Most Online Ad Spending Is ‘Guaranteed,' But Efficiency Tools Still Too Tilted Toward Remnant

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James Beriker has led two companies that ultimately became big acquisitions in the digital ad space. The first was Efficient Frontier, which was one of the pioneers of search and social media marketing. It was sold to Adobe in a deal completed this past January. About two years prior to that sale, Beriker had already moved on to heading up “dynamic display” ad provider Dapper, which was acquired by Yahoo nine months after he joined the company.

Beriker exited Yahoo in July, but instead of parachuting into another startup, he decided to take a on the role of Entrepreneur-in-Residence at Silicon Valley-based Matrix Partners, an early stage venture capital firm.  He is also on the board of video ad delivery tool EyeView and self-serve, sell-side facing isocket. We checked in with Beriker to get a sense of how his past companies are looking these days and how his work may be influencing his investment plans.

AdExchanger: This past summer, you left your post at Yahoo as VP of display advertising. The company has been displaced from its long-held position as the display marketplace leader by Google and Facebook. Can you talk about your perspective on the future of Yahoo, especially as not-so-new CEO Marissa Mayer settles in? 

JAMES BERIKER: Yes, I joined Yahoo through the acquisition of Dapper, and left after almost two years to get back to what I am most passionate about, which is to help build and scale product-driven companies that are breaking out of the start-up phase.

I don’t think you can count Yahoo out by any means, especially with a strong product leader like Marissa Mayer at the helm. She has very valuable assets to work with and, if she takes a long-term view, continues to break down the politics and structural inefficiencies inside the company, and empowers the broader team to take risks, she has the opportunity to develop a much stronger Yahoo.

Why did you decide to join Matrix Partners as EIR?

As an entrepreneur in Silicon Valley, I wanted to gain a more informed perspective on how a leading venture fund operates, particularly around the assessment of investment opportunities. Matrix rose to the top of my list because they have a long track record of investing early in transformative businesses and their core philosophy of investing in entrepreneurs who seek to disrupt big markets -- and working with them for the long term to build significant businesses -- really resonated with me.

So, is there any advice that you would give entrepreneurs who are raising capital?

Sure. Based on my experience on both sides of the table, I can reduce my advice to four simple things: live, breathe and love the business you are building because it’s that intangible energy that drives success, and investors know it; seek to disrupt a huge market with a technology or product that addresses a current or near-term need; build the best early team of “believers” to help you execute on that opportunity; and, finally, optimize for investors who are aligned with your vision and perspective on the world and can add long-term value to your business instead of optimizing for valuation and optics.

What led you to accept positions on the Boards of Eyeview and isocket?

Well, both Eyeview and isocket are led by founders who have that intangible energy I referred to earlier, and I believe that both companies have developed technologies that can transform large and growing markets and become significant stand-alone businesses.

Eyeview built the only technology that I've seen that can render and encode thousands of variations of pre-roll video ads on the fly, and serve those variations based on the data available about the consumer viewing the ad. This is similar to the type of innovation that Dapper brought to display advertising -- the ability to leverage data to dynamically deliver a more relevant, personalized ad -- and to do that in the amount of time it takes to serve an ad and at massive scale. This has the potential to hugely transform video advertising online, from a channel in which advertisers simply repurpose television ads to a channel that harnesses the true capabilities of the medium. And, this gets even more interesting if you play out what is bound to happen with connected TV.

And isocket?

Isocket has developed a major innovation in premium, guaranteed display advertising that I think will change the landscape. Over the last five-plus years, the majority of the companies on Terry Kawaja’s Lumascape have been building products and businesses to bring efficiencies to the remnant advertising market. But, 70 percent of online ad spend is in premium, guaranteed advertising. Isocket’s platform brings the efficiency and automation available in the remnant market to the premium, guaranteed market.

The way it works is elegantly simple. Isocket is integrated with publishers' ad servers, including DFP; so, for publishers it is as easy as enabling isocket from inside their ad server. Once enabled, isocket has access to the rate card and inventory availability information and can insert guaranteed orders directly into DFP as line items for execution. On the demand side, advertisers, agencies, trading desks and DSPs use the isocket API to build and execute their campaigns across 1,500-plus premium publishers.  There’s a great workflow process for getting all that done between advertiser and publisher, without any paper insertion orders or fax machines.

The opportunity for isocket is to take friction out of the buying and selling process for premium, guaranteed advertising and to help premium publishers more effectively monetize the “big fat middle” between hand-sold, highly customized, high CPM executions and remnant inventory that is cleared through exchanges and networks.

You were CEO at Efficient Frontier. What made that entity successful?

Efficient Frontier brought portfolio-based optimization technology to market at exactly the moment when large search advertisers needed help managing and scaling their search campaigns. They had exhausted the proficiency of spreadsheets and rules-based bidding tools. And, EF did this by building the best technology and leveraging data to drive campaign decisioning in an entirely new way- and solving a major pain point in an accelerating market. It was a green field opportunity, and EF took full advantage of it.

Where do you see those kinds of opportunities to innovate today?

The advertising technology landscape is complex and evolving quickly and green field opportunities will continue to exist as more advertising dollars come online, and as social, mobile, video, connected TV, and the use of data continue to evolve. Companies like isocket and Eyeview have built technologies that have the opportunity to transform entire categories of online advertising, like EF did- and I think that there will be others. It feels like we’re entering a new wave of innovation in ad tech -- and that’s exciting.

Follow James Beriker and AdExchanger on Twitter.

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