Though associating display advertising with a popular character from J.R.R. Tolkien’s Lord of The Rings makes for an entertaining visual, Legolas Media and its new CEO Jonathan Shaevitz have decided it's time to call a spade a spade and purposefully engage the guaranteed media marketplace; they’ve re-branded the company Upfront Digital Media effective immediately.
The company claims to be a cross-screen, multi-format “programmatic direct solution” (press release). Put in the context of “The Upfront” model, which has been a staple of the traditional media buying diet, Upfront Digital Media wants to offer a mixture of digitally addressable targeting, which is popular in spot markets, while guaranteeing the reach and scale of upfront buys presented via an advertiser’s insertion order.
Shaevitz tells AdExchanger that the company funnels demand to inventory, aggregated through 60 curated publishers who collectively match advertiser audience requirements for – primarily – display advertising. Shaevitz adds, “We view the agency and the brand marketer as our customer and the publisher as our partner. We are not an SSP (sell-side platform). We’re not putting their inventory up for bid in any way and trying to make money there.”
Gnawing on both sides of the layer that Upfront Media and others are trying to carve out are private marketplaces/exchanges, which provide programmatic just-in-time access to inventory. Also, publishers could fear that Upfront's guaranteed “sale” arrangement with the advertiser threatens to cannibalize the publisher’s own direct sales efforts.
On the former, Shaevitz recognizes the threat that private exchanges pose, but he argues that the “upfront” model can guarantee scale that private exchanges do not. Also, ironically, Upfront Media buys through private exchanges to fill out IOs – even though it’s less than 10% of the ad spend it sees today.
On cannibalization, attractive CPMs incent publisher participation ($8 display CPMs on average according to the company) as does transparency on the buyer. “This is not general real-time bidding stuff,” says Shaevitz. “Publishers know who the advertiser is, what the targeting requirements are and what the price is that they can say ‘yes’ or ’no’ to. When they say ’yes, ’ they have a guaranteed commitment, typically, for a quarter if not a year.”
Buyers like Christine Peterson, media director at Publicis agency MRY, see the benefit for Upfront Media’s guaranteed offering. She tells AdExchanger, “I think the challenges of a non-guarantee begins with what the clients are facing internally. If they don't use budget, they lose it – and that's certainly not what they're looking for. There are also levels of security in the quality of the content they need to associated with. If you separate that from the data, and say the data's the only important thing, then you are taking other risks – even when you can have verification on top of it. It doesn't necessarily get you the comfort and security of the right marketplace.”
From an ad dollar perspective, Upfront Media is seeing client ad spend breakout into 70% traditional display, 20% video, 10% mobile. Shaevitz believes that the video segment has big growth potential led by the market acceptance of Nielsen’s Online Campaign Ratings (OCR) product. He says, “While people can argue about its technical merits, we think it’s wonderful because it’s created a common currency. Brands, agencies, all of us – we can all agree upon and deliver against it.”
Though he deferred when asked about exact revenue figures, Shaevitz says the company’s growth continues and points to his company’s increasing headcount – from 20 to 35 already this year, with more sales and marketing “heads” on the way. So is more funding around the corner? “We’ve been having good years and good revenue numbers, so I suspect we’ll think about funding in 2014,” he says.