ValueClick Customers Regard Facebook Exchange As Interesting, But Only ‘Sporadically’

John Giuliani, CEOValueClick CEO John Giuliani was harder on the company’s Q4 2012 performance than the analysts on the company’s earnings call. Though revenues rose a decent 14 percent to nearly $200 million for the period, it was quite a difference from Q4 2011’s 42% gains, which were largely driven by the addition of Giuliani’s previous company, ad targeter Dotomi, to the mix. Read the earnings release.

Still, for Giuliani, who was promoted to CEO from COO in December, the focus continues to be on completing a tighter integration of the company’s parts and in rounding out ValueClick’s leadership. During the call, he said the company would likely name a chief marketing officer in the coming weeks. Also, once the company finishes consolidating its analytics and data operations, a single exec will be put in charge of that function as well.

Apart from integration, analysts were interested in how the company’s ad network positioning has evolved in the age age of programmatic buying, and how it has benefitted from its role as a Facebook Exchange preferred partner. Giuliani said FBX was intriguing to clients, but that at the moment, it remains experimental.

“We’re seeing sporadic demand” for FBX, Giuliani said. “I wouldn’t say advertisers are looking for that service across the board. It’s more of curiosity than anything else at this point.”

The lack of intense interest stems from the requirements FBX places on advertisers, Giuliani said. In particular, clients are a leery of giving up creative control and surrendering consumer data.

“It depends on the business and whether Facebook Exchange fits into it,” Giuliani said. “But it’s an efficient inventory opportunity and we look for unique reach, performance and price in everything we participate in. FBX has all that, but it’s too early to tell whether the conversion rates go up enough. It’s not a headline, but it’s really just a mix of inventory right now. And we think of inventory as fairly fungible. As such, we’re not too tied to any one inventory source on purpose.”

Most of Giuliani’s attention is on integration. In other words, don’t expect too much M&A activity this year.

“The critical focus right now is on getting our priorities ironed out,” he said. “When you do too much M&A, you don’t get much done. We want to do an intelligent integration. We’re not going to be looking for M&A opportunities. We get approached all the time. If it helps us with the affiliate business or mobile or video, we will take a hard look at what’s being offered. What you won’t see us look for is any kind of M&A to add general growth. I think it’s important for our customers, shareholders to generate organic growth out of our existing assets.”

And for the moment, Giuliani is dissatisfied with the results from those assets — affiliate marketing (represented by Commission Junction), media, and owned & operated.

“I’m never really happy about these things,” Giuliani said. “We try to fight off any hubris. When I was running Dotomi, I was never happy and we had 95%, 98% growth rates. I want our organization to be judged by how well we exercise the opportunities.”

Giuliani was asked how the company’s primary ad network business, which is run by President Bill Todd, has maintained its relevancy at time of real-time bidding and programmtic media buying. He said the ad network had broadened from the traditional model in the past year, and noted that ValueClick has a full range of programmatic, buy-side abilities.

“Whether it’s providing a managed demand side platform to our customers or something else in the exchange space, we’re one of the few companies that can be full service,” he said. “We also have proprietary mobile and video capabilities. So there is plenty for us to do and to compete against in this area.”

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  1. It’s my birthday today, and so I’ll permit myself the pleasure of setting readers straight, for Mr. Giuliani has gone so far into the realm of propaganda/F.U.D. that no honest FBX partner can let his comments go without the retort they deserve:

    “We’re seeing sporadic demand” for FBX, Giuliani said. “I wouldn’t say advertisers are looking for that service across the board. It’s more of curiosity than anything else at this point.”

    Counterpoint: the only other big retargeting firm saying the same thing is Criteo. Like Dotomi, they are saying this not because demand is sporadic, but because they don’t have a solution ready for it. To be clear, the reason Dotomi doesn’t have a solution ready is because FBX caught most firms by surprise, both in the timing of it and the architecture decisions FB took & which render solutions like Dotomi & Criteo useless.

    But make no mistake, demand is strong & consistently growing for FBX . FB COO Sheryl Sandberg said as much on FB’s latest earnings call, and both we and other FBX partners are seeing so much demand that our revenues are growing by high double digits on a monthly basis. Case in point – one of Dotomi’s ten biggest customers just signed onto FBX yesterday; I won’t say who just yet, but get your Ghostery ready…
    [More FBX-fueled growth data here: ]
    [FB’s head of sales saying growth is & will forever more be huge, globally: ]

    “it’s too early to tell whether the conversion rates go up enough.” – No, it’s not. One need only look at FBX conversion data we & others have put out over the past six months to know beyond any doubt that FBX fundamentally converts better than any other display inventory. Details here:

    Here’s the reality: Valueclick acquired Dotomi because Dotomi proved itself good at turning data into better display ads that are worth more to advertisers. Valueclick wants Dotomi to make *its own* inventory worth more, and that’s their near-term focus. Making FB’s inventory worth more? That’s a discussion they’re gonna avoid having with their customers, at least until we and other FBX-ready firms launch enough of their customers onto FBX that they start to hear & feel the sucking sound of incremental budgets going to FBX.

    Kudos to Valueclick for buying a performance display firm and using it to improve their inventory monetization. But Mr. Giuliani, the FBX F.U.D. is a D.U.D.

  2. Chris makes a good underlying point essentially, that we’ll all act in our own self-interest and cheerlead the things we have solutions for, while diminishing those we don’t, or don’t yet. I’d add to Chris’ points that buying FBX falls between agency or client groups sometimes (which certainly doesn’t seem like it would be the reason for tepid interest here). We have seen cases where a company works with a DSP for display retargeting using IAB units, then has them actually build FB ad units so they can run FBX (often in arbitrage mode); and a totally separate group is doing regular Facebook ads, sometimes for direct response and sometimes for fan building (and often both – sometimes from different groups again!). It’s a messy landscape today where social is involved.

    To my earlier point about cheerleading what you have a solution for, I am not different. We believe that since the creative is the same and the underlying platform is the same (even though the plumbing is not), one tool can do the best job of optimizing all Facebook ads you might have, retargeting or not. Optimal launched the first platform that is a single way to buy both FBX and all native FB ad types (including Premium), and in addition is 100% transparent mainly because you can just attach an existing Facebook ads account you own to our system and then see precisely what media costs are vs. our (modest) % of spend fee. It’s just a better experience, I think being able to run all these Facebook ads in one platform: