AdExchanger: What exactly does AppNexus supply you with? Is the bRealTime exchange powered by them?
MIKE SEIMAN: Yup. That’s powered by AppNexus. We use their technology. Everything from the ad-serving features to the RTB programmatic exchange. We use that to power everything we created on it. We have our tag systems and other pieces, but they’re the back end. They power that programmatic market.
JEFFREY HIRSCH: We felt we could do a better job servicing supply and demand partners by leveraging their technical strength without having to make that kind of investment ourselves. It makes us more nimble and able to adapt to the market, look at each individual constituent we’re working with and use our own products and services on top of AppNexus to provide what they need.
How does that relationship work? If there’s a feature you need, do you dial up AppNexus and say, “We need this.”
MS: It depends on what the innovation is. If the innovation is around programmatic optimization or private marketplace pieces, we call them. If the innovation is more external from that process … we’d build it. Specialty rich media and things like that? We build those units here and use AppNexus, and other people, to power the liquidity of that unit.
You launched bRealTime Select in May. Is that a private marketplace?
JH: Private marketplace is part of it. When you think of programmatic, a lot of companies with their stacks are saying, “Here’s how we want you to do things.”
We want to say, “How do you want to do things with us to power that?” We don’t want to be tied to any specific requirement that owning our own platform would do. What I mean by preferred programmatic is how do you prefer to take part in this marketplace?
So it’s a range of options.
MS: We have an understanding of the complexities publishers have operating ad technologies. The world talks about programmatic and bringing efficiencies and making it easier, but to some degree it became more complex to maneuver through that market. Publishers feel they need four ad ops guys to manage all these tags and infrastructure. But when you think about maneuvering through the programmatic landscape, some of the mid-tier publishers can’t support that infrastructure or understand how to navigate it. They need a partner.
That’s something we provide as a service through bRealTime. It brings you into programmatic. Let us help you leverage all of the private marketplaces that exist, the exchange technologies that exist, and we can bring it to you in a more automated fashion so you don’t have to figure it all out.
You mentioned the mid-tier, but big guys like Hearst are plugged into bRealTime. How do they use it?
MS: You have guys at Hearst very versed in programmatic, but they also want to leverage what other people have. So in instances with larger publishers, we bring the toolset or skillset that we have, mostly revolving around the exchanges we play in. Hearst also has other relationships – they’re big partners with Google. They’ll maneuver through that market, using the Ad Exchange and everything Google provides.
We have other exchanges we leverage, such as the AppNexus market, which we help thread that in to their stack.
How many exchanges do you manage?
MS: BRealTime is built off the AppNexus market. It also works with Google. We’re talking to and trying to understand if there’s a possibility for us to work with Facebook, with what they’re trying to do now. That dialog isn’t very far because they’re just testing the waters of apps, and we’re trying to see what our ability is to play there.
We’re looking into all of these pieces. You have AppNexus and Google. Where does Right Media or Yahoo play long-term? In the past, we’ve been big partners with Right Media, and we still feel there could be a place working with them as well. We just need to see how everything falls out.
When you say you’re working with Google or talking to Facebook, what exactly does that mean?
MS: It means leveraging their exchange and their liquidity. Google has the exchange they built through DoubleClick and we’re a partner of that exchange.
So practically speaking, you sell Google inventory?
MS: Through bRealTime. The publisher works with us and leverages both Google’s exchange and AppNexus’ exchange as well as all the direct advertiser dollars we bring to the table. Through the AdReady platform, we have direct advertiser deals that come in.
So as a publisher, you get to leverage multiple exchanges, our direct-response campaigns through CCDR and our direct clients that work through the AdReady platform. You get a larger piece of that ecosystem.
What are the considerations when partnering with an exchange?
JH: We look for quality, liquidity, the differentiation we can provide in an exchange environment vs. what they have. Overlap is a big concern.
CPXi is placed in a bucket with other traditional ad networks like Specific, Collective, etc. Is that where you want to be and, if not, how does CPXi categorize itself?
JH: Ad networks’ original business model was to aggregate quality inventory, add value to it and offer it. There’s nothing wrong with that.
People started to get into trouble when too much arbitraging happened and an inappropriate amount of margin was being taken in the middle. If you look at the public numbers Rocket Fuel posts, in terms of their gross margins, they’re very, very high. That’s where ad networks got into trouble.
The shift isn’t from who’s a network and who’s not. It’s about who’s providing the right amount of value for the right amount of money. Programmatic has proven that, with the efficiencies you get, marketers get more for their money and publishers can get more dollars. And providers like us can take a fair share for providing a service. But not so much that it’s damaging the ecosystem.
Why is everyone so excited about native these days? It’s not exactly a new concept.
MS: It’s new inventory. If you’re a publisher, it doesn’t cannibalize anything you sold before. It’s a new revenue stream. You get to recirculate your audience, keep them onsite, and get them maneuvering through your system to read more of your content. You’re using the space [traditionally used] to promote your own content now to monetize.
And for an advertiser, you’re now able to integrate more with that site’s audience. Instead of being that sore banner stuck in the corner.
But haven’t those benefits always been there? Why the uptick now?
MS: I think people were just looking the other way. People have been so heavy on banners and display. Display had consumed everyone’s brainpower for so long. How do we control this display to get more market share?
Some people woke up one day and wondered why we’re hammering our brains trying to steal market share through display. There’s a whole opportunity that nobody’s going after. Smart companies like Outbrain and Taboola saw that opportunity and seized it a long time ago, five or six years ago. It just started to blow up because publishers finally got to the point where they realized display is not enough. Especially with the proliferation of mobile. When traffic started shifting more toward mobile, native played very well in there, and it crossed over to desktop.