Yesterday, Microsoft Advertising and WPP Group's 24/7 Media announced a new deal, which "consists of four main components that will help strengthen advertising technology stacks and expand opportunities for the marketer and publisher clients of both WPP and Microsoft Advertising," according to a release. Read more about the components.
AdExchanger discussed the deal with Dave O'Hara, COO of Microsoft Advertising, and Ari Bluman, President, North America, Real Media Group. Real Media Group is a division of 24/7 Media. (24/7 Media makes the technology that powers the offerings sold by Real Media Group).
AdExchanger: It seems like the key word here is "strategic." Can both of you talk about the reasons behind this strategic partnership for each of your companies?
DAVE O'HARA: Microsoft has had a great partnership with WPP and 24/7 for a long time. The way we look at it is - this is just one more step in a very solid history. 24/7 asked themselves [and us], "How do we make this easier for our advertisers and publishers? And how do we remove friction from the model?"
The fact that we had a long‑term partnership in place made the deal a lot easier to do, because there's obviously a lot of complexity out there.
ARI BLUMAN: 24/7 Media's acquisition by WPP is hitting nearly five years now, and we've been tasked with continuing to build a proprietary [business] along with solid partnerships. To build this end‑to‑end stack where we can make it easier to buy, as Dave mentioned, but also help publishers and advertisers accomplish the goals and objectives they're looking to accomplish.
Better monetization, better yield, better brands, better control. All those buzzwords. Microsoft couldn't be a better partner to solidify the pieces of the stack.
Do you consider this primarily about PC-based display advertising? Is there a cross‑channel opportunity that you're thinking about?
DAVE O'HARA: We're starting with the display advertising world. It's the logical place to start because that's where most of our business is today, but other channels hold opportunity, too. For now, this one's focused on primarily the PC display area, but it's not limited to any specific technology, ad type or format.
Are there minimum spends associated with this deal on either side? -either as Microsoft, as an advertiser using WPP as an agency? -or, does it work the other way, in terms of 24/7 making commitments of spend or inventory?
DAVE O'HARA: Let me just start out by saying we don't get into the details of the agreement. I'm not trying to be cagey there. We just don't.
It's an agreement between the two companies. But we're really not focused on minimum spend. We're focused on how do we partner together better? It's more about commitment to a marketplace and commitment to an ecosystem.
For example, Microsoft Advertising Exchange is going to be the exclusive exchange for 24/7 publishers. We do have things like that in place, but it's not about requiring certain spend. That wasn't the spirit of the deal.
Ari, in terms of what this affords WPP, why is it important to have an exclusive relationship with an exchange? Can you talk a little bit about what that exclusivity means?
ARI BLUMAN: 24/7 and 24/7 Media and the Real Media Group - we power 1200‑plus licensees around the world that utilize our technology to run their own day‑to‑day media businesses. In addition to that, our technology stacks power Xaxis, GroupM's trading desk, as well as the Media Innovation Group and their clientele.
What we're bringing together here is the ability to: better monetize premium brands and automate the buying enabled through trading desks.
That's another piece of the deal - buy it in a programmatic fashion. It's everything that the market continues to ask us for everyday.
Is this exclusive? Does this mean that 24/7 will only be buying Microsoft Ad Exchange inventory versus Google ad exchange inventory?
ARI BLUMAN: Well, 24/7 media itself is a technology company. We're helping just connect the dots, so to speak. As it relates to WPP, WPP will continue to do what's in the best interest of all of their advertisers and brands. As it relates to the Real Media Group, the only exchange that we'll be using for yield optimization for our licensees will be Microsoft.
DAVE O'HARA: It's really about the publishers using 24/7. They will have their inventory available on MAX, but WPP is free to buy inventory from Google or anybody else that they want.
In terms of this one part of the release, where it says "WPP agencies and clients will be able to programmatically create media plans that include Microsoft advertising offerings," what does that mean?
ARI BLUMAN: That's through 24/7 Connect. 24/7 Connect is our tool that allows for ease in workflow. We bring together some of the biggest brands into the mix, and/or even ad networks, so that agencies of WPP can buy in an automated fashion.
The sending of RFPs and the actual execution of buys can be done in a lot easier fashion. Microsoft will be giving us a catalogue of their inventory and some data elements that we can then offer up to those agencies and advertisers, so that they can enjoy that automation and buy more easily.
What do you think this means for the Microsoft/AOL/Yahoo! Agreement?
DAVE O'HARA: This deal is a very strategic deal unto itself. Microsoft and WPP/24/7 coming together helps the marketplace a lot, because we're both big players with sizable amounts of media inventory.
It's in a similar spirit to the Yahoo!/AOL/Microsoft deal which is, again, "Let's create an alternate ecosystem, which isn't controlled by any one company."
It's more of a marketplace where many companies come together, and can openly exchange inventory in the most friction‑free way possible. We see this as a continuation of helping develop that ecosystem.
Clearly, WPP and 24/7 are big players. You can do deals in that ecosystem that are smaller, and then some that are more significant. We see this as a very significant deal.
What's the benefit to Xaxis here? You talked a little bit about it earlier. Can you expand on it a little bit, about how this helps Xaxis?
ARI BLUMAN: Xaxis is primarily tasked with buying audiences and then performing for their clientele. This deal helps them do it that much better.
Why is it better?
ARI BLUMAN: Well, data is obviously a very important piece of the equation as it relates to Xaxis, in order to buy audiences, and then obviously generate the performance they're looking for.
Bringing Microsoft and their exclusive data sets to the table, so that they can buy in an automated fashion, will help that day‑to‑day tremendously - as well as the inventory. What we're talking about here isn't inventory you can find anywhere. This is premium brand quality inventory. Xaxis has several different products that focus specifically around that quality of inventory.
To the marketer or CMO reading this, why should they care about this deal?
DAVE O'HARA: Thinking at a high level, it's about the better matching of supply and demand in the marketplace. The marketers are going to get better insights. They're going to get better matching of cookie data. They're going to be able to drive better results, and the marketer is going to look at it and say, "A really complex world just got a little simpler."
Ari, along those lines, for publishers who read this deal, they may say to themselves, "Why do I need an ad network such as 24/7, when I could go to the exchange that's now a partner of 24/7?" How do you make that case for the publisher, that you continue to target?
ARI BLUMAN: We at 24/7 - since we are owned by WPP - have a 360‑degree view of the business. We have licensees - or publishers -, agencies and advertisers. We also run a media business. The technology powers all of this.
When we bring it all together ‑ you mentioned "why is the CMO interested?" ‑ the CMO is not only looking to improve upon the website experience and bring users to the site and/or generate some type of revenue and profit. They also have agencies and spend a lot of money on outbound marketing. The ability to utilize their own data and merge it with other data is obviously crucial, and we live it every day.
You bring that back home, and you say "Why is this better for everyone involved?" "Why network? Why exchange?" Realistically, the goal here is better performance, the goal here is bigger checks to publishers every month, and the ability to make it simpler to do so.
Dave, I'm curious about your AppNexus investment here. I know that's a central part of the exchange, in addition to what Microsoft also brings to the table. What would you say this means for AppNexus?
DAVE O'HARA: First, it's a great agreement between 24/7 and Microsoft and WPP. Part of the inventory will be sold to AppNexus, so AppNexus benefits because they're going to get some additional inventory.
Really, for this, it's about the broader approach to the marketplace. AppNexus benefits through a piece of it. They're obviously very happy about the deal, but it's not all running through AppNexus. For us, it once again legitimizes the Microsoft Ad Exchange and AppNexus as a key part of that.
It's really about continuing to build out the ecosystem, and the ecosystem is going to require cooperation amongst many of the large players for it to work.
By John Ebbert
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