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Thought Leaders in Big Data: Interview with Andy Nibley, CEO of Yieldex (Part 5)

Posted on Wednesday, Feb 27th 2013

Sramana Mitra: Given that we now understand what you do, I am going to switch gears a bit. From where you sit, what do you see as major open opportunities or unsolved problems that entrepreneurs who are looking for new opportunities should be digging into?

Andy Nibley: I think in the ad tech space, a lot of traditional publishers are seeing their legacy and revenue streams collapsing quickly. They need to find a way to increase revenue and try to replace some of the revenue they are leaking from their legacy businesses. This is true for newspapers, broadcasters, magazines, and so on.  Any company that can help them find a way to extract as much value as they can from their digital inventory is welcome.

Also moving very quickly right now, aside from display, which has been growing from quarter to quarter (very healthy double-digit growth) is mobile, which looks like it is going to grow much faster than display. Some of our clients have seen more than 15% of their inventory going into mobile. Online video is also growing very rapidly and has very high CPMs. Entrepreneurs who can help figure out those two markets will do well.

Mobile in particular reminds me of the display market 10 to 15 years ago. It is a little bit of the Wild West right now, standards haven’t been adopted, and so on. There is a lot of inventory, and it is hard to figure out what is valuable inventory and what is not. Another issue is trying to figure out how much of it is going to be automated through real-time bidding systems or other automated trades vs. how much is going to be directly sold. Firms are needed that can help publishers channel-manage so that they understand what they should be selling and where through that sales channel.

The ultimate vision of Yieldex, the way I see it, is thus: a publisher has an impression, and what they want to know is if they should sell it themselves, if they should put it on a private exchange, if they should give it to an ad network, or if they should give it to a platform. They ask, “What should I do with that impression to maximize revenue? How do I manage all those sales channels to get the highest yield possible?” Publishers that figure that out will do very well. I think the big data trend will continue, and it is going to require firms that can look at enormous amounts of data and help advertisers to get as granular as they want to in terms of buying audience, and also help publishers understand on a granular level what audiences they have to sell to.

SM: What have I not asked you yet that is interesting and worth discussing in your story?

AN: There are a few areas. One is view-ability. Advertisers are particularly interested in buying ad impressions that users actually see. There are a couple of factors that go into that, like the ad impression that we call “above the fold” or “on the page” so that the viewer doesn’t have to scroll down. How long does the viewer see that impression? Is he or she on the page long enough to recognize it, and how large is the ad? There are a lot of factors going into this. Those standards haven’t been set yet, but I think they will be over the next year. That is something that is going to be big to watch.

I think this trend of brands themselves becoming publishers is an interesting one. If you look at the comScore 100 right now, a lot of companies are starting to make a lot of money from selling ads themselves. I also think that the creative side of the business needs to grow at the same rate as the data side of the business is growing. TV is driven by creators, and display is not. It is better than it used to be, it is more engaging than it used to be, but I think the industry as a whole has to come up with different ad sizes that are engaging and creative. That will get advertisers to pay more and users to look at the ads more. The trend, and we are seeing this already, is that the agencies that create visions will also be creating advertising content, leveraging their expertise in content to produce stuff that will be more compelling to publishers than what ad agencies can provide at this time.

SM: I would like to pursue one topic that is partially related. It takes into account a lot of the technologies you are using – it kind of springs off the trends you talked about. I wrote an article in 2007 that presented a formula for Web 3.0. I said, “Web 3.0 was going to equal 4C + P +VS.” The four Cs are context, content, commerce, and community. P is personalization, and VS is vertical search. Anybody who is creating a compelling web experience will have to think along those six dimensions: context, content, community, commerce, personalization, and vertical search. You have talked quite a bit about these retailers becoming publishers, which is commerce companies moving to integrate content in their fold. Part of what is happening concerns relevant content that tends to also generate a tremendous amount of organic search engine traffic. That is driving some of the move toward commerce companies bringing in content on site. Once they have that, they start selling ads. That is the progression. How do technologies –particularly big data and machine learning – affect this progression? Because to do solid personalization, you need big data and machine learning technologies to come together.

AN: You do. I think the big winners in this space are coming from lots of different angles. First off, you have to deal with an enormous audience, and that is a huge competitive advantage. Look at Google, which built its audience out of search and is now trying to move into the other attributes you were talking about. Look at Facebook, which has a billion users. They came out of a community and are now trying to get into search and context. Then look at a company like Amazon, which came in from the e-commerce side and has an enormous amount of data on what consumers have purchased and what they want to purchase. Now they are looking at the rest of the blanks. I think your model is right. Obviously, it was prescient back in 2007. I think the big players are all moving in that direction. Whether they are successful will depend on whether they can do things outside of their domains – how they grew up as companies. I hope that answers your question.

This segment is part 5 in the series : Thought Leaders in Big Data: Interview with Andy Nibley, CEO of Yieldex
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