Welcome to episode No. 17 of AdExchanger Talks, a podcast focused on data-driven marketing. Subscribe here.
Ari Paparo is a unique figure in digital advertising. One of the legions who came up through DoubleClick, he later held senior roles at Google, AppNexus, Nielsen (he is a patent holder on Nielsen’s Digital Ad Ratings product) and Bazaarvoice before founding his own company, Beeswax, in 2015.
He also advises startups and maintains a running commentary on ad tech via his widely read Twitter account.
In this wide-ranging episode, Paparo provides an update on Beeswax before talking in depth about a range of digital ad trends with his signature dry humor. It’s all here: Snapchat, Google, Facebook, AppNexus, header bidding, consolidation, walled garden malfeasance and the drought in venture capital. You’ll want to hear the whole thing.
On the thinking behind Beeswax, he says,
“There was a class of buyers of media who ultimately were dissatisfied with DSPs. There are some buyers who have their own very sophisticated ideas about the market, or their own data, that is difficult to express in a one-size-fits-all DSP. Those customers would end up being frustrated with their options, being either build-your-own-tech, which is super expensive and very low-ROI, or just make it work in a DSP using whatever tools are available.
We built a new concept, the bidder-as-a-service, the idea is that we will provide a single-tenant bidder for a customer, effectively a DSP in a box that allows each customer to really write their own algorithms, change the data models, get full transparency and have all the benefits of a homegrown bidder tech but in a platform model.”
Beeswax’s customer base has grown to about 30 companies, mostly ad networks and marketers, which pay on a sliding scale starting at $8,500 per month. It’s not a new category so much as a “better mousetrap,” Paparo freely admits.
On Snapchat’s chances, he says, “I would argue as an observer that the quality of their ad products is extremely high – vastly higher than Twitter, for example, and quite a bit higher than Facebook. Their ads are always video, always vertical video, 100% viewable, 100% share of voice … sound on. That’s a pretty good ad product, as mobile goes and as the fickle younger generation tunes out pre-rolls.”
But Snap’s creative innovation comes with a scale challenge. “From an agency buyer’s perspective, the question of scale will inevitably show up. ‘Why should I take the effort to buy some custom weird thing … when I can’t run the exact same thing at scale on TV, on Facebook, on other platforms.’ Almost every innovative ad format has had this problem when it started.”
But he says with Snap it’s more significant, in part because we’re living through a period of heightened buy-side resistance to nonstandard ads and measurement. “They’re aware it’s a problem. … I don’t think they’re there yet, but that’s clearly where the effort is going in their engineering team.”
This episode is supported by Acxiom.
