OC Metro: Irvine company executive shares what he thinks the future of advertising will look like

April 9, 2015

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BY JENNA L. JONES / STAFF WRITER

In the not-so-distant future, this newspaper will have the crisp, paper-light texture of a daily but will act with the technological sophistication of a digital device, complete with targeted video ads and rotating news – at least according to Jim Waltz, acting chief operating officer of Irvine ad tech company Adaptive Medias.

Waltz points to the Kindle, a mobile device that mimics the pages of a book, as evidence that new gadgets will continue to emerge and enable new forms of digital advertising and marketing.

The ad tech industry includes all services and software that manage, deliver and control targeted online ads. Through ad exchanges and software, Internet publishers and advertisers buy and sell online ads through real-time bidding.

Adaptive Medias earned $5.08 million in revenue in 2014, up from $1.03 million in 2013, an increase of 393 percent. The company has 32 employees and specializes in digital advertising through mobile, video and online display in addition to syndicating and monetizing content.

In January, Adaptive Medias was faced with a crisis when the company’s founder and chief executive, Qayed Murtaza Shareef, was arrested in a child pornography investigation. He was subsequently terminated by the company.

CEO of ad tech company Beanstock Media, Waltz had a close relationship with Adaptive Medias and was appointed acting COO by the company’s board. He immediately sought to ensure investors, clients and employees that despite the charges filed against the company’s founder, the reputation of the company remained intact.

He reports that no clients or investments were lost and Adaptive Medias remains fiscally sound.

Today, ad tech is a multibillion-dollar industry on the cusp of expansion. Independent tech researcher Forrester estimates U.S. advertisers will spend $103 billion in digital advertising in 2019, surpassing ad dollars spent on broadcast and cable television.

With more than 20 years of experience in the industry, Waltz sat down to discuss ad tech trends and where the online world is headed. His answers were edited for length and clarity.

Q. Can you define advertising technology in your own words?

A. Ad tech is the industry built around the delivery, the recording and management of digital assets for advertising. As media in general becomes digital, there’s measurability of the ads displayed. Unlike a billboard when you drive by, you can actually tell how many people a digital ad reached. You can tell how long they saw it, what they did with it, if they interacted with it, clicked on it engaged with it in some way. Advertisers can make different decisions about which ad to show you versus me, even if we visit the same site. When you consume content, read articles or watch videos, there’s an opportunity for the media you are consuming to be monetized and paid for by advertising.

Q. How do ad tech companies collect data to target consumers?

A. First of all, an ad tech company might have a proxy for an individual but they don’t know anything about the person like their name or address. What they might know is that your device has a certain behavior, but it’s all anonymous. What happens, at least on your computer, is an anonymous number file called a cookie allows browsers or applications to see the website you visited and store it, and then whichever server sent the cookie, can actually read it again. Maybe you went to Kelley Blue Book, so we know you may be in the market for a car. That’s really important information for me. If you now move on to GQ magazine, then I can send a targeted ad to that page. And that’s called behavioral targeting, a very powerful thing that you just can’t duplicate in offline (advertising).

Q. Why are advertisers choosing digital technology over traditional advertising methods like television or print?

A. The ad tech industry has really evolved and innovated around making the ad-buy as efficient as possible by avoiding the wasted ad impressions that the offline world has been saddled with for such a long time. There is a famous quote in advertising that “every buyer or advertiser knows that 50 percent of the advertising they pay for is wasted but they just don’t know what 50 percent it is.” With digital, you do know, and that’s the brilliance of the digital economy that’s emerged now. The advertiser can adjust their spending to get in front of the consumer at the right time and avoid wasted spending.

Q. What is one of the biggest ad tech trends in the industry right now?

A. Cisco recently released a report that in four years 75 percent of all mobile online traffic is going to be video. It’s already happening, and we’ve seen that to be the case too.

Facebook feeds, for example. You might see video start to roll. That’s something fairly new in the last year or so. It’s a lot easier to click on a video that has both sound, motion and visual appeal rather than a static ad that moves around in a box. In the past, you might be on the computer in the workplace and the last thing you wanted to do is to have some big video play in front of everybody, but now you can play it in your car, on a trip, at the dinner table, anywhere because of the accessibility of the mobile device.

Q. What types of online content sites are trending?

A. Because of social sharing today, content publishers can get their content shared and passed very easily, which gets traffic back to their site. That’s how they get ad-views as well. There’s a growing trend of websites that create Top 10 lists – things like the “Craziest Things to Do in Orange County” or the “Weirdest Hair Styles.” People love to consume these easy lists. It’s an entertaining thing. There are whole websites now just for that purpose to create Top 10 lists.

Q. How can advertisers with limited budgets take advantage of ad tech?

A. The good news is that having a $1,000 budget for advertising would have been really hard 10 years ago. There would be minimums, and you’d have to talk to sales people, you’d probably end up placing it all in one place and it probably wouldn’t work as well. Today, you can do it on a per-click basis or a per-view basis with almost any amount of money. It’s almost overwhelming how easy it is and what kind of choices you have as a buyer today. But it’s also way easier for anyone to manage – in regards to their budget – the effectiveness with today’s technologies.

Contact the writer: [email protected]