Genesis Stories
Marketplace Dynamics with Todd Garland, Founder & CEO of BuySellAds

todd-garland-buysellads

Todd Garland
Founder & CEO
BuySellAds

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You founded BuySellAds in 2008, and were a pioneer in (what is now known as) the programmatic direct / automated guaranteed space. Can you share a little more on the genesis story of BuySellAds?

Back in 2007, when I first started working on the idea, real-time bidding was just becoming a “thing.” Federated Media was entering its prime, and AdSense was starting to show signs of weakness in certain verticals. One of those verticals, web design and development, is where I was focused professionally at the time. We set out to fill the direct sales void that real-time bidding didn’t offer to publishers. At the time, AdSense, unlike Federated Media, was focused on everything but premium inventory. In fact, they were focused on the exact opposite “ultra premium” market where Federated Media had found its success.  This is why we were able to get initial traction, because our product helped unlock pent up demand for this inventory that wasn’t quite “good enough” to get sold direct by Federated Media, yet made publishers more than AdSense.

At our core, we’ve always wanted to provide content creators with a low-friction, high-functioning self-serve platform that automates the repetitive processes involved in selling ads directly to advertisers. On the buying side, we want to open up access to the web’s ad inventory to all marketers. We set out to eliminate the burden of discovery and research for advertisers. Our goal was to provide advertisers with a highly-curated “marketplace” of media companies who sell advertising through a standardized process.

 

BSA has grown to be the preeminent guaranteed marketplace for digital advertising, now serving over 6B Impressions per month on behalf of publishers, with over 12,000 advertisers, and 1,500 premium & mid-tail publishers participating on your platform. How has BuySellAds evolved over the years, and what would you say is the ultimate end goal of the platform?

Over the last year and a half, we’ve moved upstream. Part of this is attributed to the compression that media companies are witnessing in earnings, and that now requires more automation to be profitable. Automation is our core competency and our entire software stack for media companies are designed to return efficiency to sales teams that close a high volume of deals with advertisers directly.

In addition to our self-serve platform and tools, we also have a native ad server/api, and a dozen or so high-quality custom ad formats that sales team can take advantage of without involving their tech team.

We are deeply committed to helping media companies liberate themselves from real-time bidding companies.  AdTech has done a terrible job of looking out for media companies online over the last decade.

 

With a 5% acceptance rate of publishers, you only accept content websites and creators of the highest quality. All your tools point to sustainability, transparency, and control for both sides of the marketplace (buyers and sellers). What do you think are some of the biggest strengths of BSA, and maybe some misconceptions of the company?

Our greatest strength, undoubtedly, is that our company-wide philosophy stands in stark contrast to real-time bidding. Any AdTech company built around real-time bidding is being dishonest when they tell people that they’re focused on the publisher. There is not a single RTB company that has a publisher’s best interest in mind. Even if that were the case (and it’s not), why are we still talking about ad fraud and the public’s general distrust in Ad Tech? Real-time bidding companies have failed to stop these issues at their gates. If they were focused on the publisher, they’d have more respect for a publisher’s audience.

The biggest misconception that our competitors frequently tell their prospective clients is that we’re “small time” which couldn’t be further from the truth. The fact is that if you spent some time dissecting these claims, you would discover that when it comes to self-serve BuySellAds has more customers using our product than they do, BuySellAds has substantially processed more transactions than they do, and in a lot of cases has a larger team working on our products than they do, since this is all that we focus on as a company. We constantly win deals, while competing against companies like Rubicon Project, even when competing for a client with whom they are already doing business.

If that makes us small time, it begs the question, how do they classify themselves?

 

Your 50,000th order was placed on the BSA marketplace on December 14th of 2011, and your 100,000th order was processed only 18 short months later on June of 2013. How did you scale to such a large number of returning advertisers so quickly?

We have a lot of time focused on providing advertisers with a frictionless ordering process. Maintaining simplicity in that situation is surprisingly difficult as our software evolves, but it has been our number one focus.

That said, we have an incredible development and product team who works feverishly to ensure that we’re providing a friction-free environment for our media partners and advertisers.

 

Your recent Medium article, about how It’s Time for AdTech to Evolve, really struck a chord with many in the industry (including us at Thalamus). Advertisers, Adtech Companies, and Publishers have over-reached in their value exchange with consumers, causing a backlash of ever increasing ad block adoption. What do you think are some of the biggest problems the digital advertising industry faces today, and what are some ways to ameliorate these issues?

First, the IAB’s unwillingness to acknowledge that we have a problem should be a huge concern for the industry. Instead of getting to the bottom of things like ad fraud and malvertising, they have focused their efforts on lobbying media companies to “block the ad blockers.” It’s something you would expect from a politician, but not an industry organization that collectively speaks for advertisers and media companies online.

While I am not ready to cast conspiracy theories just yet, it does make me wonder why an organization like the IAB would take a position that very clearly only helps IAB’s largest members like Google and Facebook. Litigation and “lobbying” isn’t the solution here, but it feels like we may be heading in that direction quicker than I may have realized.

As an industry, we need to address the triggers that lead consumers to install ad blockers and build better technology for media companies. I think the first place to start is quite simple: provide media companies with technology that doesn’t creep out their users, and that doesn’t allow for an ad unit to be a delivery mechanism for “trackers”. Privacy is a primary concern for people using ad blockers, and why the industry is ignoring that information while developing technologies like header-bidding is confounding. Additionally, why is it possible for malware and AppStore redirects to proliferate the supply chain? I really don’t understand how AdTech can’t prevent silly stuff like an ad that redirects a user to the AppStore. Some would argue that the technical solutions are complicated, but I would argue that the biggest hurdle is removing the financial incentive for AdTech to continue ignoring these problems. This is the basis of my point that real-time bidding companies aren’t publisher focused, despite what they might claim. If we can send a rocket to the moon we should be able to stop an AppStore redirect, no?

 

Programmatic, has been somewhat of a bane of publishers, cannibalizing their direct ad sales, and commoditizing their inventory and CPMs. (Not to mention the massive fraud that takes place on some exchanges) However, eMarketer has stated time and time again that Programmatic is on the rise and will be the main mode of buying for advertisers in the near future. What is your definition of Programmatic, and how do you think this will all play out over the coming years?

To me, programmatic means that computers or servers are involved in creating efficiencies for sales teams. If you think about the technology it in that capacity it only makes sense that programmatic will continue to grow.  There is an efficiency to be gained for both advertisers and media companies with programmatic technology, and those gains are quite substantial.

We’re still in the “wild west” when it comes to advertising online. But, we’ve witnessed a meaningful shift in our conversations with advertisers over the last few years. Instead of asking for display campaigns, they start out asking for our custom and native offerings. If they have budget left over, we talk about display.

It is true that advertisers want to scale, but it is also true that within display there is massive fraud and an overall decline in performance. The decrease in performance, partly due to the fraud, is why advertisers are starting conversations with media companies differently.

Savvy media companies – those who can sell their display inventory with a sales team – are no longer putting their inventory up for auction. The loud voices in programmatic, and more specifically real-time bidding, will make you want to believe that this is blasphemous and a poor decision. “Why not let the market determine the value of your inventory?”, is what they will say.

There is this notion spread by proponents of real-time bidding that the only place to determine the actual market value of a publisher’s ad space is within an RTB protocol, or another a real-time auction system like header-bidding. The truth is that pricing is, and has been for years,  determined by the market for directly sold campaigns. It’s not real-time, no, but it doesn’t need to be. Bespoke ad inventory doesn’t hit real-time bidding auctions or the ad exchanges, despite what those folks would like you to believe.

Over the coming years, we’re going to see better technology built for media companies. Today’s “publisher” technology is built for advertisers, and they’re sucking margin out at every opportunity.

The ad block effect is going to be a driving force for change. Media companies now need to rethink who they do business with and who truly has their best interests in mind. It’s a seismic shift, and it’s on the AdTech horizon. Media companies need higher margins to survive, and they have important decisions to make about their future.

 

How does the advanced targeting feature work on BuySellAds? Do you offer data through 3rd party data partners, offline data, or is it just internal publisher targeting segments?

We have a sophisticated integration with DoubleClick for Publishers, Adzerk, and OpenX. We can expose data segments contained in these platforms through our self-serve platform. It may be as simple as a series of custom key/value pairs or an audience segments. Really, we can do it all when it comes to exposing inventory within an ad server to self-serve advertisers. This also includes forecasting against that inventory as well. So, if the data exists on the ad server, we can expose it to buyers.

That said, we don’t collect end-user data or sell it to 3rd party partners like most of our competition. We believe that 1st party data belongs to the media companies that sent them. We’re an advertising company, not a data re-selling company like others in our space. We’re philosophically opposed to providing first-party data to anyone outside the original information exchange chain.  It’s something we will never compromise on, no matter who asks. And my, have we been asked.

 

What is your take on private marketplaces? Do you think these will ever be within the reach of medium to smaller advertisers?

SMB’s don’t understand private marketplaces, nor should they have to honestly. Sending a local or SMB buyer into a private marketplace is a non-starter. “Small to medium” sized buyer doesn’t mean they don’t have a budget, either. It just means that maybe they are on the marketing team and aren’t specifically trained or tasked with managing a programmatic buying interface.

To take a step back for a second, Google, Facebook, Twitter have such incredible scale in ad revenue because they make it dead simple for local and small buyers. What many publishers are starting to come around to now is the idea that a “quality advertiser” is not synonymous with “large brand” or “large budget”. It is crucial for media companies to empower their sales teams with technology that helps them sell towards quality over budget. Self-serve is becoming a standard component of a publisher’s ad tech stack because it prioritizes quality over quantity.

 

Back in early 2014, Google announced that they launched Adsense Direct, which would compete directly with BuySellAds. To your knowledge, have they been successful with this on either the advertiser or publisher side?

In fact, they shut it down in the fall of 2014. I’m not sure why it failed for them, but my hunch is that it was at odds with everything AdSense stands for, which is disintermediating the publisher’s ad sales team. For direct sales technology to be successful, it has to be centered around empowering the sales team. Google stands to lose too much when that happens.

 

To the extent that you can reveal, what is your renewal rate of the tens of thousands of advertisers using BSA? Do you feel that users will eventually experience creative or placement fatigue and what are some ways to mitigate this as an advertiser?

It is surprisingly high. The biggest issue we have faced is the declining performance of display, but those advertisers have simply moved quickly toward custom and native, content, as well as email-based campaigns.  The money isn’t drying up; it’s just moving to more targeted channels.

 

In late 2014, Rubicon Project acquired isocket and ShinyAds for an estimated $30M. What is your opinion of this?

BuySellAds is a very different business than both iSocket and ShinyAds. My understanding, at the time, was that iSocket wasn’t able to make payroll and that ShinyAds wasn’t able to raise another round of funding. I did take a look at the iSocket financials when it was released publicly by Rubicon. At that time, BuySellAds earned more in net profit in one month than iSocket did in revenue for the entire year. Not to mention, two-thirds of iSocket’s revenue came from investors filtering money into the company.

It’s also a well-known “secret” that iSocket’s automation was an integration with Amazon’s Mechanical Turk where humans were doing the ad trafficking automation and not the actual software. I’m not here to throw stones at thrones, but those are the facts and they’re available to anyone willing to do the digging.

My opinion is that the real technology was all built into ShinyAds. It was a great product, and it was ahead of its time. Unfortunately, it seems as though ShinyAds’ product has not seen much innovation since the acquisition. My guess is that Rubicon Project is more focused on routing direct orders through real-time bidding protocols than direct-to-ad-server like we do at BuySellAds, which isn’t surprising since they are heavily invested in RTB.

 

BuySellAds is a bootstrapped, sustainable business in the adtech space (which is kind of amazing). What are some of the merits of staying bootstrapped, and have you ever thought about raising VC funding?

For starters, I still have a job. When was the last time a VC-backed company kept its founding CEO around for 8 years?  Kidding aside, with our software, we have been asking media companies to change their selling behavior. This is a much longer game than achieving returns for a fund over seven years.

I do believe there could come a time where we raise money, and the space we’re in is starting to accelerate quite a bit, but right now we’re proud that we’re sustainable and bootstrapped. It’s helped us continue to innovate in this industry.

 

BuySellAds also offers an Ad Server (along with being able to integrate with most of the main publisher ad servers out there), with extremely interesting ad units like Native, Sponsored Content, Interstitials, Top Notifications, Flyout Boxes, Page Peels, etc. How has the response been so far from the publisher community about these more custom ad formats?

It all comes down to sales teams needing better technology offerings, and this is one of the ways that we deliver on that promise to them. Ad blocker adoption is forcing the publisher to think further outside of the 300×250 and 728×90 box. Providing an alternative, custom formats helps teams retain advertisers and increase CPMs. Ultimately, these new ad units help media companies fund quality content without sacrificing user experience for their readers.

 


 

We started BSA for one reason: to make buying and selling ads incredibly easy. And we do. But since then, we’ve evolved to mean much more for publishers and advertisers alike. We operate one of the largest advertising marketplaces on the Web, selling well over 6 billion ad impressions each month. Our approach is unique, genuine, and transparent — that’s why thousands of advertisers and publishers love doing business with us. It’s just so easy.

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