LucidMedia Joins The Demand-Side Platform Race; Announces ADvisor DSP

LucidMedia Has A DSPThe demand-side platform (DSP) leaderboard just added another competitor as LucidMedia says publicly for the first time that it, too, has a DSP solution – in fact, they’ve had it for over a year now according to the company.

With more details on the way in the coming weeks, LucidMedia CEO Ajay Sravanapudi discussed demand-side platforms, LucidMedia’s solution as well as the platform’s real-time bidding (RTB) capabilities. What are the “must haves” for a DSP and why?

AS: The key “must haves” for a large agency looking to deploy a successful demand-side platform (DSP) initiative are: multi-source real-time bidding (RTB) integration and scale, an advanced ad server, audience and contextual targeting, universal frequency capping, detailed reporting with discrepancy management and reconciliation, brand safe filtering, smart bidding strategies, the ability to leverage 3rd party targeting data, and managed services.

Properly integrated real-time bidding is not standardized or modularized. There is still a great deal of heavy lifting development needed to bring on each inventory source, balance the volume, and bid effectively. A good DSP needs to solve these problems. Smart bidding strategies are also critical. The DSP model promises that agencies can claim a larger slice of the ad spend dollar but, without intelligent and flexible bidding, that slice may not be fully realized. Agencies should look for RTB solutions efficient enough to drive bid costs below $0.001.

The concept of an agency-side buying and management platform relies heavily on managed services at the inception of any in-house DSP program. The current transitional period is favoring the managed service approach to demand-side platforms as agencies step into the traditional ad network role. Agencies are finding the networks played a large role in accepting the media risk and owning the optimization of a campaign. As agencies become buy-side networks they sometimes find they need additional campaign execution talent, potentially offsetting the efficiencies that drove them to the DSP model in the first place. Managed services allow the transition and knowledge transfer to happen in the most effective manner. What about the LucidMedia solution… how will your DSP differentiate from the current entrants in the space?

Our experience and technology are our biggest differentiators. It is no secret that LucidMedia offers some of the most robust contextual targeting in the marketplace, but what we have been able to achieve with our platform in the last couple of years has not been widely publicized. Late in 2008 we began engaging with all of the large aggregators to co-develop real-time bidding solutions. We next developed an advanced new breed of proprietary ad server, where changes rollout in seconds instead of hours, giving us one of the most nimble systems available for trafficking campaigns. We also built a unified inventory management system that could dispense with the complexity of continually hard-wiring campaigns to the best possible inventory source. We included an automated optimization engine that could evaluate thousands of campaign facets in real-time, predict performance, and govern campaign targeting based on client goals. In January of 2009 we deployed the platform internally, effectively making it the first production RTB-enabled demand-side platform. Named ADvisor DSP, it has since been proven with over 10 billion impressions and hundreds of successful campaigns which makes us one of the most experienced DSP providers.

We are unique from a technological standpoint as well. Obviously a good DSP starts with an advanced ad sever. While core ad serving capabilities like frequency capping, day parting, and targeting are minimum requirements and basic ad servers like DART or Atlas are good at providing these features, the savvy agency needs more holistic campaign management. Our proprietary ad server was built from scratch to support critical DSP features like universal frequency capping, robust auditing, brand-safe filtering, and hyper-targeting to pages and users. Discrepancy management and reconciliation, Atlas Universal Action Tag (UAT) compliance, and intrinsic support for the new breed of engaging rich media solutions from companies like EyeWonder, PointRoll, and Oggi Finogi are also supported in our ad server. Agencies should look closely at how risk factors such as discrepancies and click fraud are handled and evaluate the reconciliation process available within the system.

Scalability is another key differentiator. ADvisor plugs into all the large repositories like Yahoo RightMedia, Google Ad Exchange, AOL, and AdBrite as well as the aggregators like Adify, AdMeld, and OpenX, plus the supply-side optimizers like Rubicon Project and PubMatic, giving it an unprecedented 45 billion impression potential and 95% reach into the online population. This kind of scale and broad reach are obvious requirements for large direct response or branding promotions. But it is also required to deliver narrowly targeted campaigns where massive reach is needed to scale niche segments and deliver the correct volume to a specific demographic. In general, how do feel the inventory sources will break-out for the LucidMedia DSP?

We see the vast majority of the media flowing through our DSP solution will come in via RTB sources. While the need for direct publisher buys or network inventory may always exist, RTB is the future and is by far the most efficient way to acquire media at scale. To understand this you have to look at the larger trends in the industry. 2010 is already shaping up to be the year of RTB-enabled DSPs. The availability of real-time bid access into the major ad exchanges is converging with an industry-wide preference for agency-administered ad-buying and ad-trafficking platforms. The traditional ad network model achieved many things but has yet to deliver on the promise of truly cost-effective scale. The rules of engagement changed when downward-spiraling CPM prices forced publishers grudgingly onto the emerging exchanges to improve their yield and backfill diminishing ad revenues. The networks had to follow their publishers and a new aggregated sourcing model emerged.

Real-time bidding is the hot feature this year and a staple of the effective DSP. Now the combined capabilities of RTB and DSP built on the exchange model are replacing traditional ad networks with a new paradigm that is more nimble, more economical, and more in touch with advertiser goals. Control is subsequently moving closer to the advertiser, intermediation is being reduced, and prices are arriving at a true market-driven equilibrium. Not only do advertisers have more control over targeting, performance, and safety, but buying has become more centralized and access to inventory has become more streamlined. That’s really the promise of the demand-side platform with real-time bidding.

By John Ebbert

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