Right Media Exchange Update From Yahoo! VP McGrory: New Pilot For SEMs, Demand-Side Platforms And Demand Media Partnership

RightMediaThe following is an excerpted interview with Ramsey McGrory, Yahoo! VP and Head of Right Media Exchange.  McGrory discusses recently announced plans for Yahoo!’s display advertising exchange – Right Media Exchange.

Topics covered include:

On the results of the Demand-Side Platform (DSP) Pilot Program…

RM: The specifics on DSPs are actually pretty good. We expected to see improvements in targeting. We expected to see, conversely, that would mean higher bidding, which is valuable to the publishers. And so I think we generally got what we bargained for. Which is the targeting efficiency, the control of frequency, the control of cost. The DSPs are, by and large, moving directionally on executing on that vision. That’s a good thing.

AdExchanger.com: What kind of intelligence did you see on the pricing? OK, it’s higher, but did you see dynamic pricing per impression? Could you see that sort of valuation taking place?

RM: We saw both. We saw static pricing, and dCPM pricing. And I think that’s just the nature of where we are. The DSP pilot, out of the gate, was about enabling the holding company agencies, which were creating the audience‑based buying strategies. And the agencies tend not to be technology builders, they were looking at this new class a year ago. But I think some of the same thinking and process still exists in the agencies about how you price and how you book campaigns. So we saw a mixture of different pricing types, tended to be CPM or dCPM. I think overall the CPMs that we saw through the pilot were 3X what the CPMs were coming through ad networks.

So for us that’s said a couple of things. One is that targeting efficiency using audience based buying platforms, where there are audience insights coming from the buyer, the seller, potentially a third party, can drive greater efficiency in targeting. On these types of buys, no longer do you have to buy composite like you buy television.

And there is no implied waste. If you have an audience segment that defines the audience, that’s 100 percent valuable. I think the DSPs are also acting as ad servers in some cases, that the ability to control frequency is important to big brands who view excessive frequency as waste, you know, wasted message.

And then cost control, the ability to use a biddable marketplace to engage the audiences is valuable for large marketers.

AdExchanger.com: Did the pilot involve real time biddable inventory only, or did it involve both, or was it non‑RTB?

RM: Both.

AdExchanger.com: And was there a difference in performance there or even pricing?

RM: We didn’t break it out. Remember that some of the DSPs use our platform as their underlying ad server and when they do that, they are already bidding in real-time. So, real-time bidding is, in great part, when the decisioning is sitting outside of the ad server where the supply is.

(…) When you’ve got a separate platform, rather than pushing all of your audience definitions from that platform into (Right Media’s) Yield Manager, the bid request sends a… In this case, Right Media sends a bid request to the buyer’s platform and says, “Hey what do you bid?” And, so it’s a more efficient way of completing a transaction, but it is not always needed. If you already have your segmentation in there, you’re fine.

RTB is such a complex topic, it is hard to spend five minutes on it. But, it is a piece of the pilot. I think people tend to underestimate the value of stuff like the right sales engagement between the publisher and the DSP, given that the DSP is acting in some cases as an agent and some cases as a network. (…)

On a new Search Engine Marketing pilot on Right Media Exchange…

RM: We’ve augmented the DSP Pilot in two ways. One is that we’ve created another track with SEMs [which includes] Kenshoo, Marin, SearchIgnite and Efficient Frontier. They’re all significant partners of Yahoo! They all have either already said, or they are moving towards a more integrated product and service around a combination of search and display.

We love the fact that they are already significant partners and we’ve got great trusted relationships. They, by and large, have the DNA of a technology company that understands algorithmic, bid‑based systems.

I think relative to the DSPs, they probably don’t have the same level of fluency yet in all of the different variables and all the different things that happen in display. So, we’ll be working with them more collaboratively on things like pricing strategy where they’ll take the knowledge that they have in search and try to apply it in display. (…)

AdExchanger.com:  So, with the SEMs they could technically be creating demand in display and then fulfilling it in search. Is there any sort of work in that area that you’re going to be doing with them?

RM: Well, we already have. Yahoo has a search retargeting product which has been very successful. I think the other way we’ve been bringing display into search, is part of why we’re calling it a pilot. There are some things that we know and don’t know. And, there’s collaboration to figure out all the pieces.

But, it’s fairly clear that one influences the other. And, there’s been enough research that shows that it definitely does and that there’s value in having a more holistic look at overall digital marketing.

Yahoo Right Media stands in a great place. Yahoo’s got search capabilities and massive display capabilities. We’ve got a platform to actually enable it through Right Media. So, I think we’re in a great position to lead how the SEMs evolve their practice beyond search. And, I think that’s good for everybody.

On Demand Media, a publisher for RTB participants on Right Media Exchange…

RM: Regarding real-time bidding (RTB) in the DSP pilot, Demand Media has agreed to be a publisher in RTB for the DSP participants. What I like about Demand Media is that, along with the acquisition by Yahoo of Associated Content, it’s getting integrated into the overall Yahoo Ad network with Demand Media and all of the websites and ad inventory that they have. We’re going to continue to see the Right Media Exchange grow. That’s a set of inventory that hasn’t been that widely available.

On Right Media Open, an event produced this week by Yahoo! for its Right Media partners…

RM: I love the opportunity to get our participants, our marketplace participants, together. And to do it with an agenda of not grinding facts, and having it not be one Right Media sales pitch after the next, but actually an open discussion about what’s going well and what’s not going so well. It’s what made Right Media what it was – the ability to have that open conversation and make changes that fit.  It’s good for the marketplace for that to happen.

(…) Relationships matter in this market. Technology is great, but relationships and understanding partners and competitors and all that, that matters.

By John Ebbert

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1 Comment

  1. Relevance Police

    A few questions that might be interesting to ask him in the future:

    1) What and where is APT?
    2) What percentage of users use RightMedia as an ad server, and why?
    3) What’s Yahoo’s view of Demand side ad servers?
    4) Will/can Yahoo think of itself of as an ad serving platform company (like AdX or the Microsoft advertising platform)?
    5) What is the roadmap for the RightMedia exchange?
    6) Is there anything new in analytics?
    7) What sort of insights are there in terms of creative impact on these sort of tests?