Commentary

Real-Time With De Telegraaf's van der Meij

De Telegraaf, a Dutch daily morning newspaper, has been using RTB to buy and sell their ad inventory since 2009. As an early adopter in the real-time space, De Telegraaf has set the example for European publishers to follow. De Telegraaf has their own bidder and uses Rubicon Project as a supply-side platform to integrate with all the demand-side platforms and agency trading desks.

Martin van der Meij, head of commercial development at Telegraaf Media Group, spoke with RTM Daily to give some advice to those in the space, shed some light on the role Europe will play in coming years, and explain how De Telegraaf has overcome challenges with RTB.

RTM Daily: Can you give us a brief history of RTB at De Telegraaf? How it started, and how it has grown?

van der Meij: We started advanced yield management of our inventory back in 2009. When we began to pay attention to our secondary channel, like many major European publishers, we also started selling performance campaigns ourselves. We realized that it didn’t make sense to offer certain sales propositions using our secondary channel but not make these products available for our own direct sales. We believe that yield management is about optimizing from a holistic point of view, so we decided that performance campaigns sold by our own sales team should be optimized against the networks. So, in the summer of 2009, we started to both sell and buy our own inventory through RTB.

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RTM Daily: Why did you decide to utilize RTB? What did its potential mean to you versus other methods of selling your inventory?

van der Meij: As a buyer of our inventory through the RTB mechanic, we noticed that we could boost yield for our non-guaranteed inventory in the open auction. It simply created more competition for the inventory. So we started to look at other divisions within our company and started a pilot with hyperlocal advertising. The more we started to operate as a buyer, the more we wanted to be able to make the buying discussion on a per impressions basis. As a seller we saw how competition could drive up revenue.

So as soon as we had RTB available as a seller, we switched our technology as a buyer (Telegraaf used Appnexus in 2010/2011 and now have built our own bidder). As soon as we saw the limitation as a buyer, we could scale the availability as a seller. We basically could adjust the market both ways and could optimize on how we used RTB on both sides.

You might ask how this impacted our sales teams? The sales team who was in contact with direct advertisers gained the most profit out of our early stage involvement with RTB. This team transformed from a traditional CPM sales house into a high tech publisher trading desk. We now offer our traditionally sold advertisers anything from branding, content integrations, sponsorships ánd high quality performance campaigns within a brand safe environment – all programmatically delivered. In summary, we found additional revenue from new advertisers.

RTM Daily: Looking outside your role as publisher, what does RTB mean for all involved, including consumers and ad sales teams?

van der Meij: Automated trading is about connecting advertisers with consumers in a very effective cost-efficient way. Please let's stop making a big deal out of it! We didn’t even invent it in the advertising industry - we just made it very complicated using new buzzwords every other week.

RTM Daily: The whole topic and process can become very confusing. What can be done to make programmatic "easier" for people to use?

van der Meij: It is not confusing or complicated. You have an advertiser on one side (who wants to buy advertising space) and a publisher on the other side (who wants to sell advertising space). There are just way too many parties involved between those two sides. A relationship between two people can already be complicated - imagine if there are more involved! From an advertising perspective, we used to sell advertising space per thousand - now we’re just selling the same space per impression.

RTM Daily: What are some lesser known RTB strategies you've learned over the years?

van der Meij: People focus on technology. Publishers focus on technology. And everyone considers it something you do next to your current business. As I said before, RTB or automated trading is just the evolution of ad-serving. It’s still the buying and selling of advertising space. This means it is your core business; the new foundation of how advertisers and publishers conduct business.

RTM Daily: What challenges has De Telegraaf encountered with the technology? Have any been potentially debilitating to the company's RTB strategy?

van der Meij: The involvement of venture capitalists is still the biggest challenge and potentially the biggest negative impact on everybody’s automated strategy. Most companies in the ecosystem are built with a focus on their exit strategy. They solve one piece of the puzzle and they operate on behalf of their investors, not their clients. Technology is built on scale rather than on quality. Simple but crucial features are missing because they don’t contribute directly to their business model. The whole market is operating on revshare, meaning you pay a percentage of the revenue to the technology vendor. This makes it very hard to use automated trading beyond low CPM (performance campaigns).

RTM Daily: How did De Telegraaf overcome these issues (or how is the company in the process of overcoming)?

van der Meij: Our current technology stack is flexible. We’re moving in the direction of having a hotswap stack. Our set-up consists of several vendors and we’re able to switch easily – handy if any of our partners are acquired by a competitor of ours. We try to gain control over technology so we can add these features we need as a publisher. We started with having our own (white-labelled Platform161) DSP and we invested heavily in a retargeting product which will launch in a few month’s time that’s more evolved than anything we could find in the market. We select vendors based on partnership possibilities, instead of current features, and we selected the Rubicon Project because they are the leading independent SSP.

But most important of all is that we acknowledge that change is a constant factor these days, so we made adjustments to our organization. Big publishers and big agencies just do not have the structure to operate in a field that is changing all the time. The transformation towards more automated trading is not lead by our sales organization or ad operations. I report directly to our online COO and publisher.

We also got rid of any fears of cannibalization. Sales targets are based on advertisers; not channel and not technology. Our entire sales organization benefits from the shift to automated trading. It’s much more workflow efficient, giving them time to focus on additional revenue and high value, high impact creative executions. Our ad ops team is being reorganized into a trading team. We want to have all knowledge within our company.

RTM Daily: Where does RTB go in 2013? 2014?

van der Meij: For us 2013 is all about video/mobile and the roll out automated trading to the agency world. Standard IAB formats don’t need to be purchased on an IO basis anymore. No more faxes and sending of reports, creative, tags, etc. Custom ratecards are created using DealIDs (which are basically automated trading IO’s). We’re also spending quite some time on our partnerships. It is said that the Dutch market is more advance than others - we think it’s also in our interest to help out other publishers across Europe. We’re talking to the World Association of Newspapers and News Publishers, for example. Automated trading is affecting all their members. They should know what’s coming before it hits them!

For 2014 we’re doing research. But its fair to say that for Telegraaf Media Group it seems it will be about two things; building the bridge towards publisher tools and mass
customization.

RTM Daily: Will it look any different in Europe versus the U.S.?

van der Meij: Yes. I think that the Europe will take the lead. Why? Because automated trading right now is about efficiency and because European publishers have higher operational margins than the US. In Europe advertising budgets are smaller than they are in the US. So Europeans are adopting automated trading across the board sooner than in the US. This might even lead to the situation where US technology isn’t sufficient for the European market anymore.

RTM Daily: Thank you for your time. Any finals remarks on where RTB stands?

van der Meij: RTB is still a toddler. We’ve just started. It will take years before we see the true power of the trading mechanic is fully realized.

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