Relying on Your Buyers Being Inefficient Isn’t a Sustainable Business Model

LiveRail are a sell-side programmatic ad tech company who have quickly become a mainstay of US video advertising. This year the company will be launching across Europe, starting with an office in London. VAN caught up with Mark Trefgarne, LiveRail CEO, and Yoav Arnstein, who will be heading up the European launch, to discuss what LiveRail will be bringing to the European market, the efficacy of private exchanges and broadcaster attitudes to selling programmatically.

Could you give a little bit of background on what LiveRail do and how you started out?

Yoav ArnsteinYoav: LiveRail is a video advertising technology company focussed on helping publishers manage both guaranteed and programmatic video advertising in a single platform. Our goal is to help publishers make more money, and help them navigate the increasingly complex world of programmatic video across devices. Buyers are now spending considerable sums of money via programmatic channels – and our goal is to make sure that publishers can navigate this market evolution successfully. The company is now almost a hundred people, headquartered in San Francisco, with offices in New York, Romania and now London.

Mark TrefgarneMark: I’m from London originally of course, so in many ways this is a return to our roots, which to me is the most exciting part of this move. Heading our International operations will be Yoav Arnstein, who’s joined us in the role of GM EMEA. Yoav is an incredible addition to our team and has an amazing track record building and scaling ad technology companies internationally; most notably as GM International at Mediamind/Eyeblaster.

What will LiveRail be bringing to the European market in terms of technology and which markets are you going to be targeting first?

Mark: In the US, our platform is recognized as the most advanced technology stack for video publishers and we believe that will also stand true for the European markets. Our team is actually more than half engineering by headcount – so we really do mean it when we say we’re a technology company at heart. We’ve built an incredible suite of tools from core video ad serving, through to tools for RTB and Private Exchanges which enables publishers to sell their inventory smarter, safer, and across all devices. Ultimately, our technology makes publishers more efficient and profitable.

Yoav: As programmatic becomes a more important part of the European video ad market, now is the perfect time to open our EU office to better support our existing clients and establish new ones initially in the UK, Germany, France and Spain. So timing of this move is important.

How are private exchanges working for your clients? Are publishers typically using them for remnant or are they putting in their top tier premium inventory?

Mark: We’re seeing a lot of premium publishers turn to a Video Private Exchange (VPX) solution. It allows them to embrace programmatic selling as a complementary channel to direct sales, and we’re finding that the controls and transparency are key to that decision. Being able to invite select buyers, prioritize bids, set price floors, and having advertiser level transparency (that they can use to inform their direct sales team with) are making the VPX a core strategy for publishers.

With that said, video private exchanges are not about remnant. We often see publishers create an “indirect premium” segment of exclusive inventory to offer programmatic buyers which helps to give them a better idea of how their video inventory is being leveraged down to specific categories, how to optimize, and how valuable the inventory is.

On buy-side of the RTB/programmatic world, companies like to talk about the reduction of wasted ads, but it could be argued that the the buy-side’s wasted expenditure formed at least part of the sell-side’s revenue stream. Can data-driven advertising enhance the value of publisher inventory to the point where it compensates for more efficient and targeted forms of advertising?

Mark: Relying on your buyers being inefficient isn’t a sustainable business model in any industry; and thats the challenge publishers are facing right now. Their buyers are becoming incredibly efficient, using automated, programmatic technology to buy media that really matches their needs by leveraging first and third party data. Thats why deploying programmatic sales technology for publishers is so important. It ensures that all actors within the market are coming to the table and transacting in a way that is fair and efficient.

Yoav: To speak specifically to the data portion of your question, for some publishers, enabling targeted advertising driven by first-party data they generate can be a valuable ad product that commands a premium price. For many others, especially the ones that lack the type of scale and content to enable that, I believe it is less relevant. However, for these data-poor publishers, programmatic buying and technology platforms can still present a tremendous opportunity in my opinion. These publishers usually have agile operations that can adopt technologies ahead of the curve to create operational efficiencies, leverage 3rd party data assets and optimize inventory.These will translate to attractive ad products that can deliver to the buy side the waste-free inventory they are after.

How are broadcasters responding to selling their inventory programmatically? Is there much appetite for selling ads in linear live streams programmatically?

Yoav: We see great feedback from broadcasters, and many large broadcast publishers in the US are now embracing programmatic sales. It certainly is a smaller part of their business today than traditional reserved sales, but that’s changing. I believe that broadcasters are bringing their experience from the programmatic display ad ecosystem and applying it to video in a commercially sound way. Learning from the mistakes of commoditization and price erosion, but reaping the benefits of scale and efficiency. This means we should expect to see them participate more actively in the programmatic buying game albeit with some video-specific controls.

Mark: As for live streamed events, we have been actively powering programmatic video advertising in live streams for a while for clients like CBS interactive and Major League Baseball. Its actually an ideal solution for these types of live broadcasts, as the huge traffic spikes that can occur during live events often overwhelm the booked/reserved campaigns from the guaranteed-sales team. Opening access to programmatic buyers during these times is a powerful strategy that has helped many publishers. We also have some of our European clients evaluating this closely.

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