Growing The Email Display Ad Exchange At LiveIntent

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liveintentLike your run-of-the-mill 728x90 display ad unit, email can be taken for granted. Yet it remains a powerful channel powered by unique engagement for the email consumer and advertiser alike.

LiveIntent EVP of Operations Jerry Sandoval has learned the nuance of email over the years, and in his most recent role at email ad targeting platform LiveIntent, he and his company provide a different take on email marketing.

Sandoval stresses that LiveIntent “doesn’t really send email, its clients do,” and programmatic media momentum has provided a tailwind to his company’s ability to target audience within email ad placements and send more money the way of the publisher – and yes, LiveIntent too.

Last week, AdExchanger discussed LiveIntent and industry trends with Sandoval.

AdExchanger: Why do you think email will remain a critical channel for marketing and advertising?

JERRY SANDOVAL: It's the only open platform for pushing communication, due to the fact it's one of the original internet protocols. People forget about protocols no longer used, like ECP, that were the backbone of the internet at one point. SMTP is also one.

Look at clearance platforms, which are “push,” like Twitter and Facebook. You’re seeing the way that they push and draw users back through email. For example, you may have seen that when you get a tweet, you can get an email; somebody mentions you, you can get an email, depending on your settings. Ironically, that's how they drive engagement – email or SMTP.

How does email get into the programmatic world? Is this a focus for LiveIntent?

Email is in the programmatic world. Our CEO Matt Keiser deserves all the credit for this innovation of bringing real-time ad serving into email. He had been working on it for a long time and finally came up with the secret sauce that made it work.

Email media is different, as any ESP (email service provider) will tell you. While HTML files in browsers are certainly common now, basically we're running the 1990s version of HTML inside email clients. Within email, we don't have iframes or JavaScript or even CSS in all the clients. You have to use a lower common denominator of HTML tech and tables for layout instead of more modern techniques. You can't use any existing ad server either.

Before, you could do targeted only but no yield optimization, meaning you could set a campaign and send it, and everybody who received that message would get that campaign. Now we can have thousands of campaigns, and when the person opens it, depending on all the parameters  of the buy and the targeting, they go into an auction, and the highest value for the publisher or whatever campaign's going to provide the highest yield is what gets displayed. That was never possible before LiveIntent.

At a high level, what’s real-time about LiveIntent’s email product?

Simply, we are doing real-time ads or content within the email on-open, not on-send. If you open the email three days later, the content is fresh.

Can you go through how LiveIntent’s product works from a use case perspective?

There are buyer side use cases and supplier side use cases. Publishers are directly selling their own inventory and then using our product for filling. On the advertiser’s side, they buy our email inventory at-scale using data selects, data overlays and first-party data segments.

Which side is driving more revenue for you all?

The revenue side for us starts with the buyer. That's where the dollars come into the system.  I'll take you all the way through the marketer use case, but it will start from a publisher's perspective.

A large publisher may have hundreds of newsletters, but they want to sell the inventory they were never able to sell before. They place LiveIntent tags into their email templates within their email service providers – generally their CMS.  Now they can log into our interface and set up different types of campaigns if they have a salesforce direct-selling their website inventory. They can start extending their website inventory into their email inventory easily through our system, LFX, and when they send their email it will serve those campaigns.

If they don’t have a campaign available, we may have a campaign available on our exchange, through RTB or through advertisers using our interface directly.

With RTB, does email inventory hit the auction of an exchange as soon as the email client loads the image?

Yes. Once that request from the email client hits our service to download images, we put out that impression to bidders in real-time, collect all of the bids, run an auction, and serve the highest value campaign to that user. If the images aren't, we never see the impression. For the most part, our publishers are “premium” publishers, and their emails have high open rates. They are trusted content.

We see an approximate 10-15% open rate on their newsletters with images enabled.

So you guys are running the auction? That sounds like LiveIntent has its own own exchange. Or are you just leveraging your publisher through DoubleClick’s AdX or something like that?

No. We have the exchange, which is the auction environment. We have the RTB. We even have a bidder that advertisers can use to bid on the inventory. It's all only email inventory.

Who's hooked up to the exchange? Do they need to commit a minimum dollar level to be a part of that exchange?

No minimum. We have demand partners such as Google’s Invite (now called Bid Manager). MediaMath is launching now. DataLogix. We have a lot in the pipeline. We have 12 or 15 partners right now who bid. TapAd, which is more of a mobile play, is there; people open email on mobile devices so we tend to have quite a bit of mobile inventory that mobile bidders find interesting.

Do biddable ad units have to be in a browser? Or can they be in an email client outside of the browser?

Any email client that supports images.

Given this move to programmatic, it's all about scale. How do you overcome that challenge with email where it may be constrained?

We're experiencing high growth and going to do around a billion impressions a month, which isn't a big amount in the display world. But the response rate in email is much higher; click-through rates can be easily ten times greater. So it's very effective, and inventory will only continue to grow dramatically month over month on the supply as well as the demand side.

So is all email inventory at LiveIntent programmatic?

All of it is available programmatically, but not all of it is sold programmatically because we have the SSP side so that the publisher can sell direct. They can say, "Oh, this piece is going to be available through RTB; this piece isn't going to be. I'm going to reserve this inventory for myself," just like an SSP like AdMeld, which now belongs to Google, of course.

You’re like an ad server, then, for display – only email.

Yes. Either through RTB, or we have our own network of advertisers as well.

I mentioned our platform, LFX. When the publishers are logging in, it's LFP.  Similar to DoubleClick for publishers, we have LiveIntent for Publishers. On the advertiser's side, it's LFA – LiveIntent for Advertisers, just like DFA.

So, to recap, the demand sources are...?

There is what the publishers sold.

Then there are agencies or advertisers that want to buy through us and put in an IO for a million impressions at a ten-dollar CPM with these target requirements – all of this is non-guaranteed. They're making and setting up all the parameters for their campaigns and their bids in our system. That's another source of demand.

Finally, there is the RTB programmatic demand which gets auctioned by our exchange.

Given those three channels, how do you expect that demand to change in the future?

The publishers using our platform before were never able to really operationalize and sell their inventory effectively. Now their sales teams are engaging, so we're seeing high growth in the publisher side selling this inventory direct, just like they do their site.

The other side where we're seeing growth is programmatic or in RTB, as the number of publishers and the scale of our exchange grows.

Follow LiveIntent (@liveintent) and AdExchanger (@adexchanger) on Twitter.

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