When Gawker Media first started selling ads programmatically in late 2014, it only sold through private marketplaces (PMPs).
Since then, the publisher behind Gawker, Jezebel, Lifehacker, Gizmodo and other sites has expanded its programmatic offerings. First it added an open marketplace option and then it implemented header bidding. Programmatic revenue has grown by triple-digit percentages over the past two years.
Using private marketplaces as a foundation to expand its programmatic business was a critical strategic decision, said Eyal Ebel, VP of programmatic at Gawker Media.
In 2014, Gawker wanted to serve clients who preferred to transact programmatically but didn’t want to hurt its direct sales business. Gawker also didn’t want to subject users to low-quality ads from open exchanges.
“I’m very concerned with protecting the direct sales side of the business, and not cannibalizing it,” said Ebel, who started out in direct sales. “We are always going to cater to the direct business.”
The private-marketplace approach credited direct salespeople for programmatic deals they brought in. By paying commission on private-marketplace deals, programmatic could grow while avoiding channel conflict and back-office politics.
In the marketplace, Gawker’s PMP-only offering reinforced Gawker’s reputation as a premium publisher.
“Everyone calls themselves premium, but what does that mean?” Ebel said. “When buyers asked, ‘Why would I buy you via a private marketplace when I can buy you in the open exchange?’ we would say, ‘You can’t buy us in open [exchanges].”
After testing the waters in private marketplaces, Gawker decided to add in the open exchange this year.
“The open exchange is much more sophisticated in 2016 than it was in 2014, and we can do it effectively without alienating our users or compromising ad quality,” Ebel said.
Plus, the decision acknowledged a reality: Private marketplaces are difficult to set up and scale.
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“Something like 80% all programmatic is open exchange,” Ebel said. “But we believe that as buyers get more sophisticated there will be a natural momentum toward private marketplaces.”
In the interim, that means embracing the open exchange as well as focusing on making the set-up of private marketplaces as easy as possible for clients.
“Buyers have a team of four executing 100 deal IDs across 25 publishers, working out all the kinks and then starting to parse data,” Ebel said. “We tell our clients that they should rely on us to do the heavy lifting,” although demand-side platforms and supply-side platforms also need to share the burden.
To give its private marketplace clients the highest priority, Gawker Media introduced header bidding with rules that favor private deals over open-exchange deals. If an open-marketplace buyer bids higher than a Gawker PMP buyer, the private buyer with the lower bid wins.
“I had no interest in header bidding if I couldn’t prioritize the private marketplaces,” Ebel said. “For me, header bidding is a way to make my programmatic offering more sophisticated and remove barriers to success.”
That said, its header-bidding technology is still not fully deployed and the process is “wrought with complications and very, very difficult,” Ebel said. It’s also difficult to ensure that header bidding won’t take impressions away from a direct-sold campaign.
“Unless you are doing daily impression caps on the programmatic ecosystem, which is hard to manage on the back end, there is no guarantee that the direct side of the business will deliver,” Ebel said.
Header bidding requires constant monitoring not only to make sure it works, but to make sure it doesn’t work so well that it jeopardizes Gawker’s direct buyers.
Besides working on Gawker’s header-bidding implementations this year, Ebel hopes for greater traction in automated guaranteed. Gawker worked with iSocket before it was purchased by Rubicon, and it sees opportunity in deals that bring in buyer data – from ingesting cookie pools, for example – so the campaign can deliver to those users.
But he doesn’t look too far ahead.
That’s not because the fate of Gawker Media hangs in the balance while it appeals the $140 million in damages awarded to Hulk Hogan in a Florida lawsuit (“Business as usual. We are extremely confident in the appeals process,” Ebel said).
Rather, in this space, you can’t.
“If you play three years out, you aren’t going to see header bidding coming, you aren’t going to see server-to-sever coming,” Ebel said. “Every publisher, every advertiser, whether they want to admit it or not, is making it up as they go along.”
