Commentary

How Different Are The RTB Exchanges, Anyhow? Real-Time With ChoiceStream CEO Eric Bosco

I had the chance to speak with Eric Bosco, the recently appointed CEO of ChoiceStream, about all things programmatic. Our conversation ranged from real-time bidding (RTB) and programmatic advertising in general, to what the actual differences are between the different exchanges. We also touched on the potential dishonesty of supply-side players, RTB in mobile, and more.

Through their company changes (Bosco said 85% of their employees have been there for less than two years, and he himself has only been CEO for about two months), ChoiceStream has remained entirely focused on the programmatic space. Take a look below to see Bosco’s thoughts on a variety of industry topics. 

RTM Daily: How did ChoiceStream find a role as the world of real-time bidding developed?

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Eric Bosco: The way I saw the landscape in 2009-2010 was really a whole bunch of people trying to build the plumbing and the basic infrastructure. Companies like AppNexus and Turn just making the auction work - which is actually a really hard process.

What we thought about was -- what happens next? If you assume the plumbing is there, then how can you be the smartest buyer? We tried to pick people one by one to show them an ad, which is very compatible in a programmatic world.

RTM Daily: What has been the industry shift in terms of interest in programmatic?

Bosco: Programmatic really separates buy from sell. We are exclusively on the advertiser side and purchase on behalf of our clients. By the nature of our business, all of our current clients are involved with RTB.

In 2011, when we started having initial conversations, a lot of advertisers were saying, “We don’t want to do this. I like ad networks or direct buys.” That side has definitely been shifting. I think brands are becoming more comfortable with programmatic.

RTM Daily: There are a lot of exchanges out there. Are they really all that different when it comes to prices, speed, competition, etc.?

Bosco: There are a lot of differences but there are things that are very similar. I kind of feel that stuff like “faster speed” (on an exchange) is hyperbole. The data speed is plenty fast on all of the exchanges.

What ends up happening is [that because] exchanges are a publisher side construct...there are certain publishers that work with multiple exchanges, and others that only work with one exchange. And on the extreme side of that there’s something like Facebook and the Facebook Exchange.

From an advertiser point of view, as you’re trying to get your campaign results it ends up that some publishers work better than others depending on the campaign. Each campaign is its own animal, so to speak. I find it [relates directly] to inventory availability on each exchange [and the type of campaign].

I think there are some differences [between the exchanges] in terms of pricing. You do have some exchanges that have much higher clear prices, and other exchanges that have much lower pricing. This goes a little bit to the type of advertiser and the type of product they are selling and how the campaign is structured. Some advertisers are very much DR-focused and might have a little more tolerance with inventory or content that isn't super-top-shelf, so those advertisers end up doing better on exchanges that have a lower clear price.

RTM Daily: How many different exchanges do you operate on on behalf of your clients?

Bosco: Off the top of my head, we have around 7-8 we tap into. That doesn’t count some of the mobile stuff. Everything about mobile is slightly different, but we are just starting in that and it's a big focus for us late this year and early next year. [So counting mobile], 8-10 different exchanges.

RTM Daily: Do you choose the exchange to operate on for the advertiser, or do they tell you?

Bosco: So the way we position ourselves with advertisers is as a full-service solution. While the exchange environment is becoming easier to deal with, it's still a fairly complicated environment. We typically choose - actually, our algorithms choose - the exchange.

Having said that, sometimes the advertiser wants us to do specific things, and we will listen.

RTM Daily: Do supply-side platforms manipulate auctions?

Bosco: I certainly wouldn’t point fingers at [anyone in particular], but you absolutely do see the supply-side trying to do things to extract higher price points.

So something that happens pretty frequently to us is: we will be running a campaign, our bidder is finding out optimal bids, and we find some combination of users and inventory we like. After that, we want to get more volume, so little by little we bid a little bit more, but all of the sudden we realize the clear price is going higher.

So it’s almost like the publisher knows we are interested. [If so], it’s almost like shooting [themselves] in the foot because then our algorithm will [price them out] and forget about them altogether.

RTM Daily: What about publisher misrepresentation?

Bosco: You also of course see, which is a bigger problem, publishers that are trying to essentially misrepresent themselves. Most advertisers have a notion of brand safety that they care about. So what you see on the publisher side a lot of the time is “Oh, we got blacklisted...let us try to backdoor our way in. We’ll sell our inventory to someone else who can [hide us] to make it harder for the bidder to realize it’s us.”

Companies like DoubleVerify and AdSafe are doing a great service to the whole ecosystem because they provide a safety net to these kinds of tactics.

RTM Daily: You mentioned that mobile will become a bigger focus at ChoiceStream. What does your mobile plan look like now, and what will it look like in the near future?

Bosco: It’s been the “year of mobile” now going on close to 10 years, but it does feel like it really is the “year of mobile.” We go through the RFP process with agencies - and more and more those RFP’s are asking about mobile. From a business point of view, we really have a lot of upside to add on to our existing display business by adding on mobile. 

Our own personal problem with mobile is that a lot of the infrastructure that exists in the display world - especially with targeting and user information - is very immature in mobile. While some of the third party data providers like Bluekai are helping out in mobile, its availability is sporadic at best

What we want to do in mobile is come out with a solution that is at scale. We don’t want to have to tell clients they can only spend 1/10th of what they’d like to on mobile [because of scale].

So we are essentially going after our own data set. We are launching a mobile polling site and driving traffic towards that. We are building our own data that’s pervasive cross-channel that we can then target against. Our hope is by the end of the year to have that all available and at scale.

2 comments about "How Different Are The RTB Exchanges, Anyhow? Real-Time With ChoiceStream CEO Eric Bosco".
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  1. doug render from spotxchange, July 16, 2013 at 11:51 p.m.

    Great article.

    But you find anathema the idea that sellers might have the same access to market information that buyers enjoy? That they should understand which pockets of inventory are most in-demand and price it accordingly? That they should use comparable data and algos to monitor sell price, that you use to monitor bid price? I'm not sure that makes for a fluid marketplace. I think the market works best when both buyers and sellers have equal access to information.

    =Doug

  2. Bill Guild from ChoiceStream, July 17, 2013 at 9:45 a.m.

    Thanks for the comment Doug. We actually agree with your position. The two sided marketplace creates healthy competition, which is good for everyone. Exchanges should work to maximize profits for their publisher clients and they should use data and technology to do that as well as they can. Eric's point was that when exchanges boost prices on their side, our system detects that and takes it into consideration. If the price still makes sense for our client we will continue to buy. If the inventory has been priced out of our range, we will move on. Exchanges and publishers will certainly notice this and adjust in whatever way is appropriate for them. That's why this whole exchange thing is working so well for both parties.

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