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The Trade Desk’s Jeff Green: The Consumers Are Forcing Changes

thetradedeskThe Trade Desk made headlines this week when it raked in $45 million in debt financing and brought on Microsoft, RGM Group and Delivery Agent alum Gabe Greenberg to manage its Advanced TV division.

The company positions itself as both a DSP and a DMP, and its leaders have longstanding roots in automation, according to CEO and co-founder Jeff Green.

“We’ve been in programmatic from inception,” Green said, adding the company benefits from never having repositioned its business model.

“We were never an ad network and decided to become a DSP,” Green said. “Instead, we’ve always focused on being the very best buy-side platform. We think a buyers’ platform has to have both a DSP and a DMP. And our vision is to be across all channels.”

Green spoke to AdExchanger.

ADEXCHANGER: What drove The Trade Desk’s debt financing round?

JEFF GREEN: One element that drove this financing is the need to make sure that receivables are not a problem. Sometimes the big brands and agencies take longer to pay, so having debt to make sure we don’t have any working capital problems is fantastic. The other piece of this round of debt financing is about taking some cash and putting it on our balance sheet so we have some pretty massive additional cash reserves. We raised $20 million in the beginning of the year, and we still have almost all of that capital as well.

Important to note is that we’re profitable. You could contrast our company to one like Rocket Fuel, who spends something like $18 million or $20 million a quarter. In other words, they’re burning through nearly $100 million a year, while we’re profitable. All that debt it just to create additional room for us to grow, but it’s mostly about padding our balance sheet so we can do so with even more aggressiveness than in the past. (more…)

Publishers Must Put A Price Tag On Attention

tonycassonupdated"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Tony Casson, senior director of ad tech products at sovrn.

When I stopped at a local store the other day, there was a sign on the door that read, “Back in five minutes.” With my phone in the car 30 yards away in the rain, I assured myself that I could survive five minutes without it. I looked around, first at the cars in the lot then at the door, studying the patterns and the color of the paint. If some enterprising sort could have slapped an ad on that door, they would have had my full attention.

Thinking about attention leads to some fascinating revelations. Thirty years ago, our attention was largely focused on the physical world. Attention to media was very specific to time and place, such as the radio in the car or the television program in the living room. It was a scarce resource, so advertisers paid premiums to be there as frequently as possible when that attention was available. Then, as now, context and audience mattered most for advertising dollars.

Today, personalized attention is available to advertisers at almost any waking moment, including at our desks, in our cars, walking down the street or waiting in line. And sitting at the center are publishers, which act as attention exchanges for an Internet ad market worth $140 billion dollars. It’s more important than ever that publishers accurately establish the value of each reader’s attention.


Move Over, Mobile: Here Comes Cross-Device

kamakshiddtData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Kamakshi Sivaramakrishnan, founder and CEO at Drawbridge

For the past five or six years, we’ve been told that it will be the “Year of Mobile.”

Not this year. With companies like Google likely making big moves, 2015 will be the “Year of Cross-Device.”

Mobile growth will still be dominant, but the brands that adopt mobile as a real channel to reach consumers in 2015 will do so because cross-device solutions make mobile attributable. Increasingly, it’s because of cross-device that big brands are beginning to think beyond mobile and across all connected devices, including smartphones, tablets and personal computers, connected TVs and even smartwatches and other wearables.

Since cross-device will be a major topic in 2015, let’s define a few pieces of cross-device jargon. “Attribution” in this case means tying a digital ad impression to an action, such as a purchase or store visit. “Identity” may seem self-explanatory, but this can and should refer to an anonymous identity, too, not just one tied to a consumer’s personal information. “Reach” and “scale” mean the size of an audience.


What Programmatic Advertising Could Learn From Tinder

johnsnyderddtData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by John Snyder, CEO at Grapeshot.

At the risk of sounding arch or flippant, I declare that the programmatic media community should start copying Tinder.

Yes, that Tinder. The online dating community has captured the imagination of lovelorn smartphone users everywhere. People love its simplicity and appreciate how the technology behind it presents potential new romantic partners based on an algorithm of mutual interests gathered primarily from Facebook profiles.

This form of automated discovery has been lacking in programmatic digital advertising. Traders from both buy and sell sides need better deal-discovery mechanisms than currently exist so they can get beyond the limited circle of traders they already know and with whom they already trade.


How Do You Measure The Quality Of Digital Ads?

rancohenupdateddtData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Ran Cohen, vice president of programmatic strategy at Undertone.

As more ad spending follows consumers to digital channels, those channels are being monitored and reviewed more closely than ever. Advertisers recognize not only the opportunity but also the complexity of online advertising. Unlike the traditional TV model, where specific spots are selected, digital advertisers are often unsure of precisely when and where to find their ads. This creates a strong need for measurement and reporting, but what exactly should buyers measure?

The most important thing to monitor is the value of the campaign to the brand. In reality, the value includes the short- and long-term revenue impact. In practice, this type of measurement isn’t easy to come by so proxies are created.

For a long time the leading proxy was the click-through rate (CTR), but marketers increasingly realize that this is a weak proxy for two main reasons. Many studies, for example, show a low, or sometimes negative, correlation between CTR and brand metrics, such as brand recall, brand favorability and purchase intent. Also, various players have learned to game the system with fraudulent clicks.


The Risk-Reward Equation for Publishers

eric-berryData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Eric Berry, co-founder and CEO at TripleLift.

Risk–reward analysis is studied heavily in modern portfolio theory. There are two important questions that pervade this discipline: How can an individual’s portfolio be structured to maximize their return while minimizing risk, and how can it be adjusted for an individual’s risk tolerance?

For web publishers, monetization is a version of modern portfolio theory. Advertising assets and resources can be allocated and maximized in light of the risks associated with various forms of monetization. But unlike savvy investors, publishers don’t always consider the optimal balance of income maximization strategies with their associated risk profiles. It’s a problem that is compounded by the simultaneous pressures of declining CPMs and the shift to mobile.

The New York Times recently garnered positive attention for its sponsored content promoting the Netflix series, “Orange Is the New Black.” It is evident that the Times was well compensated for its efforts while it simultaneously presented a much better user experience than interstitials. But this is analogous to a risky investment that happened to outperform; a dozen other equivalent investments might tank.

It can be tempting to try to replicate the success of the NYT-Netflix ad in a more standardized way. Ad networks and exchanges succeeded in large part because advertisers don’t want thousands of publisher relationships and it’s enormously challenging to produce highly custom content at scale.


Expressed Data: The Future Of Targeting

timmayerupdatedData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Tim Mayer, chief marketing officer at Trueffect.

For years, the display advertising space has targeted users based on inferred data, which is derived from the types of media people consume, rather than who they are and what they do offline. This approach relies on third parties that collect behavioral data across websites by using cookies and tags to determine the sites a user visits and the content he or she consumes.

But third-party cookies are on the decline, largely due to consumer privacy concerns. And with fewer cookies available, it becomes increasingly expensive to use them for retargeting purposes – and it costs even more to prospect for new customers. Fortunately for marketers, new forms of data, including expressed data, are becoming available.

Expressed data is more accurate and powerful than inferred data because it is personal information that the users themselves willingly provide to brands they want to be associated with. The brand can then leverage the data to further its relationship with the consumer.


How Can Advertisers Bypass The Industry’s Walled Gardens?

chrisoharaupdatedddtData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Chris O’Hara, vice president of strategic accounts at Krux.

In this increasingly cross-device world, marketers have been steadily losing the ability to connect with consumers in meaningful ways. Being a marketer has gone from three-martini lunches where you commit to a year’s worth of advertising in November to a constant hunt for new and existing customers along a multifaceted “customer journey” where the message is no longer controlled.

Consumers’ attention migrates from device to device, where they spread their limited attention among multiple applications. It’s become a technology game to try and track them down, and starting to become a big data game to serve them the “right message, at the right place, at the right time.”

Modern ad tech is supposed to be the marketer’s savior, helping him sort out how to migrate budgets from traditional media, such as TV, radio and print, to the addressable channels where people now spend all of their time. Marketers and their agencies need a technology “stack,” but they end up with a hot mess of different solutions, including various DSPs for multiple channels, content marketing software and ad servers.


Will Tools Like Apple Pay Move The Needle On Mobile Commerce?

laurenmoores"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Lauren Moores, vice president of analytics at Dstillery.

With holiday shopping following close on the heels of the fall release of the iPhone 6 with Apple Pay, I expect shopping behavior to shift further toward mobile because of reduced transaction costs.

Already mobile commerce (mcommerce) is expected to account for 19% of US ecommerce retail sales this year, according to eMarketer, totaling $57.79 billion overall. Now we’re all waiting to see whether integration of Apple Pay and other mobile payment options in brand mobile apps or mobile-optimized sites will create momentum, giving retailers that final piece of data that shows the value of mobile in the consumer path-to-purchase journey.

Using the mobile phone to pay for purchases is not new. Is this fingerprint-based NFC iOS-only solution just a shiny alternative to solutions already in play, such as M-Pesa (SMS-based payment), PayPal, Google Wallet or Softcard? How does it fit with existing consumer bank options, One Coin or Plastc? Did it just make the competing MCX CurrentC QR code approach obsolete before it is released?


When ‘Programmatic In-House’ Is Really Not In-House

meganpagliucaupdatedData-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Todays column is by Megan Pagliuca, vice president and general manager for digital media at Merkle Inc.

The marketers that are truly taking digital media in-house are few and far between.

Those that are successful with in-house media tend to be the digitally native marketers for whom digital is already a core competency, such as Groupon or Amazon. These types of marketers have often built their own ad servers, web analytics platforms, demand-side platforms (DSP), preferred-marketing developers (PMD), data-management platforms and attribution methodologies. When Groupon says it does all of its digital media in-house, it means it.

I see a trend of marketers pushing back against a broken agency model and, rightfully, firing their agencies. However, the media-buying services aren’t being taken in-house. Instead, they are being moved directly to buy-side technology platforms.