Dr. Martin Enderle, Deutsche Telekom, Discusses the Future of RTB for German Sales Houses

Can you give an overview of the Deutsche Telekom sales house proposition? How diversified is the business?
With InteractiveMedia being a 100% subsidiary of Deutsche Telekom, the leading sales house in Germany is part of DT group. InteractiveMedia exclusively represents the media assets and platforms of DT to the market. In addition, IM has a substantial 3rd party business as well, representing premium media brands like Kicker, Cosmopolitan and Bunte. IM is positioned as leading digital premium house in Germany, offering the full range of channels (from site representation and strategic co-operations, to audience and performance sales) across all digital devices (Online, Mobile, TV).
The German sales house is becoming pretty famous across the industry for its resilience to the evolving RTB space. How and why does the model continue to withstand new, disruptive forces?
German sales houses have a pretty strong position in the market as they don’t only represent big publishers, but also have a number of large owned and operated sites. German sales houses have historically been apprehensive with regard to sales through indirect channels because they want to maintain control and not allow a ‘back door’ to their quality inventory.
Maintaining rates and mitigating channel conflict are of paramount importance. The blind ad network model has so far also struggled to scale in Germany because of this inventory ownership and dominance. RTB is an opportunity to solve existing market inefficiencies and logistical issues and to increase monetisation of premium media – provided that it is not fully ‘controlled’ by technical pure plays with nontransparent marketplace models. IM will therefore enter this space with an SSP model, focusing on quality solutions for premium media.
Do your diversified assets (magazines, TV, etc.) enable you to build more sustainability versus, for instance, a display-specific sales house?
We own leading media assets and platforms on all screens – online, mobile, IPTV – with an extremely high consumer reach. This enables us to participate in exciting new growth areas such as Interactive TV Advertising or Mobile Advertising, although display is still the substantially growing core area.
What is the Deutsche Telekom perspective on programmatic buying?
Programmatic buying and RTB bring a couple of advantages in comparison to traditional media buying:
– Trading is transparent, as buyers typically know exactly which inventory and which users they are buying and can adapt their bids towards this. Sellers, on the other hand, know which advertiser will be delivered and can set rules such as floor pricing etc. according to this.
– Trading is efficient. The handling is very much automated, it scales nicely and saves costs for all participants.
– Programmatic buying, therefore, has a high disruptive potential, and will sustainably shape the way online media is traded.
Will RTB scale in Germany?
Agencies and big advertisers are already working on bringing their solutions for automated buying into the German market, and are eager to increase budgets in this channel. The big marketplaces are also about to enable their available inventory for RTB, which will bring some liquidity into the market and will enable some growth in Germany in the short term.
However, in the end it will be the sales houses that are needed to make RTB scale in Germany. InteractiveMedia will pioneer the new landscape – with a clear focus on quality and premium media.
Can the new era of automation bring you new demand, or will it evolve to simply represent a streamlined/more efficient workflow to execute media buying?
Automation will save costs and free margins that are currently detracting from the value chain by players with arbitrage business models who are not adding a lot of value besides aggregating larger stacks of inventory.
It’s in the hands of the sales houses, like InteractiveMedia, and publishers to make this market and shape the new ecosystem in a way that embraces their focus on premium inventory, high quality sales and value add for advertisers, agencies and publishers.
Over time, this will contribute to a continuously healthy growth of the digital advertising market – but there is no ‘fresh money’ on the demand side just because a new technical trading system is available.
If the RTB agenda is pushed hard enough by the demand side (agency and advertiser partners), how will Deutsche Telekom adapt? Could we ever see a collaboration of sales houses to build the ‘ultimate sales house’ controlled exchange?
Regarding the consolidation of budgets on the buy side, and the fragmentation amongst publishers and sales houses in the German market, you could come to the conclusion that a consolidation on the sell side is overdue. Currently, we are still far away from a La Place Media like scenario, as we see it in France. However, we are open for a variety of co-operation models – with clear focus on value for publishers and advertisers.
If/when Deutsche Telekom move into programmatic monetisation, how likely is it that Deutsche Telekom would build or buy, versus borrow, from a technology stack perspective?
In the end, it’s not only about building or buying a solution for programmatic buying, but rather about being able to serve our publishers and advertisers in a optimal way across all media types and across all sales channels.
Our focus is to offer the best products for our advertisers and realise the highest value for our publishers – we do so within an integrated sales approach. Therefore, a highly-efficient and integrated technology stack clearly is a prerequisite; but this could likewise be reached by building/buying and partnering.
Clearly we don´t see our role in re-developing advertising core technology; however, we invest in more technical competencies to create value-add on top of that.