AppNexus Acquires Yieldex!

March 18th, 2015

I could not be happier to announce that AppNexus has agreed to acquire Yieldex. This is the culmination of years of work by an absolutely stellar team, and I am so proud of them all. Thank you, most sincerely, for your effort and camaraderie as we made this journey together.

Worth reading Brian’s post as well, with accompanying video:

What’s In Store For The Ad Tech Industry in 2015

January 12th, 2015

This post first appeared in MediaPost:

We all get inundated by the day-to-day minutiae of running our businesses in the ad tech industry, so it’s often surprising when a new year rolls around and we look up to see what we helped make happen. Here are a few of the bigger shifts we have seen over the last 12 months, and what might be in store for 2015.

The “Year of Mobile” Finally Arrived
After seven or eight years of next year being the “year of mobile,” last year actually was the year of mobile. Facebook mobile ad revenues passed desktop ad revenues. More people connected to the Internet via mobile devices worldwide than on desktops, according to comScore. Most new startups are “mobile first.” What’s interesting is that despite the growth, the industry is still grappling with the implications of this shift. Loss of cookies as an identifier, the difficulty of telling stories on small-format screens, and the fragmentation of apps all present challenges for 2015 and beyond.

Native Advertising Becomes a Preferred Ad Format
One way that publishers have begun capturing meaningful revenue on mobile devices is through native advertising. Once a Facebook-only format, dozens of top publishers have redesigned their sites to endless scroll formats that incorporate native ads, because they are much more valuable to brand marketers than banners. In 2015, we should see native advertising continue to grow and begin to mature into a more predictable and scalable ad format, as the providers incorporate tools to provide forecasting and guarantees.

Publishers Dig Deeper Into First-Party Data
Also in 2014, Data Management Platforms or DMPs finally went mainstream on the publisher side. While most advertisers and marketers have been capturing data for years, publishers are just beginning to capitalize on the trove of data they possess. In a world where context is increasingly commoditized, publisher first-party data has become a key differentiator to command higher value for publishers and marketers.  In 2015, we should see more marketers using both publisher and marketer data together to improve outcomes.

Transparency Helps To Combat Ad Fraud
Ad fraud finally became obvious as an industry-wide problem in 2014. Particularly in open-market RTB exchanges, statistics as high as 60% fraudulent impressions have been cited. Viewability metrics have been pushed hard by the IAB and the MMC to help combat certain kinds of fraud, but ultimately even they admitted the technology isn’t there yet. If we can continue to shine a bright light on this problem by increasing transparency, this is an area where we should see substantial improvement in 2015.

Video Explodes With Demand Exceeding Supply
Video as an ad format, whether on mobile or desktop, has finally begun tempting TV brand buyers onto the internet. Video grew dramatically in 2014 and should continue to explode in 2015. Video is often the only format where demand exceeds supply for many publishers, and thus the majority of the sales have been up-front guarantees and not RTB. Improvements in programmatic capabilities, especially automated guaranteed buying, should contribute greatly to this growth.

Automated Guaranteed Goes Mainstream
Speaking of automated guaranteed, 2014 seems to be have been the year of testing, and 2015 is shaping up to be the year where automated guaranteed buying comes into its own. We are starting to see publishers requiring buyers to use automated guaranteed channels for certain kinds of buys in order to reduce costs. More importantly, we are seeing big brand buyers mandate that publishers accept automated guaranteed buys through standard APIs in order to consolidate reporting. 2015 should see dramatic growth as publishers and buyers realize the efficiencies from automating routine tasks.

IAB Unveils Standard API For ‘Programmatic Direct’ Trading

November 4th, 2014

The following article appeared in MediaPost on November 3, 2014.  Read the original article here!

Just over one year ago, news broke that AOL, Microsoft, Yahoo and Yieldex had agreed to come together to adopt  “programmatic direct” as their trading method of choice and worked to create a standard API — dubbed OpenDirect — for the programmatic trading of premium inventory.

This morning the Interactive Advertising Bureau (IAB) released the official API, OpenDirect 1.0, for public comment. MediaMath and Bionic Advertising Systems joined AOL, Microsoft, Yahoo and Yieldex to develop the API specifications.

“Programmatic direct,” also sometimes called “programmatic premium,” is a hybrid trading method involving both direct sales tactics and automation.

The IAB’s OpenDirect 1.0 specifications can be read in full here. It’s over 100 pages long, so we can’t cover it all in this space. However, the IAB highlights two things that “should be noted,” so we will highlight them here:

“The API takes an advertiser first approach,” the document reads. “Both advertisers and agencies must sign up with the publisher and receive credentials. Advertisers may perform their own buys or provide consent to have an agency perform buys on their behalf; for an agency to perform buys on behalf of an advertiser, the advertiser must provide consent. The process of signing up and providing consent is publisher defined.”

In addition: “To book a line, the line must have a creative assigned to it. The creative may be the actual creative that the advertiser plans to run or a placeholder creative that is later replaced with the actual creative when it becomes available. However, the line will run with whichever creative is assigned to it (the actual creative or placeholder creative).”

The IAB contends the specifications will increase workflow efficiencies for publishers, give them greater control of packaging, pricing and delivery of inventory and give them a realizable way of automating reserved inventory.

For buyers, the IAB says the standard will provide access to biggerpools of unique users, increase efficiency by using just one APIintegration across multiple publishers and allow buyers to bookguaranteed delivery and access to media offerings that are notavailable on an exchange.

“This common set of API specifications sets the stage for direct programmatic ad sales and will allow buyers who want to access guaranteed inventory via automated processes avoid multiple, costly, custom integrations,” stated Scott Cunningham, VP of technology and ad operations at IAB.

OpenDirect released to public!

November 3rd, 2014

After more than a year of work, we finally released the OpenDirect standard to the public. Whew!

Here’s the official press release from the IAB, including the following money quote from yours truly: “We are excited to unveil the work we’ve been doing with AOL, Microsoft, and Yahoo to further our collective mission to make it easier for all premium publishers to increase efficiency and grow revenue,” said Tom Shields, Co-Founder and Chief Strategy Officer, Yieldex. “This standard will enable agencies to efficiently and easily buy premium inventory from some of the industry’s most desirable properties.”

They have a resource center at, which has the full spec and commentary.

Here’s a nice explainer article. And MediaPost covered it as well.

Now we just need to get everyone to implement it…

Choose The Right Kind Of Programmatic Direct For Each Deal

October 4th, 2014

This column appeared in AdExchanger on October 3, 2014.  You can view it here.

Programmatic direct is the fastest-growing area of digital advertising, with both publishers and advertisers flocking to set up programmatic direct relationships.

It works for publishers because it gives them more control over which advertisers are buying their inventory at specific prices. And buyers like it because it gives them transparency to see the inventory they are buying from which publishers.

Programmatic direct is generally agreed to mean any deal that is negotiated or transacted directly between the buyer and the seller, but executed through automation. This is a broad definition encompassing several different kinds of deal terms, including automated guaranteed, preferred deals and private exchanges. The challenge for publishers is to make sure they are using the right kind of programmatic direct for the right deals so they get full value for their best placements.

For publishers, there are clear advantages for either private exchanges or automated guaranteed, depending on the deal. For example, if a health-care site is negotiating with a pharmaceutical company, the site already has the audience the buyer needs. In this case, an automated guaranteed deal would ensure the pharmaceutical company gets the specific placement and audience with low risk, at a negotiated price. If they tried to use a private exchange, they risk not filling their budget.

On the other hand, if a buyer is looking for their own audience in a premium context, such as a credit card company retargeting existing cardholders with a special offer, then a private exchange might make more sense for both sides. The publisher could get higher CPMs for inventory that would otherwise have gone to a remnant channel. The buyer could get exactly the inventory they wanted, with the full knowledge of the placements from the publisher.

One other form of programmatic direct, the preferred deal, seems to be the worst of both worlds for the publisher. The price is fixed, so there is no upside potential for the publisher, but the volume is non-guaranteed, so there is only downside risk. To avoid this situation, smart publishers are converting all of their preferred deals into private exchanges or automated guaranteed deals.

The fundamental difference between automated guaranteed and private exchanges is the risk acceptable to both sides. Most publishers work to reduce the risk on their revenue stream, managing to a goal of 60% to 80% of their revenue from predictable sources, such as upfronts and guaranteed deals, and the remainder from the “spot” market where there is both upside potential and downside risk. This requires managing the mix of deals they do. When a publisher is negotiating with a buyer, they should ask themselves these questions:

  • Is the inventory they want highly sold through or scarce?
  • Does the buyer want predictability and forecasting on delivery?
  • Are the audience targets based on publisher data or geotargeting?
  • Is the buyer contextually related to the site (endemic)?
  • Does the buyer have a brand objective vs. a direct-response objective?

If the answer to any of these questions is yes, then the publisher should be negotiating an automated guaranteed deal.

For example, most publishers find that their video inventory fits these criteria, so they only sell it with a guarantee. As they move to programmatic selling, they don’t want to give up the predictability and low risk of this revenue stream, so they should target automated guaranteed deals. This is the case unless the buyer is willing to pay a risk premium with significantly higher CPMs. Giving the buyer the ability to pick only the impressions they want is just like letting someone pick all the M&Ms out of the trail mix. Don’t let them get away with a discount just because it’s a private exchange.

The digital advertising world is moving to a more programmatic future. Publishers who manage their risk and choose the best programmatic deal types will be the ones that prosper.

Baking Bread In Online Ad Sales

January 12th, 2014

The following post first appeared in AdExchanger.

Being a premium publisher these days is a lot like being a baker.

If you’re a baker, your content is bread. You craft fine, high-quality bread with organic ingredients, made with patience and care. Your customers love your bread.

Your bread is so good that party planners are valued customers. The planners will often start with a custom-baked “centerpiece” loaf. They also want a number of high-quality loaves and rolls for the meal, and may fill out their basket with some croutons or breadcrumbs. You, the baker, are happy to supply all their needs, but you make most of your money on the centerpiece and the high-quality loaves.

The world changes, though, and some planners don’t have time to go to your bakery any more. They find it more convenient to go to buy cheap bread at the supermarket. Supermarket chains – or retail networks – buy some of your artisanal loaves at rock-bottom prices, then mark the price up to resell the loaves on a shelf right next to cheap bread. You remove your name from the label to avoid cannibalizing sales at your bakery, but you still get just pennies on the dollar.

Worse still, the breadcrumb industry has exploded. Over just the last few years, the rise of giant rapid-distribution networks has enabled planners to buy tons of breadcrumbs at dramatically lower prices. Breadcrumbs still make up only about 15-20% of the entire bread market, but the growth is rapid, and you feel forced to participate. You sell your day-old bread into this distribution network, and again remove your name from the label, but you can’t even pay for your organic flour with the result.

What’s an artisanal baker – or a premium publisher – to do?

The first step is to understand what kind of bread you have to sell. Unlike most bakers, a surprising number of publishers don’t have a good handle on what they will have to sell next week or next month. Learn which bread is hot at parties these days, and which bread is just good for crumbling up, so you don’t give away the valuable loaves.

Then, pay attention to the best bread. Despite the growth of breadcrumbs, the party planners still want good bread. Most people throwing high-end parties (advertisers) want bread that is perfectly suited to the theme of their party, and different from the bread served at their neighbor’s party. They are willing to pay for it, as long as they can find it and buy it conveniently.

The breadcrumb sellers will try to convince you that their trucks are great for distributing your artisanal loaves, but there are an awful lot of pipes to connect and middlemen to pay. And the planners who buy tons of crumbs often don’t control the budget for buying the loaves too. You need a direct connection to your planners, one that enables them to buy from you easily and quickly, but still gives them your best bread, at a fair price.

Similarly, programmatic buying is changing the digital advertising landscape. But programmatic doesn’t need to commoditize your inventory into a pile of crumbs. Invest in systems that show you how much you have to sell, and what kinds of bread are valuable. You spend a lot of time and energy whether you’re baking bread or building content. Don’t just crumble it up.

What Google Glass is good for

August 12th, 2013

So far, it’s good for a quote in Forbes magazine, which actually pretty good. Here’s the relevant paragraph:

Being able to pull up all kinds of facts in a hurry would make Glass compelling both at work and at play, adds Tom Shields, founder and chief strategy officer at YieldEx, an advertising analytics platform for digital publishers. During a family weekend at Lake Tahoe, Shields says he was delighted when Glass could provide instant answers about which actors and actresses started in famous movies — and annoyed when the Google gadget turned out to be the most slow-witted presence in the room.

I’ve had it for a week or so, and I’d say it’s still more of a party trick than a real product, but that’s why they are calling it a prototype. Sure will be interesting to see what the killer app(s) turn out to be.

A Discussion of Programmatic Direct

July 3rd, 2013

I had a nice conversation with one of Skip Brand’s folks about Programmatic Direct, and they captured it nicely in this post. I’m still beating the drum – along with many others – that RTB is not taking over the world, despite the number of column-inches devoted to it. I got a couple of nice kudos from folks on twitter, including this one:

Let’s Not Expand ‘Programmatic’ To Include Everything

March 1st, 2013

This article originally appeared in AdExchanger

Over the last three months, the word “programmatic” has been featured in the headlines of dozens of articles, and each one seems to use a different definition. This confusion was a central topic this week at a packed Town Hall held at the IAB’s Annual Leadership Meeting. Is programmatic just for RTB, or does it incorporate direct relationships? Does programmatic include guaranteed impressions, or guaranteed CPMs, or both? What emerged was a consensus that “programmatic” is being used to describe at least two completely different things: RTB, and process automation.

Most people think programmatic equals RTB, and despite heroic efforts by Legolas Media’s Ran Cohen and others to redefine programmatic to include non-RTB delivery, nearly everyone still thinks of programmatic and direct delivery as opposites. Scott Spencer at Google defines programmatic in an RTB context: “In programmatic, the buyer gets to determine what inventory they get,” whether the price is directly negotiated (like a private exchange) or an auction. AppNexus’ Andy Atherton points out on his personal blog that this is a one-way guarantee – the seller guarantees to provide impressions, but the buyer doesn’t guarantee to take them.

The confusing part is when people also use “programmatic” to refer to automation and standardization of the operational processes involved in executing a buy. Standard direct-sold buys, the kind that Meredith Levien refers to as “transactional RFPs“, have cried out for execution protocols for nearly a decade. Of course, process automation can apply to negotiated programmatic buys as well, as the fulfillment process is often arduous. One publisher (who shall remain anonymous) recently lamented the effort it took to execute private exchanges, telling me “programmatic buys are the most manual part of our process.”

If programmatic didn’t already have a strong association with RTB, it would be a good term for this, but given that execution process automation can apply to both RTB and direct buys, overloading “programmatic” just adds confusion and slows adoption. I would submit that “automated” is a better word. Automation implies server-to-server connections and operational efficiency, and can be used to execute buys that are either direct (e.g. Automated Direct) or programmatic (e.g. Automated Private Exchange).

Automated Direct and Automated Private Exchanges are both very exciting areas of innovation today, and I look forward to seeing dozens of other articles explaining them in the future. As ad technologies become more sophisticated, we need well-defined terms to cut through the confusion and grow the market for everyone. Let’s not try to expand “programmatic” to include everything, or the term will become as meaningless as “premium” has become. Instead, let’s keep “direct” and when it is automated, call it Automated Direct.

I also got some nice tweets:

Are Ad Sales People Obsolete? No!

February 18th, 2013

Got this question from Adotas, and answered it along with a few other folks. Here’s my answer:

“Ad sales people bring unique value from premium publishers to smart marketers that an algorithm cannot duplicate. The ad sales people know their audiences best, and can craft packages and placements that are more valuable to the marketer than a few cherry-picked impressions. Better yet, marketers can work with sales to take advantage of first party data, both implicit and explicit, that would never be available on an exchange. Algorithms are great for bottom-funnel direct response outcomes, but as long as ads are designed to affect human emotions, we’ll need humans at both publishers and agencies to craft and place them for maximum effect.”

What do you think?