I shared a story yesterday about the Euro ad tech scene. It’s definitely hotter than I’ve ever seen but with AppNexus’s snapping up of Alenty, I think the message is now being broadcast loud and clear: Not all innovation is coming out of the Valley or NYC.
At the AppNexus summit this week there were, of course, the familiar sponsor logos of Microsoft, Oracle, Millennial, and Peer39. However, there were also quite a few small, new, European startups. They came from the UK, France, Netherlands, and elsewhere. Companies like Grapeshot, FlxOne, Wywy, Adomik had a strong showing and I think raised the EU tech flag in a very visible and encouraging way.
The work I’m doing with AtlanticLeap aims to support these fast-growing companies as they look west to expand into the biggest ad market in the world, the US. Historically, the story has always been that there’s a sluggish pace of innovation and venture cash in Europe. That seems to be changing lately and the AppNexus acquisition of French tech company Alenty is certainly feeding the speed of that change.
I’ve been very impressed with the number of European companies that have been innovating and pushing the limits without huge amounts of funding. The model where you have to raise tens of millions to prove out an idea isn’t the only way to innovate. Our partnership and acquisition of Alenty is an interesting model for the future, where entrepreneurs are rewarded for creating real value, even if it’s not the entire value chain. Brian O’Kelley, CEO AppNexus
via AppNexus Tries M&A, Mulls 2015 IPO | AdExchanger.
There’s been quite a bit of activity in the EU ad tech space lately. Alenty getting acquired by AppNexus is the latest EU startup getting rolled into a US giant. While Europe isn’t often thought of as a hotbed of start ups and VC, that is, in some spaces, starting to change.
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Earlier this week I was lucky enough to attend and speak at Digiday’s inaugural European event, the Digital Publisher Forum. The event was a valuable snapshot of the state of the European online ad market in the summer of 2014. Lots of consistent messaging: Native; Programmatic; Mobile; Eroding Publisher Power; ‘Tech Tax’ and other topics that are on everyone’s lips at the moment.
The team was kind enough to prepare a tidy summary of the key themes and takeaways.
I presented on the state and future of Programmatic Trading, with an eye toward risks and opportunities for publishers. One stat I cited was the lack of understanding from CMOs about this type of advertising planning and delivery:
Just 23 percent of CMOs understand programmatic advertising enough to use it in campaigns, according to a Wall Street Journal report. Still, Audra Martin, vp of advertising at the Economist Group, gave a compelling case study. When deployed well, programmatic can allow for premium efficiency at scale.
5 things we learned at the Digiday Publishing Summit in Barcelona | Digiday.
This review and summary of Hilton case study is pretty interesting. I spoke this week in Barcelona about how ad tech companies are moving further and further up the advertising food chain, trying to get ever closer to the actual brand advertisers. After all, that’s where the wellspring of cash is. And, if as we’ve seen in some cases, there is a 70% ‘tech tax’ imposed on publishers, why would technology companies want to work harder to get ever-dwindling returns from the players at the end of the funnel?
Hilton’s case is an interesting one and looks a lot more like a publisher story form 5 or 7 years ago. Hilton, acting as the advertising brand, is building out their own tech stack, in many ways bypassing the agencies, trading desks, etc. Granted, it’s an isolated case but it could be a very interesting trend, especially when combined with brands becoming publishers.
I can imagine an advertising and media technology singularity — The brand acts as publisher, building a campaign to run against their own inventory, delivered via their in-house customised tech stack.
I have had many conversations with various clients and industry peers and thought a lot about the place of custom solutions in AdTech. Are brands like Hilton, who customise their AdTech stack, rare isolated cases or could it be the beginning of a trend? Who should initiate customisation where it is required?
Friday Commentary: Brands should consider customising their AdTech stack – State of Digital.
These programmatic numbers keep going up and up! Good thing my presentation is done at 12:20 PM today. It’s getting tough to stay on top of the upwardly-adjusted forecasts and estimates that are coming out.
The revision, which comes via an analysis of multiple studies performed by eMarketer, estimates advertisers will now spend 75.3% more on programmatic advertising in 2013 than they did last year. The previous estimate, a 73.9% increase, was apparently not ambitious enough. In dollars, that means $3.37 billion will be spent on programmatic in 2013 and $4.66 billion in 2014.
eMarketer Raises Its Programmatic Ad Spend Estimate, Again | Digital – Advertising Age.
Well this is encouraging. I’m presenting at Digiday’s European Publisher Summit tomorrow on the future directions of Programmatic ad trading. This piece, which they ran on May 14th and only now popped up in one of my feeds, certainly backs up a lot of key points. That’s reassuring.
The only point in this piece that I don’t particularly dwell on in my presentation is the (social) platform aspect. Mainly because it’s an area I don’t know too much about. Except how to annoy people in the UK with with pictures of Barcelona whilst here for a conference.
The main points the author, Taylor Davidon, a venture capitalist with the agency-backed KBS+ Ventures, calls out are:
- Marketers are getting smarter about programmatic.
- Programmatic works, therefore it will get more dollars.
- Native is going programmatic
- Platforms have embraced programmatic.
- Programmatic is going far beyond the banner.
“The real challenge around programmatic is not around using the pipes to send more banners,” he said. “Instead, it’s about marrying new formats with content, targeting and data to create a different model for ad deployment that’s native to the experience.” — Taylor Davidon
The one aspect of programmatic that he doesn’t call out that I pay close attention to is the use of and continued availability of increasingly rich and deep data. It think data + mobile will be the oxygen and fuel that will help the programmatic fire burn brightly in the next 12 -18 months.
5 signs programmatic advertising is taking off | Digiday.
Charlie Fiordalis, managing director-digital at Media Storm, makes a pretty blunt case for dropping the bill for fraud prevention on the publisher’s front door. I can sort of his point but his suggestion to publishers to look at it as a form of insurance leaves me a little bit uneasy. I’m not sure it’s as cut and dry a case as he puts forward.
Why shouldn’t it be more even-handed across the industry with buyers putting pressure on pricing by not paying as much for blind, non-transparent inventory and paying more, i.e. rewarding, the behaviour they want. There must be a market force from the buy side that can be brought to bear on this issue. Further, I’d think that the lions share of the burden needs to sit with the networks (DSPs and SSPs) to vet the inventory they are managing. They’re the ones that are building billion dollar businesses here and there should be some costs involved in ensuring that what they are brokering is what it appears to be. Finally, the publishers, who it would be hard to say have been the big winners in the online ad revolution, for their part should bear some responsibility for keeping a ‘clean’ site and, in particular with regards to viewability, offer up the most desirable inventory to buyers.
…The buy side has operated with the assumption that we are getting what we have purchased. Ad fraud is a threat to that assumption, and I think the responsibility for direct payment should come from the publishers. There, I said it. Someone had to. I realize this may not be what the publishers want to hear, but they can look at it as a form of insurance on their side. —Charlie Fiordalis
How to Fix Ad Fraud and Why Publishers Should Pay | DigitalNext – Advertising Age.