Programmatic 1x1: Michael Sturm

Firstly, thank you to all those who are following "Programmatic 1x1." I hope this is helping some of you to move at least a step towards programmatic adoption. In the last one month I personally have been meeting and talking to many buyers and sellers in this space. Going by the current rate of adoption I think, India as a market is setting the base to be one of the fastest growing markets in terms of Programmatic spends and will contribute significantly to the APAC pie in 2016. 

Today's Programmatic 1x1 is with Michael Sturm who runs the ASIA business for ADTECH/AOL Platforms.

Programmatic 1x1: Supply Side Technology

Michael Sturm, MD – ASIA, ADTECH/AOL Platforms

1. When did you first get into Programmatic advertising? What were your first thoughts about it and how has it changed over the years?

•  I got involved into programmatic in 2007 when we created a self booking interface for advertisers and agencies into our ad server.
• I believe we can call this programmatic 1.0. Meanwhile programmatic got a heavy buzz word and everybody is talking about it. There are so many different opinions as people who talk about what programmatic means.
•  Programmatic is automation. It optimizes the process with the help of technology.
• For instance, Henry Ford revolutionized the Auto industry by automating the production with the help of machines.

2. How can it help a Publisher?

Publisher needs to understand that the Supply Side Platform (SSP) is not competition to the Direct Sales.

• We are and will continue to be a people and relationship driven industry.
• The SSP is like a second sales team. It ensures efficient yield management. We have our own Ad server and started the SSP as a forward integration strategy.
• Also it has some useful features which are a much needed solution for the Premium publishers for sure.
• For instance if the direct sales team has got a campaign from Pepsi, and if the Publisher has agreed to sell some inventory on the SSP on the open exchange there is a possibility that an ad of Coke shows up. This is not a healthy situation for both the brands and the publisher. Hence the SSP also provides features like inclusion and exclusion.

3. With Programmatic coming in, will the Publisher no longer need a Sales team?

No. They will always need a sales team.

• Publishers who do not have a direct sales team and are relying on Ad Networks or Sales house will move towards Programmatic adoption.
• The Premium publishers will always need their Sales team who will continue to build, maintain and grow the relations. They will ensure there are monthly/yearly deals happening. They will create opportunities for sponsorships.
• Sales on an average fill up 40%-60% of the overall inventory. For an efficient dollar value of the remaining inventory the Publisher can adopt the use of SSP.
• This will avoid situations where there is inventory being sold to performance campaigns at very low CPM’s and will lead to 100% monetization with good yields.
• The Sales team will always be needed. The machine can’t take the client out for dinners :)

4. What are they various ways a Publisher can sell his inventory programmatically apart from RTB? Please share some of the latest trends.

• RTB continues to be the biggest part of the Programmatic pie. Currently in the US, Open RTB is 50% of the Programmatic market and remaining 50% is Static deals which also includes Programmatic Direct.
• Static deal means fixed price bidding.
• For instance, in situation A you have a fixed bid of $2 and agree to buy any inventory for that bid. In situation B which is Open RTB you have a pre-determined minimum bid $0.05 and maximum bid $5.00. Here you will win inventory based on second price auction model.

Preferred deals are on the rise and this is all relation driven and people are needed for this. The sales teams sell and negotiate the deal with the agency or the advertiser and execute the Preferred Deal programmatically.

 5. How will the Publisher sales team sell their inventory programmatically? What changes?

When Henry Ford had introduced the machines to make cars everybody thought and said that people will lose their jobs. The fact is that people don’t lose jobs, but the jobs change.

• So is the case going to be with Programmatic. The Sales folks will not lose their jobs, but their jobs will change. It will become more of a Relation management role. The job will be to ensure that the given client is spending the forecasted ad dollars and in return getting the ROI. It could be through any channel.

 6. How can Publishers make money from data?

• This is a tricky question. Everybody is talking about data and want to make more out of their data. But to make more out of data I would suggest to stop collecting tons of data and instead try to understand first what kind of data is needed. Start with simple questions: who are my users? What are my users interested in?
•  Once you cleared this and collected this dedicated data you can start generating new users, showing them the right ads and making more revenue.

 7. Apart from NA and UK, which are the other markets who are adopting Programmatic rapidly? How crucial is India as a market for Adtech?

• There are some markets which are highly under-rated.
• For instance, Germany as a market has very little acceptance of Programmatic. But there is huge potential for it to grow. Poland is growing rapidly.
• In APAC, Indonesia is going to be key market. It's growing fast and is ahead of many others. India is quite far but has huge potential given the talent in the country. Malaysia is slow but developing. Singapore is ahead in the curve but a very small market.
• Japan and Australia are the leading markets in terms of Programmatic in APAC.

8. What is your message to Publishers and Advertisers who are resisting Programmatic?

• Few years back in Germany I was at Ad Manager Forum which is a conference for the people in the Ad operations. I gave a speech on Programmatic. Later on when we all were networking, there were people coming up to me and saying that because of Programmatic they will be losing their jobs.
• This is the biggest fear people have even today. The truth is people will continue to be needed in this industry. Just that the jobs will change. For instance the ad operations person will become a yield manager.
• Today there are millions of people working in the Automobile factories. The jobs have changed and evolved but people are required to do the jobs.

 Thank you so much Michael for becoming a part of this initiative. Thank you all for reading this. Please feel free to share your thoughts.