AppNexus president: Programmatic ad exchanges collaborations are the future

President of programmatic advertising technology company says launch of APEX from Fairfax and Mi9 signals independent media owners are fighting back against Silicon Valley giants like Google and Facebook

Michael Rubenstein
Michael Rubenstein

Programmatic ad exchange collaborations like the new APEX offering from Fairfax and Mi9 will give independent media publishers the might to fight against Silicon Valley platform giants endeavouring to own the digital advertising and content distribution space.

That’s the view of Michael Rubenstein, president of programmatic ad tech platform provider, AppNexus, who caught up with CMO during a visit to launch the new Australian Premium Advertising Exchange (APEX).

APEX is a new premium publisher, mobile programmatic marketplace launched today via a joint venture between Australian media giants, Mi9 and Fairfax. It includes inventory from both companies, as well as Daily Mail Australia, and is being is powered by the AppNexus platform. The exchange will offer media buyers premium mobile inventory and real-time bidding (RTB) across more than 120 mobile sites and apps. All inventory only runs alongside top-tier premium content.

Rubenstein described APEX as a sign of independent in-market media companies striving to provide a viable digital advertising alternative to Silicon Valley platform giants such as Google and Facebook, by pooling their scale and data.

“We’re seeing those that may have seen themselves as adversaries now viewing themselves as allies,” he commented. “They’re coming together to bring scale and mount a credible alternative to what Silicon Valley platform giants offers.

“What companies like Fairfax and Mi9 are doing is very forward thinking. They’re looking to the future and realising they have a shared interest in creating an Australian media entity that can compete at scale with those coming in from Silicon Valley.”

Rubenstein said brands and marketers should be encouraged by having more options in the market.

“Advertisers also benefit from having a healthy local media and content creation ecosystem,” he said. “But it’s not an either/or – the two need to coexist. What we’ve seen in recent years is Silicon Valley being the aggressor. But what entities like APEX signals is that local companies are fighting back with something that’s compelling.

“The industry is changing so much, we’re trying to find the new balance point between local creators and global distribution networks.”

It’s not just media owners that are competing with Google. AppNexus is positioning itself as the independent alternative to Google in the programmatic ad space with a full suite of technology solutions for publishers, agencies and brands. Rubenstein claimed the company was had built the world’s only “full stack publishing yield management system outside of what Google offers”.

“Google is absolutely a competitor for us,” he said. “There’s no question that today, when we speak to potential clients, the single greatest fear they have is having an overreliance on a partnership with Google. Silicon Valley giants are upending the economics of traditional media and businesses and competing aggressively against these companies.

“For companies like Google and Facebook to also be providers of ad tech is a Trojan horse strategy to bring companies closer to their companies into their orbit and help them grow larger, more lucrative platforms. Our message resonates well with companies interested in neutrality and independence.”

The rise and rise of programmatic

Programmatic ad trading might feel like a fresh phenomenon, but according to Rubenstein, it’s taken eight years to reach a tipping point, leaping outside the traditional boundaries of hard to sell, remnant inventory, and becoming the mainstream was of buying and selling digital advertising. Today, third-party sources show 50 per cent of ad sales in most mature markets globally are being traded programmatically, he said.

In fact, Rubenstein believed the term ‘programmatic’ could soon become irrelevant as digital advertising rapidly moves into an all data, automation-driven age.

“It’s not unusual for a publisher’s most premium inventory to be traded programmatically. And the largest brands and agencies are focusing on driving innovation through programmatic. That is one major trend that at this point, is inevitable,” he said. “It’s gone so far, that even the term ‘programmatic’ will soon become irrelevant.”

Rubenstein pointed to an ever-expanding array of tools and techniques impacting the buying and selling of digital advertising, such as real-time bidding auctions, to “automated guaranteed” inventory, an area AppNexus is investing in and one which impacts the traditional way of buying and selling forward deals.

“Within the next few years, we’ll stop talking about programmatic and realise the way advertising is bought and sold has been profoundly impacted by technology,” Rubenstein said. “This will change the industry and the way people do their jobs as well.

One of the concerns media companies have had around programmatic to date is lowering pricing across digital ad inventory. In response, Rubenstein said ad rates in programmatic have been rising sequentially on a year-on-year basis, closing the gap between traditional methods of buying and selling ads, and programmatic advertising.

“The second thing is that buyers and sellers are both able to leverage lots of data and yield management techniques to ensure that they can get what they want and do it at rates that protect their business,” he said.

An area of programmatic buying and selling that remains controversial, however, is transparency and control around ad placement, viewability and the potential impact on brand reputation of ads popping up in the wrong context. Rubenstein agreed there are several challenges still to overcome, and pointed to AppNexus’ significant investment in this area this year.

In June, vendor unveiled a variety of ‘inventory quality’ measures and introduced tools and programs that require all ads to meet strict creative and topical criteria. These are designed to help ensure any questionable activity, for example, doesn’t appear on the platform, Rubenstein said.

“We rolled out a program this year so that advertisers don’t pay for ads that are tagged as being potentially fraudulent or questionable quality,” he added.

“Ensuring that advertisers have the capability to validate using our technology or a partner’s technology via an audit of the trail has been something we have also invested heavily in. We also acquired a viewability company, Alenty, last year. We want to operate the cleanest and well lit marketplace in the industry.”

Ad tech firms have a responsibility to advertisers to lift their game, Rubenstein continued, and ensure buyers have full transparency into what they pay, where ads are viewed and the context of placing ads.

“The industry is on track to address that in the next year or two. Challenges remain but there has been fantastic progress,” he claimed. “It’s the responsibility of the marketplaces and technology providers to do this. It’s also the responsibility of the industry to also set standards whereby we can have a level of transparency, insight and common language around these problems. So there’s shared responsibility there.”

AppNexus plans

For its own part, AppNexus is striving to shore up its position in the ad tech space via organic investment and acquisitions. Rubenstein pointed to the recent acquisitions of Open AdStream and YieldEx as bringing in an array of capabilities for publishers.

“At the same time, we’ve built our own video buying platform, which rolled out recently. We also rolled out AppNexus Programmable Bidder – buyers to use data science to develop their own algorithms to drive programmatic buying,” he said. “This is the future on the buy side.

“Advertising and agencies have started to experiment with data-driven buying through programmatic. The development of custom algorithms using data science talent starting to emerge in these organisations, and to fulfil the promise of algorithmic buying in real-time, is exciting.

“It’s happening today in financial services stocks are trading using algorithms and data science. We’re going to see the same thing happen in digital advertising. It will change the way CMOs think about the people they need to operate effectively in the new digital ad space from an employee and a partner perspective.”

Other key priorities for AppNexus are to continue to provide more operating system technology for major publishers, brands and agency partners, Rubenstein said.

“Digital advertising is growing strongly and programmatic is the fastest growing part of it. I see a bright future for digital advertising,” he added. “The question is: Who will capture the value? Will it be publishers locally, or will it flow out of the country to the likes of Google and Facebook? Will the economics for creating high quality, local, premium content be captured locally by the creators, or by the platforms - the distributors.

“That is the key question right now.”

More on programmatic's rise

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