Thought Leadership
AppNexus on the Destiny of the Internet, and Advertising

alex-chatfield-appnexus

Alex Chatfield
Senior Director, Client Advisory
AppNexus

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AppNexus is one of the most coveted companies in digital advertising, powering the monetization for many of the world’s top publishers. The company has also recently launched your entire suite of buy-side tools with a programmable bidder. Can you share more on your role as Senior Director, Client Advisory at AppNexus and what it entails?

AppNexus has organized into two business units: Advertiser Technology Group (ATG) and Publisher Technology Group (PTG).  ATG is focused on building world-class buying tools for advertisers, agencies, and trading desks while PTG is focused on building a full-stack publisher suite to compete with Google’s DoubleClick for Publishers (DFP).  My team is part of the ATG business unit and owns the commercial relationship with all of our existing accounts.  The primary mission of Client Advisory at AppNexus is to drive product adoption and client success.  Recently, I’ve also been leading business development efforts for our new programmable products.

 

I think most people are familiar with AppNexus for its ad exchange, and now premium publisher tools through its acquisition of Yieldex. However, many in the industry know that AppNexus is one of the only independent players with a true end-to-end stack for the entire digital advertising ecosystem. Can you share more on the entire array of AppNexus products for the audience?

This is a great question and something that comes up a lot in our new business conversations.  On the media buying side, AppNexus’ core product is our omni-channel DSP.  Our DSP is plugged into all of the major programmatic supply sources globally with datacenters in AMS, EMEA, and APAC.  We listen to over 120B impression requests/day across display, mobile, video, native, and audio.  Our DSP product is built on open, enterprise APIs, so clients are able to easily build on top of it.  Recently, we’ve rolled out some new APIs that enable clients to plug in their own optimization algorithms, allowing them to build custom algorithms for each of their campaigns and improve on those algorithms by leveraging real-time test-and-learn iterations to find the right combination of bidding, creative, and data. 

Through the acquisition of Alenty, we offer a suite of MRC accredited viewability tools (reporting, targeting, viewable deals marketplace).  From a data perspective, we offer robust log level data delivered daily, hourly, or instantly via a stream. In terms of ingesting data, we offer three different ways to upload data: client-side, server-side batched, and server-side streamed.  We recently released a Data Marketplace product that makes it seamless for our buyers to purchase second and third party data.  For creative hosting, we offer an array of solutions for each media channel. Finally, we have invested an incredible amount in giving our buyers confidence in the quality of the media that they’re purchasing by deploying domain detection technology both pre-bid and post-bid, and, in partnership with IAS and DoubleVerify, offer a spend protection program that ensures buyers do not pay for impressions for non-human traffic or from misrepresented domains.

On the media selling side, AppNexus’ core product is the AppNexus Publisher Suite, which includes our omni-channel adserver, SSP, Yieldex Forecasting and Analytics, and Audience Extension DSP.  AppNexus helps many of the world’s top publishers fully monetize their content through our integrated ad serving and programmatic selling solutions.  Our SSP is integrated with all of the major programmatic buyers globally.  Similar to our DSP product, our SSP product is built on open, enterprise APIs, so clients are able to easily build on top of it.  With the acquisition of Yieldex, we offer our publishers best-in-class forecasting and analytics, so they’re able to maximize their direct sales channel.  Our header bidding technology for desktop and mobile helps publishers and app developers that haven’t adopted our ad server to monetize their content. Other notable features on the media selling side include our creative audit, creative quality controls, yield management controls, and inventory packages marketplace.

AppNexus is the only independent end-to-end technology provider that can combine the power of a programmable buy-side solution with a unified, full-stack publisher monetization solution.  This combined solution provides cookie and device match rates that pure play DSPs cannot match.

 

There has been a huge boon in the adoption of programmatic advertising by marketers all over the world, much due to the efficiency, scale, and reporting consolidation it provides to marketers. How do you see programmatic evolving over the next few years?

Our CEO, Brian O’Kelley, recently authored a post for Forbes magazine titled “Programmatic Is Dead, Long Live The Programmable Age”.  Our point of view is that the programmatic era will evolve into the programmable era.  Programmatic advertising has enabled marketers to purchase media in real-time at scale with some basic targeting and optimization.  As we move into the programmable era, I expect to see marketers employ sophisticated algorithms to make extremely smart decisions about when, where, and what to advertise to individual customers (both current and prospective).  The massive efficiencies that programmatic has brought to marketing will improve as marketing becomes programmable. 

AppNexus’ new programmable bidder is making this new era possible.

 

Are there any innovations happening right now with the use of data in programmatic campaigns that excite you the most?

I’m most excited about our new programmable innovations that enable buyers to modify their bid price in real-time based on user level data.  Historically, the sophisticated media buyer might have segmented their audiences into high, medium, and low-value user buckets, adjusting their bid price for each bucket and updating their audiences on a daily, weekly, or monthly basis.  With our new programmable bidder, the average buyer can modify their bid price for every individual user and make changes in real-time to both the targeted users and the specific values associated with each user in real-time.  For instance, we all know that not every “auto-intender” is created equally.  One user might have been placed into that segment after one visit to a car-related website while another user was placed into that segment after visiting twenty car websites.  Our programmable innovations enable buyers to differentiate between those users and update their bid prices in real-time.

 

How do you think this whole ad blocking issue will play out? What do you think will be the effects of ad blocking on inventory that is purchased programmatically?

In the absence of advertising, all online content that depends on monetization will either disappear behind a paywall or disappear completely, so the stakes are high. No one knows for sure how this is going to play out, but some publishers and content producers may lose a great deal.

But advertisers only pay for digital ads that have been served – meaning, no money changes hands until the ad appears on your desktop or mobile device. If one impression is blocked, advertisers will find another impression against which to serve the same ad – often, in real time. So some, if not most, of the “blocked” spend won’t be lost to the ecosystem, per se, but rather, redirected. Moreover, if ad blocking reduces the volume of available digital impressions, the law of supply and demand theoretically dictates that advertisers will have to pay more for available inventory, potentially resulting in more revenue for some publishers. 

Regardless of how the economics play out, ad blockers are a natural reaction to several real challenges that consumers face. Ad tech professionals need to address problems like latency, weight, and creative standards and improve the user experience.

 

What are your thoughts on new innovations like header bidding, and its impact on publisher yield?

Header bidding is a workaround solution most commonly used by publishers who rely on Google’s DoubleClick For Publishers (DFP) for ad management.  Unlike other ad servers, DFP does not enable publishers to draw RTB demand directly from multiple sources. It only allows bids from AdX to compete against deals and guaranteed inventory. Google may argue that most demand sources already integrate with AdX, but AdX is a classic black box. Publishers don’t know whether its auction logic privileges certain demand sources over others. Moreover, there is a cost associated with using AdX as an intermediary – that’s money that should go to the publisher.

Even with the introduction of their EBDA solution, it is unclear that Google will allow publishers to work directly with their chosen demand partners and enable a fully transparent solution. 

Our commitment is to helping publishers realize the best market price for their inventory. As a result, we fully support header bidding, the best solution for publishers currently working with DFP. We know it works based on the strength of multiple case studies.

 

To the extent that you can share, how does the AppNexus ‘Programmable Bidder’ or ‘Bring Your Own Algorithm’ work?

If you break apart a bidder into its component parts, you quickly realize that 90% of a bidder is a commodity.  Every major DSP has built basically the same functionality around targeting, reporting, supply integrations, etc.  What’s actually unique about a bidder is its bidding algorithm, its data, and its creative decisioning.  These are the components that AppNexus enables its buyers to program.  By providing open APIs and a scaled infrastructure, buyers can bring their differentiated assets to market without sinking tremendous resources and focus into reinventing the wheel.  Think of it as having all of the customization and functionality of your own bidder but without the underlying infrastructure costs.

 

Lastly, what is your take on the future of programmatic advertising, from both the buy and sell-side?

If the objective of ad tech is to streamline and simplify the process by which digital inventory is bought and sold, then the status quo is decidedly unsatisfying. Nobody can say for sure how the industry will evolve, but from a technology perspective, I expect winners and losers to emerge, point solutions to be absorbed by a small number of mega platforms, and much of this complexity, friction, and latency to fade away.  From the sell-side, there will likely be two or three full-stack publisher adservers.  The integration of programmatic selling capabilities into the publisher adserver should replace the need for stand-alone SSPs and header bidding.  The end result for publishers is higher yield and increased efficiency. From the buy-side, I expect to see programmatic advertising to transform into programmable advertising.  In this scenario, black-box DSPs are going to come under extreme pressure.  Marketers that deploy this technology either directly or via an intermediary partner will outperform.

 


 

AppNexus is an internet technology company that enables and optimizes the real-time sale and purchase of digital advertising. Our powerful, real-time decisioning platform supports core products that enable publishers to maximize yield; and marketers and agencies to harness data and machine learning to deliver intelligent and customized campaigns. Headquartered in New York City, AppNexus employs over 1000 professionals in offices spanning five continents. For more information, follow us at @AppNexus or visit us at www.AppNexus.coms.com

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