 2013.
That’s not to say open ad exchanges will evaporate, but buyers are weary of wasting dollars. When it comes to ad quality on the open exchanges, progress has been slow.
The other factor at play is not just where advertisers want to spend money, but who the advertisers are. When Advertising Age noted that Procter & Gamble wants to spend 70% to 75% of its U.S. digital media budget via programmatic, the conversations about programmatic changed. Ben Plomion, VP of marketing at Chango, recently told Real-Time Daily that Chango has had more marketers ask about branding via programmatic ever since the P&G news.
“We’re still in the first inning,” is a favorite cliché of the programmatic ad industry. Perhaps we are entering the second.
NEW YORK, March 13, 2014 (Ad Exchanger) - The term “programmatic” is contentious even among its faithful adherents. Not only does it inadequately describe a range of ad-buying activities, it also implies that everything is done automatically, as if robots are replacing a human sales staff.
But a panel during the Premium Programmatic 360 summit (presented by Sonobi and MediaMath) held Wednesday in New York City emphasized that the most effective programmatic implementations are inherently cybernetic: part human, part machine.
“The human element will always be fundamental,” said Rick Greenberg, CEO of Kepler Group, a digital agency that spun off from MediaMath. The machine elements of programmatic enable scalability of real-time buying activities. “You still have machines making decisions in the moment,” Greenberg said. “But humans can inform that decisioning.”
Added Chip Schenck, VP of programmatic sales and strategy at publisher Meredith Corporation: “There’s a place for human decisioning and machine decisioning – but it’s all tech-enabled.”
Advertisers, agencies and vendors seeking to push programmatic principles into an ad sales unit have the unenviable task of communicating those benefits to individuals who aren’t always interested in hearing about it.
“[Programmatic] is definitely perceived as a threat,” said Rob Bymes, SVP of pricing and planning at media holding firm Gannett Company. One hurdle is channel conflict: Sales staff see programmatic as competition for client dollars. This is the wrong tack to take, Bymes said.
“I see programmatic transitioning from a sales channel to a sales tool,” he explained. “It’s about education. Getting your sales team on board to understand that programmatic isn’t the enemy. It’s a better way of delivering to your audience.”
Specifically, this entails adding relevancy to media buys.
“The homepage takeovers and the whiz-bang units will be there, but programmatic will come into the conversation as a sales tool,” Bymes said.
So how to broach that conversation? Ray Reid, North America head of programmatic at Neo@Ogilvy, avoids drawing attention to the machinery that powers programmatic. Instead, he focuses on the material benefits programmatic brings.
“We try not to talk about the technology or the platform,” he said. “We try to talk about the benefits this ecosystem brings to the table. It’s a tremendously complex ecosystem, so clients don’t have the time or the desire to get to that level of detail. We talk about the capabilities the tech enables in terms of [clients] achieving their brand objectives.”
It’s a strategy that appeals to senior marketers, Reid said. Starting by extolling the technology or describing the tech ecosystem will cause a massive tune-out. Only after the top-level marketers buy in and you can engage with employees who are actively overseeing the digital campaigns should the conversation turn technical.
These conversations are important to continue as programmatic matures. In recent years, programmatic has moved from its strict confines as an RTB remnant play to the point where it’s beginning to touch more valuable, “premium” inventory and even the branding campaigns that constitute the bulk of online advertising spend.
“[As brands] start to see how we can progress people through the funnel, it becomes very powerful and interesting to them,” Greenberg said. “What will tip the scales for certain brand advertisers is the availability of more high-impact units.”
Admittedly he said, some brands like CPGs, who sell through intermediaries like retail outlets, won’t approach programmatic the same way as brands that sell directly to consumers. But in an omnichannel world, even CPGs can reap the benefits of programmatic.
“We look at programmatic as an efficient means to access another touchpoint in front of the consumer,” Reid said. “How many touches will somebody need to see before they convert? If we can find a way to increase the frequency of impressions in front of that right audience, programmatic enables us to do that … as it pertains to the overall [campaign] and not just the conversion online.
"You might not sell soap online, but you’ll want to deliver an impression in front of an audience. That might be one touch. A billboard will be another touch. The fact that we can talk about one metric will bring more brand managers into programmatic.”
Sonobi to Sponsor Premium Programmatic Event in NYC Next Week
NEW YORK, March 5, 2014 (ADOTAS) – On Wednesday, March 12, industry leaders including publishers, agencies, trading desks, and advertisers will with come together for Premium Programmatic 360 (PP360NYC), the first summit dedicated to accelerating the premium programmatic marketplace. A half-day event, PP360NYC will take place at the Tribeca Grand Hotel in New York City.
To learn more and register for the event, visit: www.pp360nyc.com.
The event, which is sponsored by Sonobi, is designed to bring all the constituents to the table to discuss the challenges and opportunities surrounding premium programmatic. Through keynotes and a roundtable discussion, it aims to spur the expansion of programmatic access to premium supply, help drive more premium brand spend and scale existing performance campaigns.
Terry Kawaja (pictured), CEO of Luma Partners, will present a keynote at PP360NYC. “Programmatic is the hottest trend in digital advertising today though its impact has largely been felt in the remnant inventory category. The exciting aspect of this trend is where software automation meets the premium segment,” says Kawaja. “This undoubtedly will have a major impact on brand advertising in digital and, in fact, all addressable channels.”
Following his presentation, there will be a presentation from the IAB and an interactive roundtable discussion which will include publishers such as Gannett and Meredith, agencies and trading desks including Ogilvy, Xaxis, and Kepler Group.
“The ability to access premium inventory from hundreds of top pubs has fundamentally changed how we run campaigns and how our clients’ strike the right branded dialogue with consumers,” says Rick Greenberg, CEO of Kepler Group. “Premium Programmatic is a key component of true dialogue marketing and we aggressively adopt every tool that accelerates our ability to secure 100% of media – from standard IAB units to expandables and page takeovers – on a truly programmatic basis. The day is fast approaching where every impression will be bought this way.”
“Programmatic buying represents a seismic upheaval of the digital buying process for which the implications for agencies, publishers, and brands is only beginning to be understood,” says Raymond Reid, Managing Director, Neo@Ogilvy. “As all media increasingly becomes digital, the influence of programmatic buying will extend beyond digital to all media platforms which will challenge existing models as well as create new opportunities to reach and engage consumers.”
“It is going to take all components of the industry to get behind this movement towards premium programmatic,” said Michael Connolly (pictured), CEO and Founder, Sonobi. “We have to change the “race to the bottom” mindset that currently describes the current RTB marketplace. This conference is the first real effort on both the supply and demand side to move this market forward.”
This piece was written by Chris Karl, CSO Head of Market Development, Sonobi
Over the last couple of decades, technology has had a massive impact on consumer behavior and media consumption but, until recently, had almost no impact on how advertising is purchased and sold. Somewhere along the line, media fragmentation outpaced the ad industry.
The typical ad agency’s media planning and buying processes were designed in a time where we had five TV networks and a couple of dozen print magazines. It didn’t translate well to the consumer Internet where fragmentation created headaches and extra work for media buyers. As digital media budgets grew, so did the number of rows on the spreadsheets used for building media plans and the number of bodies required to manage them. The goal was to achieve audience scale for the advertiser, but in doing so many agencies nearly crippled themselves with the cost of human resources.
About 10 years ago, the ad network model allowed publishers to monetize unsold inventory, making it easier for buyers to build to scale. This helped a little, but it was still a solution void of tech innovation. We also saw ad tech vendors pop up everywhere. They offered something different but still relied on field sales teams to drive revenue, feeding off the buyer’s insatiable appetite for the next new thing. These were manual workflow solutions responding to the market’s need for more effective audience buying. We were still missing out on the promise of technology.
It wasn’t until the advent of the ad exchange in 2007 that we finally tackled the workflow problem in digital media. The exchanges introduced automation. Automatic media access gave birth to programmatic media and the seeds of an ad technology renaissance were laid. This technology evolution began on the remnant side of the marketplace, a natural place for technology to flourish and be refined over time.
Over the last seven years, the exchange gave birth to a parade of acronyms that confused everyone and drove massive innovation on both sides of the market, buy and sell. Hundreds if not thousands of companies now play in the programmatic sandbox, reshaping the advertising industry from the inside out.
So what’s the path ahead of us? This year is all about premium programmatic. The premium side marketplace is undergoing a metamorphosis as buyers attempt to augment open market reach with private marketplaces. A private marketplace is a manual solution for a marketplace that requires efficiency; a natural step in the evolution of audience buying but a solution that looks a lot like the ad network model.
Programmatic buyers have been clamoring for access to premium supply, but we have not
designed a workflow that automates this process in a seamless fashion. There are solutions
coming. Once this sector of our marketplace is enabled we have completed the workflow
around buying and selling both remnant and premium inventory types. The matrix above
depicts this evolution of audience buying and will also reflect the path that will be taken for
other media formats (Mobile, Video, IPTV) as automation reaches all media channels.
Ad tech’s impact on the evolution of audience buying is undeniable and impossible to stop: It
is a force of nature. It will take many companies to develop the solutions that will reshape the
media industry. Technology is creating massive upheaval and massive financial opportunity for those that lead the way.
Press Release: Sonobi and MediaMath Join Forces to Enable Premium Programmatic Media Buying
NEW YORK, NY--(Marketwired - Feb 19, 2014) - Sonobi today announced its strategic partnership with MediaMath to provide advertisers direct, programmatic access to a new class of certified premium inventory.
By integrating Sonobi's certified premium inventory into MediaMath's TerminalOne Marketing Operating System™, advertisers will benefit from an immediate increase in reach and frequency against their high-value target segments, along with the intelligence and workflow efficiencies of automated media transactions. By providing access to this class of supply through a channel never before available, publishers, too, will be able to be more efficient in fulfilling display campaigns, while gaining a better understanding of their audiences.
"We have accomplished the rare win-win for the buyer and seller with this launch. It increases scale and quality of programmatic supply for buyers, while bolstering revenue yield for the seller," said Chris Karl, CSO, Head of Market Development, Sonobi.
Sonobi qualifies certified premium inventory based on the following criteria:
Comscore Top 200 publisher
First look access after sponsorship priority
Guaranteed availability of such premium inventory
Complete transparency
"We believe there is significant value compression across RTB spend," said Michael Connolly, CEO and Founder, Sonobi. "When a publisher is able to identify and isolate high-value users in a premium auction, it increases organic demand that does not exist in the RTB market today."
"Programmatic has offered unmatched scale and performance for digital marketers, and the expansion to premium channels only makes it more enticing, especially to big brand advertisers who have otherwise been hesitant to make the leap," said Greg Williams, Co-Founder, SVP OPEN Partnerships, MediaMath. "Our partnership with Sonobi and the ability to connect advertisers to premium publishers in a more efficient manner is indicative of the future of programmatic."
About Sonobi:
Sonobi is an ad technology company that provides online publishers and media companies with technology that optimizes revenue yield across the Programmatic and Direct revenue channels. The company's suite of products represent the advertising technology industry's leading Publisher Operating System. Sonobi serves over 500 publishers across the United States, Canada, and Latin America. From our client facing user interface to our optimization algorithms, our in-house engineering team produces all of our proprietary technology.
About MediaMath:
Based in New York with 12 locations across five continents, MediaMath develops digital marketing technology and offers deep industry expertise, enabling marketers to connect with consumers individually and at scale across the entirety of the world's digital media. MediaMath's TerminalOne Marketing Operating System™ enables marketers to customize their own technology infrastructure and leverage their data and industry data in the planning, execution, optimization and analysis of digital marketing programs, resulting in smarter decisions that grow their business. Powering the operations for thousands of marketers, including those representing 55% of the Fortune 100, TerminalOne enables its users to drive transformative business results across the entire digital ecosystem.
