Growing Direct Response Budgets Driving DSNR Media Group Revenues Says CEO Peles

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DSNR Media GroupTsafrir Peles is CEO of DSNR Media Group, an interactive advertising services provider.

AdExchanger.com: A bit of history. How DMG pivoted in recent years to meet market opportunities?

TP: DSNR Ltd., as a large scale international advertiser, was the first international advertiser on the right media network back in January of 2004, helping Mike Walrath and his team monetize their growing international inventory.

In mid-2007 we decided to spinoff our media department to create DMG – DSNR media group; a results based, international, interactive advertising service provider. We got onto the game field with one big advertiser, trained a team of media professionals, mainly in the fields of media buying, campaign optimization, search and email marketing. We needed to add some sales people and started to roll. DMG was incorporated in October of 2007, surpassed its challenging goals in 2008, doubled its revenue for 2009 and is on its way to double again in 2010.

We have always been capitalizing on remnant inventories, first as a large advertiser, from 2002, and then as a service provider since 2007 and on. As a service provider our focus is on the demand side, serving our advertising clients, aggregating media for them from many different media sources, adding our unique optimization “flavor” that consist of our post click optimization technology, and our holistic approach to campaign value chain optimization.

We have been capitalizing on three main trends in recent years: 1. Growing budgets in results based advertising.  2. Decreasing budgets (08 and 09 economic slowdown) in brand / premium advertising what made more “premium” inventory remnant.  And 3. Overall internet usage continues to grow constantly, in our view, this means more impressions created and need to be monetized.

Additionally, we became pretty good at trading with our competitors, on and off exchange platforms, on a local (in our main markets) and on a global basis and in most cases we buy more than we sell.

Now DMG has 3 lines of business:

  • Results-based online advertising,
  • Results-based mobile advertising, where again, we aggregate a lot of supply on behalf of our advertisers. Here, our post-click optimization platform, traffiliate, serves not only as post click optimizer per se, but also as an aggregation platform that enables conversion tracking in mobile campaigns.
  • Post-click optimization platform – where we license our technology – traffiliate utilizing SaaS model, or as we call it, TaaS – Traffiliate as a Service.

How do you position and differentiate DSNR Media Group today? It would appear to be part ad network and part agency considering the services component.

We are a Demand-side, results-based, interactive (web and mobile) advertising service provider. We aggregate media from 3 different ad exchanges and dozens of ad networks including our own, 8 different mobile ad networks including our own and we optimize and distribute this aggregated media to our advertisers based on mainly performance.

We have a relatively large account management team that runs all this “magic” for our advertisers and that uses a consultative approach to grow the partnership with our clients. We use proprietary technology, to manage those campaigns on multiple platforms and to optimize them.

We have become significant player in our main markets: Germany, France, Italy, Spain and the UK.

On the publisher side, in addition to just buying large volumes, we offer our publishers some unique monetization vehicles in the form of unique ad formats and integration with third party monetization platforms that adds on the media they already have. Our publishers also enjoy a dedicated account management team that is geared towards increasing their ecpm’s as well as their volumes.

So yes, to answer your question, we are a network+,  a service provider but NOT an agency and NOT a DSP.

"Digital" moves quickly, obviously. What has surprised you about the world of digital marketing in the past year?

We have been around close to 10 years now, me personally more than 10, and witnessed the previous bubble blast, so it is hard to surprise us. There is one thing that surprised us, a year and a half ago, where we predicted that remnant inventory cpm will continue to decline, in conjunction with premium inventories cpm’s. We actually noticed an opposite trend in which in the last 18 months we saw a hefty increase of more than 50% in our cpm’s. I must say that this is only what we see in the areas where we trade. In retrospect, I think I can explain this by the conversion of more premium inventory to remnant, and the improved targeting and optimization, there is much smaller “waste”. Also we have grown up a bit, and we now understand that our solution doesn’t fit all advertisers, and that it is perfectly okay to turn down advertisers and publishers that don’t fit our model.

Where does display advertising fit in your strategy? Are you seeing a convergence of search and display which is affecting your business?

We are display! Back in 2008 we ran search and email for our advertisers, but in 2009 we decided to focus on display. We think that partially, this concentration supported our aggressive growth. These days, with the growing convergence, we see ourselves getting back to search but from the perspective of better targeted display. Google’s ADX2 also supports it with the availability of GCN inventory on it and the participation of adwords as a buyer on the exchange.

Our post click platform also supports both search and display campaigns, looking at the search phrase as well as at the creative or ad group as parameters that need to be taken into account when optimizing post click action.

Who is your target client market?

Our clients are direct response advertisers, performance agencies and the performance budgets of brands, mainly focusing on reaching audiences in diversified geographical markets.  With the introduction of TaaS and our mobile advertising network, we have more to offer to this segment, ROI focused advertisers and agencies.

Have ad exchanges become an important source of inventory? How has this evolved for DMG and where do you see it going?

The first ad exchange enabled our spinoff and allowed our growth and basically provided us with an almost ready made media source to start and run our campaigns. Since we are a Demand side service provider, the growing availability of inventories through exchanges is to our benefit. Based on our experience, we believe, that aggregators and optimizers will continue to play a significant role in the media /audience trading and optimization ecosystem.

Is DMG using third-party datasets for ad targeting today? Is it working?

We are always testing different things including these third party data providers. I must say that we still haven’t found anything that provides us with the lift we need in order to really integrate. We are sure that this day will come, and hence we are keeping ourselves open and always running to at least discuss opportunities with these guys.

How many employees does DMG have today? Is it mainly in Israel?  Any thoughts about expanding more globally?

We are now 75 full-time employees, all working from our office in Raanana, Israel. In addition, we do have some free agents working for us in some of our markets and also some dedicated out-sourcing technology development teams in Bulgaria and in Israel.

Needless to say, that our main markets are outside of Israel, and we are always looking at the right timing to open field offices in our target markets. So far our model of not having physical presence in our market has been working nicely, it does require quite a bit of travel and a lot of web and call conferences with clients, publishers and third party service providers.

What are some of the unique benefits to being an ad tech company in Israel as opposed other hubs like Silicon Valley or New York City?

We are an international player, the US market for us is almost the rest of the world. We do business regularly in at least 6 languages, and if you walk into our office you will probably at any given moment hear at least 4 of them spoken. Israel is an immigrant based country, where technology is no stranger, provides us with great talent that nicely accommodates our need for diversified languages and cultures.

Follow Tsafrir Peles (@Peles_dmg), DSNR Media Group (@DMG_interact) and AdExchanger.com (@adexchanger) on Twitter.

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