Bill Swanson talks about the state of subscription-based technology buying.
My role and my team
I’m responsible for developing and growing our portfolio of premium publishers and media buyer partners across EMEA. I work closely with the regional heads in the UK, Benelux, Central, Southern and Northern regions to ensure our offering remains relevant and specific for the market. The teams that work for me are Customer Success (publisher focussed account management), Advertiser Solutions (teams focused on relationships and spend from the buy-side of the market), and Solutions Engineers (working on integration and pre-sales of our numerous tech products).
I report to the US (my boss is the founder of the business) so much of my work is to make sure that we stay aligned with the US while ensuring the EMEA point of view is taken into account. Having worked on the publisher side for The Independent and News UK, I’m well aware of the pressures they are under so can focus on helping them with solutions that will address their business needs.
The state of subscription-based technology buying
This is an emerging area for the ad tech industry, borrowing from the traditional Software-as-a-Service concept to create a Platform-as-a-Service (PaaS) model. The growth of programmatic has driven the need for publishers to integrate more technology, impacting on their infrastructure costs.
Traditional revenue share models make predicting costs difficult. Also, as programmatic revenue has become a larger share of a publisher’s overall budgets we are seeing that the C-suite is now far more engaged in their monetization partners.
For Europe, GDPR has meant businesses have had to make changes, to address the regulation. Some businesses have decided these are too onerous and have actually stopped serving European traffic.
They are quickly understanding that whilst SSPs started off as pure monetization they are now a key part of their overall technology stack and can add great benefit to the control of their assets. By gaining access to our technology for a fee, rather than paying a percentage of revenue, publishers can gain greater control over how they operate and streamline their approaches to doing business. It also brings more transparency and simplifies doing business, both of which are being demanded in today’s ad tech environment.
The major challenges in the European programmatic landscape
The major challenges in Europe reflect the major industry challenges globally. A key one is developing an environment where brands are happy to invest more in programmatic. Attracting brand dollars into programmatic offers a huge opportunity for the industry.
However, the well-documented concerns of marketing leaders at some of the world’s biggest brands around fraud and a lack of transparency have meant we, as an industry, are having to rebuild trust to ensure programmatic can reach its full potential. A raft of developments has taken place in the last 12 months. This includes the IAB’s ads.txt initiative to help ad buyers avoid spoofed inventory, deliver greater transparency and tackle issues around fraud. These changes are a sign of how the industry is maturing by taking steps to grow confidence in programmatic.
For Europe, GDPR has meant businesses have had to make changes, to address the regulation. Some businesses have decided these are too onerous and have actually stopped serving European traffic. It’s early days for GDPR and the industry is still playing something of a waiting game to find out how regulatory authorities will interpret some areas of the legislation.
Ultimately the industry has had a trust issue and it is up to all players to ensure they are working with a transparent business model. PubMatic continues to push for transparency and this will help brands to spend their money in a safe, secure and efficient environment. Quality demand is looking for quality supply and programmatic technology should allow this to happen: we are keen to be at the forefront of driving this.
Tackling issues around transparency in Europe
We’ve been making a host of changes to develop a more transparent business. For example, we’ve abolished buyer-side fees. This simplifies our pricing model and brings greater transparency and visibility into how fees are taken. As well as bringing transparency, it encourages buyers to bid more actively, which benefits publishers.
Our launch of PubMatic Cloud, a PaaS model, again is bringing more simplicity and transparency in to the market, allowing publishers to have more certainty in their planning. In line with the market, we have helped the transition to first price auction for the trading of online advertising. This is seen as a more transparent model compared to the traditional second price approach. In addition, we’ve been taking a raft of steps to focus on improving inventory quality as this goes hand in hand with the push for a more transparent marketplace.
Tackling malicious creatives
Fraud is at the forefront of our clients’ minds, so it is a very important concern for us. We are constantly trying to stay ahead of the market, but it takes both the buy and sell side to ensure that they are putting measures in place to take on the fraudsters.
We take multiple steps to address this issue. We have a dedicated ad quality ops team that monitors ad quality alerts so immediate action can be taken to block unwanted creatives. We have partnered with industry leading ad quality enterprises like The Media Trust and Confiant. Their solutions scan tags and creatives, providing the alerts to our team to enable appropriate and timely action.
PubMatic has also developed a real-time, automated solution to track every creative entering in our platform. This scans for malicious creatives and also redirects auto audio and videos plus in-banner videos (IBVs) to provide improved ad quality for clients.
Complying with GDPR
We’ve implemented a raft of changes relating to GDPR compliance. We are heavily involved with industry bodies, including IAB UK, IAB Europe IAB Tech Lab and Network Advertising Initiative (NAI) to help address GDPR and other EU privacy items and initiatives. We are also part of the IAB Global Vendor List and support the IAB consent framework.
In connection with data retention, we have implemented a schedule across all our systems so that we routinely delete or anonymize data we do not need. We have also been carrying out data minimization, establishing mechanisms to collect only data that is needed and pseudonymizing such data wherever possible, such as, masking geolocation data for EEA end users.
From a client perspective, the key element is around consent and how to collect consent. This is often via a third-party Consent Management Provider (CMP). If our clients have consent we can serve a targeted ad, but if a CMP signal does not include required consent we would serve a contextual ad, based on the content the user is browsing on a site.
Working with AI/Machine Learning sell-side platform for an open digital media future
Machine learning plays a key role in what we do. There are a number of initiatives we are currently working utilizing machine learning. One is around automating the operationally intensive task of classifying ads to ensure creatives are what they say they are.
Our solution is about removing human error and is helping reduce the operational cost of manually doing this by up to 70%. Lifetime value optimization is another area we are using machine learning to help publishers. There are times a user is on a site when it may be more valuable for a publisher to highlight relevant content, based on what the user is currently reading, rather than serve a low-value ad.
This can maximize the user’s time on the site, enhance the user’s experience and provide other opportunities to show more high-value advertising as the user engages with the additional content. This is all driven by machine learning. It’s also been used to help drive bidding strategies and address issues about minimizing low-value traffic to curb infrastructure costs.
The way forward
As well as focusing on automation to improve our clients’ ease of use, we’re looking to develop our offering to support the future needs of digital advertising. In-app and video are important to ensure we’re offering the solutions relevant to where the market is going. We’re also focusing on continuing to raise inventory quality across our platform in response to demands from brands.
Our roadmap includes growth in existing technology, such as header bidding for more channels. We are investing in partnerships that help ensure our ad and inventory quality while developing automated tools to improve our clients’ ease of use. We are also continuing to innovate to support the future needs of digital advertising.
Thank You, Bill. We hope to see you again at MTS, soon.