Partners Drive Video RTB Growth At SpotXchange, Headcount and Bid Volume Spike

Mike Shehan, SpotXchangeOver the last year, video ad marketplace SpotXchange has increased real-time bidding to roughly one-third of its inventory, up from 5% in 2011. This year, SpotXchange CEO Mike Shehan says nearly half its inventory is expected to be traded programmatically.

While Shehan won’t offer specific dollar amounts, the company says that its video RTB marketplace generated 10 times more gross revenue growth in 2012 over 2011, a year after it began taking bid requests. Additionally, SpotXchange claims a 596% increase in global bid requests during the same period, with 2 billion requests coming in per day at the end of 2012.

“I would say that about 99% of the dollars coming into our video RTB marketplace are from brand awareness campaigns,” Shehan told AdExchanger. “And that has taken some time for agencies and their trading desks and the marketers they represent to adjust to this format. But last year, things started happening — interest and curiosity started to translate into spending.”

SpotXchange credits the collaboration with its  RTB partners – including Google’s DoubleClick Bid Manager, VideoHub, AcuityAds,, Digilant, Struq and AdMaxim — as having helped draw in publishers and agencies, and convinced them to think of video RTB as another channel for online brand dollars, as opposed to simply viewing it as another vehicle for low-cost direct response placements, which is still the primary impetus for programmatic spending, and for the most part, online advertising in general.

“Because we’re talking about brand dollars, media planners have different goals and standards,” Shehan said. “Context is everything to them, not a cost-per-action placement. They care about engagement metrics like completed view rates, as opposed to how something converts or if they can retarget.”

In terms of growth for this year, Shehan points to ad categories like entertainment, autos and consumer packaged goods to supply the brand dollars. Secondly, the company is working on greater international exposure to attract new marketers.

For example the amount of European Union impressions last year increased 35x while the amount of impressions coming from the Asia Pacific region rose 7x. In total, over 45 countries are receiving bid requests for video RTB on the SpotXchange marketplace.

SpotXchange is also planning more hiring this year as it rolls out more services designed to promote “guaranteed programmatic” — the idea of adding an automated layer to the traditional direct sales and media buying process between agencies and publishers. It had doubled the size of the company in 2011 to 80, but barely added any staff last year. Shehan expects to to add 30 to 40 employees over the course of this year.

“The idea of private marketplaces will unlock RTB video brand dollars and you need people to make that happen,” he said. “I don’t know a single seller and buyer that doesn’t want to have some direct contact with the person on the other side of the screen. The programmatic layer, the automated layer make it possible for these parties to conduct those direct transactions, and at the same time, produce the kinds of cost and time efficiencies that come from automating the process frees both sides up to deal with several suppliers. Guaranteed programmatic is the next step in evolving private marketplaces. And once that takes hold, the dollars in the space will just explode. And we plan to be ready for it.”

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