Happy Friday 21.12.18

Happy Holidays !!!

Happy Friday!

The final newsletter of the year looks exclusively at the supply side. First we cover the sad news that OpenX has cut their staffing by around 20% & look at what the future might hold for them. Next a bit of a Happy Friday exclusive: My interview with PubMatic Co-Founder & Chairman Amar Goel, he talks through the future of the exchange and business models, very interesting stuff.

Speaking of new business models next we turn our attention to EMX who on Wednesday announced an exchange which plans to move fees to the buy side to boost transparency. We round off the final newsletter of the year with Pixalate’s predictions for fraud in 2019, they recently became the first business to be MRC accredited fraud detection and filtration in OTT environments so they have lots of interesting things to say on the subject.

The next newsletter will land in your inbox 11.01.2019, Happy Holidays!

Simon


OpenX Cut Their Workforce By 20%

Early this week news broke that supply side business OpenX has laid off around 100 employees:

That’s around 20% of OpenX’s 500 employees globally & it is reported that areas affected by the layoffs include engineering, human resources & account management. Beyond a staff cut, OpenX are hubbing their engineering resources & will announce some senior hires as they look to position themselves for growth in 2019.

OpenX is said top have been profitable for the last 5 years, but some have speculated that falling take rates & the declining win rates due to header bidding have challenged the business in recent times, good coverage on that here:

OpenX are said to be closing some ancillary services & will focus on TV & mobile specifically. I’ve got a lot of time for OpenX & I look forward to seeing where 2019 takes the business, hoping for good things, the ecosystem needs strong independent players on all sides of the auction.


PubMatic On The Future Of The Supply Side Platform

I had the pleasure of sitting down with PubMatic Co-Founder & Chairman recently for a festive edition of my VLOG

We talked about a broad range of topics including supply side commoditization, new charging models for their services & whether or not giants that straddle the buy and sell side will begin to Zero out their exchange fees:

Amar was both super open & generous with his time, so the VLOG runs a little longer than normal at around 17 minutes. It’s totally worth it though lots of razor sharp up to the minute insight from an industry leader, Enjoy!


Supply Side Transparency

This year we have increasingly seen calls for transparency from across the demand side, driven by the desire to know how much of an advertisers budget is going to working media.

As a consequence of this (& competitive factors) we’ve seen declining take rates & some businesses like Xandr restructuring their contracts with publishers, so they can share more than they could historically.

EMX have adopted a different tactic launching a transparent marketplace that will move fees to the buyside to ensure full clarity over fees:

Whilst buyers have always indirectly paid exchange fees through their bids, having the exchange fee sit on the buyers balance sheet is something new & changes the dynamic somewhat.

Whilst there are no clients piloting the transparent EMX platform currently, presumably scaled buyers like holding companies will be able to negotiate lower take rates & such economies of scale could offer an incentive beyond transparency for big advertisers to work with scaled buyers over smaller independents, it will certainly be interesting to watch this play out over the next 12 months.

It will also be interesting to watch how scaled incumbents will react to this move, will they follow suit? Or continue to work with publishers to revise contracts?

Beyond this changing payment models will further complicate SPO in 2019, which might frustrate some, but savvy buyers & potentially consultants (who in other domains are experts in supply chain management) will see this as an opportunity to help their clients make sense of the market.


Pixalate & OTT Fraud

In the US around 80% of households have OTT devices & some estimates have OTT spend hitting $50 billion by 2020.

This will create significant opportunities for fraudsters who typically target environments where there’s rapid growth and measurement and detection technology is comparatively weak.

With this in mind it’s good to see that anti-fraud specialist Pixalate has become the first to be MRC accredited for both IVT detection and filtering in an OTT environment:

They’ve found that currently fraud rates hover around 19% in the OTT space, a fair amount higher than is seen in optimized display and traditional video campaigns.

The business is predicting that in 2019 ads.txt for app environments will be adopted quickly which will help suppress rates of IVT in app like environments, which would be hugely welcomed by buyers and platforms alike.

Depressingly despite progress, Pixelate are predicting that in 2019 that double digit fraud rates will persist meaning it is more vital than ever that beyond measuring & filtering buyers use platforms that will offer refunds where IVT is detected. Their full set of their 2019 predictions can be found here & make for pretty interesting reading:


Okay that’s the last newsletter of the year done, thank you for your support over the last few months, I’m looking forward to writing the next newsletter already which will be in your inbox on the 11.01.2019 if you want to get in touch in the meantime, you can find me here:

Twitter: @SimonJHarris

LinkedIn: linkedin.com/in/simonjulianharris/

As always, if you think of someone who might like to receive next weeks newsletter ask them to sign up here: https://simonjharris.substack.com/

Thanks & happy holidays

Simon