Happy Friday!
Welcome to the fourth newsletter, in a single month we’ve gone from 0 to over 2000 opens per week, thank you! This week has been action packed so the newsletter covers the key market making stories from the the buy, sell & client side.
On the buyside the big story is that DataXu is looking to get bought for a relatively low price. On the sellside there’s two big stories 1) Rubicon & Guardian have buried the hatchet 2) Three of the big six exchanges have signed up to standards that will make auctions fairer & more transparent. Rounding off the week we jump client side & look at the latest in-housing stats from the ANA.
Finally I shamelessly plug my first ever article on AdExchanger & the interview I did with Rubicon CEO Michael Barrett…
DataXu Is Looking To Sell
The markets have not been a friendly to AdTech of late, so it is perhaps unsurprising that DSP DataXu is said to be seeking the help of investment bank GCA to sell privately.
DataXu were an early mover in programmatic getting started in 2009. They have taken around $87m in funding since then, notably receiving $10m from Sky (Part of Comcast) two years ago as well as a large capital injection of $27m from venture capitalist Thomvest in February 2013.
They are said to be seeking $300m for the business, which seems low given that three years ago they were reported to be worth as much as $1 billion, however in recent times they have struggled to differentiate themselves vs Google & Amazon & also to keep up with the pace of innovation offered by independents like The Trade Desk. This & the challenging market conditions appear to be reflected in the asking price.
For those looking to understand the AdTech investment landscape in more detail Terence Kawaja’s presentation from this weeks AdExchanger Programmatic I/O event in New York is excellent:
The Guardian & Rubicon Settle Their Legal Dispute
Last Friday Lara O'Reilly of the WSJ (@larakiara follow her if you don’t already!) broke the news that the Guardian & Rubicon Project had reached a settlement in their legal dispute over alleged hidden fees:
In Q1 2017 the Guardian alleged Rubicon had charged non disclosed fees to buyers that reduced their revenue & they sought damages for a breach of contract as well as for “deceit and misrepresentation”. The Rubicon counter claimed it disclosed buyside fees in its contracts. The good news is both parties have agreed to move on, with the Rubicon project making the following statement to the SEC:
Over the past 18 months there has been a growing chorus of discontent from marketers around the levels of transparency in auction dynamics & fees across all exchanges, the good news is the sell side has responded this week with a 6 exchanges signing up to guidelines that will govern their behavior moving forward.
Principles For A Better Programmatic Marketplace
Programmatic is not perfect, but AdTech businesses are typically responsive to the demands of the market. Industry wide initiatives to cut fraud like ads.txt are one such example of this, initiatives that aim to make piracy a non profitable business another.
TAG is often a positive force for change, so it is no surprise to see they have worked with 6 exchanges to codify a framework that should make auctions more transparent, efficient & fair. These principles can be viewed in full here.
As you can see OpenX, PubMatic, Rubicon Project, Sovrn, SpotX and Telaria all signed up & the response has been positive:
To address the elephant in the room: Three of the big six are missing: Google, AppNexus & Index Exchange. It is not clear if they were asked to participate & chose not to OR whether they were asked & did not have time to participate, rumors on AdAge suggest this was a rush job spurred by recent spats in the trade press.
I hope with time that a) the three major exchanges that are currently missing sign up, as the initiative will be much more meaningful if they do, that b) There is additional clarity on how compliance is to be monitored & c) Some form of penalties for infraction is introduced, so infringement of the principles carries financial penalties. If the sell side & TAG can execute on this, I believe it will improve confidence & trust in the ecosystem.
The Latest ANA In-House Study
The latest study ANA report titled “The continued rise of the in-house agency” on the face of things looks terrifying for media agencies:
When you pick through the headlines you find a slightly less alarming story for media buyers as in house functions tend to be creative. Just over a third now have media buying functions in house (mainly email, search & social) with around a quarter (24%) running programmatic in house. This is very much inline with recent IAB stats. The benefits quoted for in housing are as you’d expect:
But in housing isn’t a silver bullet & it’s not all plain sailing. Digiday published two interesting articles this week on the challenges of in-housing programmatic trading specifically, one reports UK based Telco giant Vodafone are pumping the breaks on their project to in house this capability, the other looks at the hidden costs of taking buying in house
Whilst greater control & institutional knowledge will be very attractive benefits for some, the articles rightly point out a) that it’s hard to find talent and b) easy to miscalculate the time & effort required to execute to the level of a team of seasoned specialists. So whilst the agency model will doubtlessly evolve with changing market needs (as has always been the case) I’m bullish on the future.
Shameless Plug Time
This week I was featured in AdExchanger for the first time, covering the potentially devastating impact ITP-2 a Safari feature on all new Apple devices, will have on retargeting & attribution. To be blunt this guy is not wrong:
Safari has a 50% share of mobile browsers in the US so it’s worrying few people are talking about this. Beyond attribution it’s going to impact AdTech in general as Safari will now stop vendors cookie syncing, this means they will not be able to build match tables, full details here.
Second shameless plug: This week I published an interview with Rubicon CEO Michael Barrett on LinkedIn. He is unbelievably interesting & consequently it was viewed over 6,000 times in the first 36 hours. If you’ve not seen it, I’ve uploaded it to YouTube for ease of access:
We talk about their roadmap for the next 12 months, supply path optimization & trust and transparency, whilst the video was recorded at their EMEA summit on the 27th of September, it feels very fitting given the news this week.
Have a great weekend,
@SimonJHarris