Before Google and Facebook set the tone of how display ad spending was doing, there was ValueClick. The ad network is still a key display bellwether, but it's also facing a number of challenges as it aims to meet the challenges posed by real-time bidding and social media. ValueClick's Q1 earnings were a mixed bag despite some notable gains, much of which was driven by its ad targeting tool Dotomi, which it bought nearly a year ago.
Challenges notwithstanding, ValueClick appears to be heading into the second half of the year with greater momentum, as reported by Bloomberg's Niamh Ring. The company's stock hit its highest mark in three years after it released Q2 guidance showing higher than previously expected profits and revenues. We spoke with Bill Todd, ValueClick Media's president, about the changes the company has gone through and how it views the current display landscape.
AdExchanger: How has ValueClick evolved beyond just an ad network?
We are focused on adding value to display impressions, regardless of the source, and creating incremental lift for our advertisers through our unique combination of proprietary data, algorithms, expertise and reach across platforms (display, video and mobile). While we are proud of our network – which includes over 10,000 sites with direct one-to-one relationships – it does not define the value we add for our advertisers.
Over the past few years we have invested heavily to build our bid management and DMP platforms to help us leverage the traffic opportunities that exist beyond the traditional network model. Our expansion into exchange inventory via RTB has given us additional context into our users that we use to better refine our decisioning. [This] has enabled us to achieve stronger results for our clients at incredible scale. Finally, we have scaled the RTB portion of our business without negatively impacting our margin profile for our clients.
What are some of the challenges and opportunities in the space, especially with the rise of RTB?
The most common challenges we hear about from our clients are that the space has become way too fragmented and confusing. There are way too many point solutions all competing for a piece of the pie. Many marketers have a difficult time keeping it all straight and are confused. VCM today is a full service digital marketing company providing 3,000-plus advertisers an end to end cross platform targeting, reporting and analytics engine. We just happen to operate a massive network as well. The rise of RTB enables that vision by adding more efficiency to everything we do and of course drive results for our customers.
How has Dotomi contributed to the business?
Dotomi has contributed tremendously to the overall strength of ValueClick. First of all, the people have been incredible. Strategically, there are a great fit between what we do well at VCM and what we do well at Commission Junction, our affiliate marketing division, as Dotomi acts as a customer relationship management offering that finds an advertiser’s existing customer base and engages them in a brand-friendly way to return to the advertiser for additional purchases. We have only begun to leverage the core assets across ValueClick to offer a broader suite of solutions to our major advertisers. The market can look forward to many exciting new solutions in coming months.
How do you regard the value of clicks as measurement?
The market is all over the map on this topic. I was at the IAB conference last week where [The Kellogg Company's associate director for Global Digital Strategy] Bob Arnold said “clicks don’t matter.” I agree with Bob in the sense that I think of clicks as a proxy for a more meaningful consumer interaction. That said, the market still values the click and as a result, our business is one that can support the clients end goals whatever they may be. Over time, I do believe the market will rely less on click-based metrics and move towards things like engagement and interaction rates.
What trends are you following right now? For example, everyone is obsessed with figuring out social media as an advertising vehicle. Do social media sites present a good venue for display advertising?
There’s always something new to talk about in this industry, which is what makes things so exciting for us. We believe any sustainable, large-scale traffic source is a potential opportunity for us, given our track record in leveraging our proprietary data, optimization capabilities, and experienced team to drive value for our clients. We’re proving this to be the case with RTB, which gets back to your first question about ValueClick Media having evolved beyond its traditional network model.
We’ll continue to assess the opportunities of social traffic, but for us, it ultimately comes down to us finding ways to add more value for our advertisers.
By David Kaplan
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