Q&A: Beeswax CEO Ari Paparo Explains His Company’s ‘Bidder-as-a-Service’ Proposition

Ari Paparo

While display and mobile have been well-served with custom ad tech solutions, there have been far fewer options available to video buyers and ad networks who need a video bidder they can customise, such as the ability to design your own algorithm. Building your own technology has been pretty much the only option available. Today sees the official launch of Beeswax, a New York-based company started by three former Google engineers. The company is headed up by CEO Ari Paparo, who was the original author of the IAB’s VAST standard for video ad serving and a patent holder on Nielsen’s OCR measurement methodology. Prior to founding Beeswax, Ari served as EVP Product Management at Bazaarvoice, SVP Product Management for AppNexus, and as a director of product management at Google. Here Paparo discusses the product, walled gardens and where he sees the opportunities ahead for Beeswax. Ari will be one of the speakers taking part in New Video Frontiers New York on September 10th.

Ad tech appears to be going through a consolidation phase. Where do the opportunities lie for Beeswax as a reasonably late entrant and what do you bring to the video advertising market that wasn’t there before? 

I’ve been vocal on Twitter and elsewhere that the current pessimism around ad tech is misplaced and we continue to see great innovation for marketers and great exits for entrepreneurs. Stepping back a little, the shift of digital advertising to programmatic is a multi-billion dollar opportunity that is still growing at double-digit rates, so I’m not ready to throw in the towel.

What’s been happening over the last 12 months has been really exciting. Marketers are demanding transparency and control in their programmatic spend, and this is just beginning. At Beeswax, we think ad tech market has been filled for too long with vendors that are not quite SaaS and not quite media, and ultimately struggle to give the transparency marketers demand. We hear stories every day about ad tech vendors lacking the simplest aspects of transparency, such as an API — can you imagine running a tech company in 2015 that doesn’t have an API?

At Beeswax, we see an opportunity to provide ad tech products to both the CMO and the CTO. If you’re buying tens or hundreds of millions of dollars worth of digital media, you’re asking yourself how to take more control, gain learning you’re currently not getting, and flatten your costs. The best way to do that is to own the tech yourself, and our Bidder-as-a-Service solution is the first opportunity to bring cloud services to the bidding world.

So who will be the typical Beeswax client and what kind of in-house expertise would they require?

We are building our solution for sophisticated buyers of digital advertising. By “sophisticated” we generally mean those companies that struggle to get the most our of typical DSPs with one-size-fits-all buying solutions. Sometimes this is because the customer has expertise at bidding or data modeling, other times it is a customer who has unique creative formats, and some customers just want to work harder and smarter running their own trading desks. We’re entering beta with a number of ad networks and value-added resellers of video inventory, who can bring their own data or expertise to the buying process. We expect to enable larger direct marketers and publisher trading desks within the next six months.

The original vision for programmatic advertising was a world where advertisers would be able to buy audiences at scale across whichever inventory they wanted. However, in video the top tiers of inventory are usually locked down through private deals and private marketplaces, so it’s rarely available to buy via open RTB. How do these trends affect the ability of buyers to get the best out of algorithmic targeting in video advertising?  

The relative illiquidity of video is definitely an issue for campaign delivery, but as buyers scale they tend to be able to open up additional sources, often through participating in those private deals. YouTube remains a huge source of high quality inventory, and smart buyers make the effort to comply with their creative requirements (15 second creatives, no VPAID) in order to get reach.

In an interview with VAN last year, Vivaki’s Danny Hopwood said he believes the industry is heading towards becoming a series of walled gardens, where companies offer a combination of media, data and technology. Would you agree with that view and where does this leave companies who are offering technology or media alone? How do independent companies compete?

This is a big and complex business so it is hard to generalize. For example, while Facebook reduces the number of partners in FBX, they simultaneously invest in (open) LiveRail. Google is often characterized as becoming a walled garden, yet remains the biggest source of liquidity in the market. As an entrepreneur in this sector, I think the real challenge is keeping up with the amazing pace of innovation in the space, often led by these bigger companies. One of the reasons we think the Bidder-as-a-Service solution is the right one for this time in the marketplace is exactly because of the increasing cost of managing the technology — it makes less sense every day for individual companies to try to keep up a working programmatic stack.

You’ve assembled an impressive team and a number of high profile figures from the ad tech world have invested in Beeswax. Could you tell us who’s involved?

We raised a sizeable round, with participation from a “who’s who” of ad tech executives, including David Rosenblatt, the former CEO of DoubleClick, Auren Hoffman, CEO of LiveRamp, Joe Zawadski, CEO of MediaMath, Jonah and XX Goodhardt, CEO of MOAT and a founder of Right Media, Doug Knopper, CEO Of Freewheel, Jim Payne, CEO of MoPub, and many others. Institutional funds came from SV Angels, Highland Capital, Revel Partners, and RRE.

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