THE DIGITAL AD ECOSYSTEM IS MESSY AND TRUSTX IS GRABBING A BROOM

02/28/17

Originally published on AdExchanger.com

TrustX GM and President David Kohl was sitting in the front row with a big smile on his face when P&G Chief Brand Officer Marc Pritchard laid into the digital supply chain at the IAB’s Annual Leadership Meeting last month.

For the past year, Kohl has been working on a project housed within Digital Context Next to bring premium publishers together into a programmatic cooperative.

Think of it as the love child between a joint business venture and a private marketplace.

So far, 31 publishers, including The Washington Post, CBS Interactive, Hearst, Purch, NBCUniversal and Vox, have signed on to make their inventory available with a human-viewable guarantee. The underlying tech was built by Iponweb, and Moat is providing the measurement and verification.

TrustX is in its alpha phase with a limited number of publishers testing the pipes against unpaid demand to make sure the plumbing works with desktop and mobile display. Beta will kick off by the end of the quarter, likely March, with somewhere between 100 million to 200 million impressions a month and with plans to ramp that up to about 1 billion impression.

The beta is slated to run until the end of July or early August, at which time it will probably also open to video and in-app inventory.

When it comes to transparency, RTB isn’t the problem. Rather, the problem is the sprawling complexity of the digital advertising ecosystem.

“For most problems, the answer in the ad tech ecosystem has typically been to throw a new piece of technology at the problem, layering technology on top of technology rather than trying to create a well-lit environment,” said Jason Kint, CEO of Digital Content Next.

Fraud and bad actors aside, inefficiency creeps in when “everyone just wants to take their nickel or their dime,” said Jed Hartman, CRO of The Washington Post, which plans to take part in the TrustX beta rolling out in March.

If the ecosystem had been purpose-built rather than jury-rigged, Kohl said, the digital supply chain would be less porous than it is today.

“Digital advertising, particularly in programmatic, has been cobbled together over the last decade or so without any master plan, and that’s enabled a tremendous economy to develop around media budget,” Kohl said. “But the fact is that less and less of each dollar is actually making it to working media.”

According to the World Federation of Advertisers, agencies and tech providers siphon off about 60 cents of every buck spent on media.

Brand safety can also be an issue in programmatic, as starkly evidenced in early February when ads for a number of high-profile brands, including Honda, Mercedes-Benz and Sandals Resorts, appeared on jihadist and extremist websites. Unfortunate contextual placements aside, the brands were put in the highly awkward position of essentially monetizing terrorism.

But retreating into the relative safety of direct sold isn’t an option for a publisher like The Washington Post, which generates more than 1 billion page views per month. That requires WaPo to run what Hartman called a “sizable programmatic business,” which includes selling on the open exchange.

“It’s not realistic to think that we’d be able to sell all of that from a direct perspective,” Hartman said. “But we’re an experimental culture and we always lean toward trying new sell-side platforms.

And if the yield’s there, so will be WaPo. It’s the same at CBS Interactive, another TrustX beta launch partner.

“I think they’re doing great work, but if we can find a better CPM, that’s always where we’re going – we’re ruthless in how we handle yield management,” said Dave Morris, EVP and chief revenue officer at CBS Interactive, who noted that CBSi is still deciding how much inventory to make available through TrustX.

But volume isn’t necessarily the point right now, Morris said. TrustX is a collective PMP of highly desirable publishers, and the CPMs will be priced accordingly. Each publisher will set its own pricing strategy, Kohl said. Although it’s too early to say what the CPM range will be on TrustX, according to Index Exchange the average PMP clearing price was three times the open market average in Q2 2016.

“Exchanges don’t sell out by their nature because they have millions of opportunities, but this is not an exchange, it’s invite-only, and not every advertiser can afford to be in there or wants to be in there,” he said. “If you’re a major direct-response advertiser looking for $1 or $2 CPMs, you won’t run on TrustX.”

“We’re just trying to get to sufficient scale so we can figure out a better way to trade programmatically,” Kohl said. “Let us be the industry’s master experiment.”

But for the experiment to work, TrustX needs demand. Kohl and TrustX CRO John Vilade, a former sales VP at Hulu, are pounding the pavement to drum up interest from marketers, DSPs and trading desks at the holding-company level, although Kohl declined to share names just yet. Publishers or marketers looking for a seat on the exchange can reach out to Kohl directly.

One thing TrustX doesn’t have to worry about, though, is making money, at least not for itself. The exchange will operate as a nonprofit subsidiary of Digital Content Next, which eliminates the profit motivation of a regular technology company, Kint noted.

While TrustX is never going to be a publisher’s main buying platform, the point here is to make a point, Kohl said.

“We’re building a purpose-driven platform to try and figure out what the next generation of ad tech looks like,” he said. “The publishers and agencies we’re talking to aren’t thinking about this as just another demand source. It’s a transactional platform, yes – real money will change hands – but it’s more about trying to think about programmatic differently and building something new.”

And the moment is right for a nudge – or a shove – toward greater transparency, said the Post’s Hartman.

“It feels like marketers are ready to really embrace something like this,” Hartman said. “And from our perspective, it’s 100% trusted brands in an exchange-type environment, so we looked at it and said, ‘Why not?’

CONTACT US
by admin

Huge media companies like CBS and ESPN are banding together to fight Google and Facebook — but it may not be enough

Big media companies are working together to sell digital ads to better battle Google and Facebook The TrustX initiative, which includes buy-in from the likes of CBS, News Corp., Conde Nast and Vox Media, is ramping its capabilities while promising marketers a safe harbor for their ads Yet TrustX faces potential challenges, including competing agendas and […]

read more

Predictions 2018: Who Will Win And Who Will Lose Across The Media Landscape

Media, so vital to the wellbeing of the economy, has endured a turbulent year. Marketers questioned the quality of the supply chain. Agencies reorganized to reinforce their value proposition. Ad tech continued to consolidate. Publishers scrambled to make money and keep their two sets of customers – consumers and advertisers – happy. While that short […]

read more

LinkedIn Trust Series at #AWNewYork 2017 – A 1 on 1 interview with David Kohl, President and CEO, TrustX

read more