AdGear Building A New Ad Serving Platform For Advertisers And Publishers Says VP Stesin

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Vlad Stesin is VP, Strategy at BLOOM Digital Platforms, makers of AdGear, an ad serving platform.

AdGearAdExchanger.com: Please discuss AdGear. How did it start? And what challenge is AdGear trying to solve?

The team working on the platform has built and operated the proprietary ad serving infrastructure at Cossette, Canada’s largest independent advertising agency. We’ve been running that platform since 2001, serving billions of monthly impressions for clients such as Coke, General Motors Canada, McDonald’s, Nike, H&M, Brother, GlaxoSmithKline, Molson and others. Our emphasis has always been on two things: richness of data and flexibility of ad formats, no matter the shape they take.

In 2008 we spun out the digital marketing technologies team into BLOOM Digital Platforms, where we set out to build AdGear, our new generation of ad management tools for publishers and advertisers. Our goal is to build a true next-generation ad platform with an emphasis on managing data and properly accommodating for third party services, be it optimizers, ad networks, third party data providers or ad exchanges. Unlike legacy systems built before things like yield optimization and third party data exchange were commonplace, AdGear was built from the ground-up specifically with the intention of making dealing with such services simple and comprehensible for publishers.

We have released a first version of the publisher product last year, while the advertiser version is currently in closed beta.

Who do you see in your competitive set? What will be the key differentiators for AdGear?

Our focus is on data and connectivity with other systems. Digital advertising should evolve the same way Internet itself evolved -- as a network of networks, loosely coupled together.

We feel that the stars are finally aligned for a new generation of ad serving platforms that are not constrained by legacy technology and old paradigms for inventory management. The opportunity for us is to allow publishers to come up with unique advertising opportunities driven by data and new creative integration possibilities, and for advertisers to effectively leverage them.

Tell us about the video of the data visualization of AdGear RTB in action.  (See a larger version of the video here.)

This is a visualization of actual live traffic flowing for a simple retargeting campaign that is running for an online stock brokerage.

From the left, the small bubbles represent the amount of queries for bids we get from the Doubleclick Exchange 2.0. On the right are the actual bids generated by the RTB engine. Pricing is fairly static in that period, but the size of the bubbles on the right represents the CPM bid. The visualization itself is done with the help of an open-source tool called gltail. We’ve simply configured it to take our live data, parse bids and bid requests, and visually show what’s going on -- in real time. It's just a fun way to see what's happening.

Who will be your clients generally speaking? How might this client list expand?

On the publisher end, our ideal scenario is to work with web applications and platforms with applicative functionality. In these cases, we inevitably create value by making available a wide range of targeting criteria, ranging from site content to intent data, user profile data and behavior. We even have functionality that allows publishers to share or sell their data profiles.

We believe that ultimately it’s this data that allows to create a competitive advantage for direct sales, or for clever use of ad networks and other third party services. We are seeing a lot of traction exactly from these kinds of partnerships, and publishers appreciate the control and choices this offers. For example, AdGear powers in-stream ad delivery in the StreamTheWorld platform which offers live audio and video streaming solutions. Another example is us powering ad delivery on a few niche social networks, leveraging proprietary profile and behavior data.

On the advertiser side we have two Canadian agencies that are participating in the closed beta. Our goal there is to help agencies transition from ad serving platforms to trading platforms, building data networks around brands and plugging into the right pools of inventory. An emphasis there is put on benchmarking, which we feel helps media agencies gain strategic control over customers.

As far as expanding the client list, soon we are planning to announce a distribution agreement with a major software company who counts many of the world's biggest newspapers as their clients. That partnership and a few others like it are part of our larger integration strategy.

How does AdGear address publisher needs that haven't been met previously by ad networks?

What we have to offer is technology. We don’t sell or resell media, and do not do arbitrage of any sort. We feel that there is a class of publishers that is currently struggling with juggling their premium direct sales, their own second- and third-tier ad products, as well as ad networks. AdGear can help them go from juggling to controlling and measuring.

Ultimately, the goal for publishers is to create a competitive advantage for themselves. I don’t think that an ad network can do that for a publisher. The natural tendency there is to tone down the context and put an emphasis on the user. But the sustainable edge comes from deep integration of ad platforms to take advantage of behavior data, content, user profiles, previous ad performance and a slew of other patterns. Once that is done, plugging third parties is easier and often allows to create more value for advertisers.

What do you see as the differences in the agency model between Canada and the rest of the world?

Generally speaking, agencies in Canada are facing the same challenges as in other parts of the world. There is an added complexity that comes from the the bilingual nature of the country, where Quebec is a self-contained media environment with its own media brands and habits.

From the perspective of ad exchanges, data exchanges and real-time bidding, I don’t see much activity in Canada just yet, but the market will certainly catch up once it becomes more mainstream in the U.S.

How do you see the exchange space playing out in the next few years?

I am hoping that ad exchanges will not become asylums for the “evil aliens of the direct response planet”, as Randall Rothenberg succinctly coined the term. The principles behind ad exchanges, allowing advertisers to exercise more control over the process of reaching the right audience, should serve both to direct response and brand advertisers. Although DR campaigns are a no-brainer, brand campaign are currently at a disadvantage.

We believe that real-time bidding itself should and will become part of first-party ad serving systems, especially at larger publishers reluctant to commoditize their inventory by dealing with intermediaries. The challenge for advertisers will be in benchmarking and keeping track of the diverse targeting criteria available across the various pools of inventory. But it’s also a source of strategic control, and we will be seeing more of agencies using data as a main driver of their competitive advantage.

What are your thoughts on data exchanges?

It is a fantastic trend because it puts an emphasis on the audience. In a more global sense, value systems based on the exchange of data are a good thing for the industry and for the consumer. And ultimately it all comes back to the idea of publishers and advertisers having the right tools to exercise complete control over their data -- whether it is to use it themselves or to collaborate with third parties.

What doesn't get commoditized in the end? Data? Algos? Other?

As someone who spent years in the agency environment working with big brands, I am cautious of jumping to the conclusion that data alone will solve the commoditization problem. The new ad ecosystem needs to work in unison to actually create value for advertisers, and this goes beyond the idea of simply reaching the right people.

What doesn’t get commoditized is media creativity: publishers and agencies having the right tools in their hands to gather insights from data, plug into third party services and come up with clever ad executions. Sometimes this requires new formats and custom integrations, which need to be accommodated for but are typically too difficult to manage with legacy ad platforms. This is a huge challenge but we're very excited to be creating these opportunities.

Follow Vlad Stesin (@vstesin), BLOOM Digital (@bloomdigital) and AdExchanger.com (@adexchanger) on Twitter.

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