Martijn Eindhoven Discusses The Sanoma Ad Trading Strategy, Varying Publisher Approaches In Europe & The Adoption Of RTB On The Sell-Side
Can you give some overview on Sanoma’s current trading strategy?
Sanoma Media has had a well-established and successful private exchange for 4 years now with large premium inventory partners. So we have been trading for a long time already.
We have spent a lot of strategic thinking about our role in this rapidly changing market since traditional roles are fading across the whole chain.
What we have done is split automated trading into two teams who work together closely, a commercial team and a yield management team dividing premium in non-premium propositions. The commercial team is responsible for all direct deals we make with advertisers and agencies. The yield management team focuses on actual yield as the name suggests, but without forgetting advertiser/agency relationships, the value of the website and value generated through premium sales.
As a large publisher with audiences in many different segments the fading of traditional roles in the chain gives us new opportunities in the automated environment. To this end we will expand our product suite over the months to come to provide our advertisers and our actual audience the best possible value.
You are now putting inventory through RTB. How are you avoiding sales cannibalisation of top-tier inventory?
Cannibalization is a very big subject within Sanoma Media and will always be, as it should. In 2007 the introduction of our private exchange based on a CPC offering was not received very enthusiastically. The discussion if this proposition would cannibalize on our premium products was an overall fear. It took two years before people realized that premium campaigns were actually strengthened by the private exchange.
Now that we are offering RTB to our demand partners we are having this discussion again, like we should because the dynamics are completely different and a lot is at stake for us as a premium publisher. The question is whether the formats and positions offered through RTB are still perceived as top-tier in general.
Currently buying RTB on our network is available for selected partners based on the grey-box model. You know you buy Sanoma Media inventory but not the actual position in the network. On the other hand, the insights and transparancy RTB buyers gives, teaches us a lot to tweak and learn from the process.
How are you making inventory available in real-time? And how do you manage buyers and floor prices?
We have recently migrated all our automated trading products and inventory to Improve Digital’s 360yield platform. In that process all inventory made available to automated trading is also real-time available for our selected demand partners
With the migration to Improve Digital we have integrated our private exchange model with the RTB and network model. This means that our large advertisers’ base now actually competes with the external demand partners. An interesting learning out of this, for now, is that the base floor we set for real-time is not affected because of severe competition we have created.
Buyer management is a two way process in our case. Many websites in our network have specific niche audiences relevant for specific advertisers. On the one hand the value of the position and the certainty of reaching the right audience comes with a price which is defined for each website and audience separately. On the other hand we get insights into the performance of websites and audiences for specific advertisers and segments, combined with our own data we can set a market price based on that broader picture.
Is Sanoma happy to sell to everyone in the market?
Short answer, no.
We perceive ourselves as a quality publisher and we are demanding a similar quality from our demand partners.
What are the advantages of a private exchange for publishers?
Private exchanges give a publisher more control over the way their inventory is monetized.
More importantly it pushes the publisher to know more about their network, audience and demand partners, something many of us have not really focused on.
Can a private exchange give the type of controls a publisher needs?
A private exchange or fully-fledged SSP gives publishers the tools to take control but require a larger dedication of the publisher as well. Not only on managing yield but also in managing the relationships with the demand partners, advertisers and internal stakeholders as well.
Just installing an SSP and letting it go organically is not per se better than using your network partners to fill that inventory.
Will a one-size-fits-all aproach work in Europe? Or will there always be mixed strategy depending on the publisher?
I don’t believe in one-size-fits-all approach to be honest. The US market is incomparable to the European market, if you could call it a European market at all with all the diversity in every country.
Besides, every publisher is structured differently with different strategies, goals, audience’s and content. Every publisher needs a tailor-made set-up.
Do you think you might follow a similar model to De Telgraaf in opening up completely to all demand, and bidding on your own inventory?
What De Telegraaf has done is very interesting and they are doing a great job. Sanoma Media is a different type of publisher but in the end there are always similarities in goals though.
A bit of criticism on the question. We have opened up a lot of inventory to meet the demand for 4 years already. We might have been a bit later to the RTB game, but we aren’t lagging behind. Like I mentioned earlier, all inventory made available to yield is biddable and has been for the last 4 years.
We differ in approach compared to De Telegraaf in the way we buy or bid on our own inventory. We have our direct advertiser network where De Telegraaf bids on inventory in their network ‘for’ their advertisers. The architecture we use is a lot simpler, easier to manage and to be honest cleaner. Clean as in not having double or even triple cost in serving, supplying and buying biddable inventory through two or three systems.
Do you think there is still fear among Europe big publishers of putting inventory into the automated channel? How would you advise other European publishers to approach this space?
I do most certainly think that many European publishers fear automation. Let ‘s not forget that RTB is just part of the possible online mix and should never be the sole point of entry.
Many of us tend to think that RTB will increase revenue in the long run. It will if we treat it right. We have to steer away from unlimited amounts of low-quality unidentified inventory to a more limited amount of high-grade identifiable inventory.
European publishers have to consider their role in the quickly evolving market and what automation will do to that position. What is asked of us as publishers now is that we truly understand what the worth is of the audiences we reach, the loss of that value by not monetizing it ourselves and take appropriate action to create a fair-trade open marketplace . If we’re not careful altogether, money will not be the biggest issue but the public opinion and governmental decision makers will be.
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