MIXX and the Changing Landscape
The Changing Landscape
Industry deals among, Google and DoubleClick, Microsoft and aQuantive, Yahoo! and Right Media and WPP and 24/7 have created much speculation about the future landscape of our industry. For the first time ever on one stage, here from the CEO’s at all the acquired companies as they discuss the impact of their individual deals and the cumulative effect on data analysis, the competition for leveragable marketing insights and achieving media optimization. This session will help define the future of interactive media and is a must attend for all industry participants.
Moderator:
Saul Hansell, Editor, New York Times
Panelists:
David Moore, Chairman & CEO, 24/7 Real Media
David Rosenblatt, CEO, DoubleClick (not yet approved in EU, so limited in somethings he could say)
Karl Siebrecht, President, Atlas
Michael Walrath, Founder and CEO, Right Media
SH: so what does this all mean? what am I going to get?
MW: our vision for the industry was similar to yahoo. we did not have the traffic, the search business. we had a set of tools and services for advertisers to access more value. what we will see over the next few years an environment that allows people to do more with their businesses. A combination of liquidity to the tools like yahoo can bring - more ads, better insight and better capabilities
DM: WPP does business with 497 out of Fortune 500 advertisers, we have unique access we can deliver products that do a better job of targeting audiences.
RC: this may imply an advantage, a preferred digital media agency, better to control what is going on then putting the business in the hands of the tech companies but keeping it on an advertising group
SH: so you can give better targeting? why you instead of the others?
DM: as an advertiser you want best RIO, if we can offer this it will grow both better
KS: more innovating and faster. combine great tech prowess and great digital marketing experience. the problems are becoming more interesting and challenging. the marriage will deliver innovation. like emerging media - mobile, gaming, TV, IP web based. we have a set of customers that have in interest in doing more acquisition . also on measurement, a lot of development and see it accelerating more and more.
DR: liquidity is important….advertisers may think biggest challenge is absence of standards, inability to target at the scale to make it economically, want lower prices. with all the deals, you end up with 4-5 large pools, that allows for the problems to be solved, same way large stock exchanges does it. Google is well suited do that.
RC: this ties in with what 24/7 said the other day at the Digiticity Conference - the increased aggregation will push the smaler businesses out; scale improves the ability to advertise in a mass form but there may be a lack of competition and choice. Despite the calls of many that niche is best, there will still be a role for mass channels within a total marketing strategy.
SH: in general many of the same attributes that have made search a popular media will be applied to display. standards, aggregation of data, self serve, can do all in conjunction with search instead of independent. will benefit publishers.
DR: competition and data question are different. Customers own their own data, we cannot use it. Unlikely that any M&A activity will change that. For competition, you have 4-5 companies, have half trillion dollars who are focused on this market. there are low switching costs to what we do, so will this deal make the market less competitive? don’t believe that. (this was in reaction to an aside discussion about whether the other parties beleived that the Google deal should go through)
SH: Google are offering these services for ‘free’ what used to be charged for. Is Google giving away ad serving for free?
DR: you have to ask them
SH: does ad serving become the free giveaway that supplements other activity
DR: DoubleClick not in media business so not a position we can comment on or do
MW: ad serving is a commodity, the value that can be offered is around that. pricing of ad server, a lot of talk, that Google may be offering free ad serving for participants in their networks. most people are savvy enough to recognise free vs free when bundled. there will still be an expense
DM: the issue is more of neutrality. Doubleclick positioned themselves as Switzerland and that will be hard to continue talk about concentration, then Google is the new Microsoft, with Microsoft becoming the nice guys, which is a change. the issue is that neutrality is getting harder to find?
SH: in your business, with high margins? are you going to have to find new bundles?
DM: ad serving is a commodity, it really is the value ad. look at analytics..Google give away, had little effect. if you give serving away there is a quid pro quo for what you get for it and you have to wait and see what you get
KS: from the nice guy on the end, its not about the serving it’s about the total service. Tools for managing search are free, but Google are still making money and are still being compensated for their tools, services
SH: 3 of 4 on this panel are putting effort into an ad exchange. 1 person works with an ad agency. lets discuss why an advertiser cares about an exchange? what are they going to get?
DR: DoubleClick is a big believer of long term value of exchanges. For a given publisher each has part of inventory that is premium and another part of inventory is less premium that they would be willing to outsource to others. where the line is not clear. what publishers care about is yield and exchanges are a great way.
SH: why exchange?
DR:.the more you aggregate demand, the more efficient and the higher prices.
SH:L assumes that one wins.
DR: we are along way from worrying about that, looking at improving model, managing cust.buyer behaviour
MW: the line btw premium and non-premium..there was a time when people said ebay would never sell anything of real value. it’s ultimately up to buyers and sellers to sort out who and what. exchange will enable them to act in best interests. you can work with networks through and exchange that provides transparency etc; you’ll have more transparency about where ads are showing, in general tracking about how it is working. you can utilise by-products to do better marketing. there’s a lot of info ins systems that do not make a good job of making actionable data. Look at the yield curve, sorting out the good stuff is better with more data
KS: we see a vibrant ecosystem, the advertising exchanges are not the marketplace but are part of the ecosystem. the important characteristics are openness and transparency. we see customers asking the diff between exchange and ad network. think about how the businesses make money. networks - buy low and sell high. make money through arbitrage. an exchange enables the transaction across the board.
DM: I think there is a role for exchanges in this industry. but think about how the stock market evolved. there were a lot of exchanges and plenty of consolidations. look at premium vs non-premum. nonprem is inventory you do not know the audience is. is an exchange supposed to be a neutral palace and these are all owned by media companies. so hard for me to imagine that they are not independent and they look to sell more of their own inventory. you need more demand than exists to auction off inventory. if they make it easier to buy overall, that is good for all as there is still too much manual labour involved in placing an online campaign. there’s a lot of innovation to come.
RC: I love his comment about non-premium content being just stuff you do not know the audience for. Target the content will, get more granular in niche/behvavioural targeting, understanding the audience and this inventory can be premium to someone.
ASH : way exchange work with an imbalance - too much inventory and not enough buyers.
DR: inventory has a value and we believe that exchanges are the right form. a market place becomes helpful when there is the imbalance.
SH: conflict of interest? structure is if a proprietary trading desk in the exchange? why trust that the parent will not spin it slightly to its favour?
MW: transparency and accountability,. it’s going to be obvious if you are doing stuff. everything is tracked, so you can follow it
DM: i would say the same thing if I was Mike….
RC: there were a few questions, but as is often the case, the answers are often a lot less easy to take down. This was an interesting panel about something I know little about; I know you need to do it for some products and campaigns but the details are something that so far I’ve not had to get into.
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