'There Is No Ideal Balance' Between Humans And Machines; Real-Time With SiteScout's CEO Paul Mokbel

RTM Daily had the chance to interview Paul Mokbel, CEO of SiteScout, about a host of industry topics. We covered potential flaws in the industry that people brush off, myths, trends, and the balance between human creativity and machine efficiency.

Mokbel believes there is no ideal balance between human creativity and machine efficiency, and thinks programmatic buying will eventually comprise the majority of digital media sales. Check out the full interview to see all of his thoughts.

RTM Daily: Are people looking at real-time bidding (RTB) through rose-tinted goggles? Are there any blatant flaws that people generally overlook?

Paul Mokbel: RTB is undoubtedly the future of display advertising. While still in it's infancy, the efficiency benefits realized so far are tremendous. However, there are still a number of flaws that currently affect the industry. Industry standards like the OpenRTB specifications have been adopted by most players, however critical components have yet to be standardized.

For example, the ability to effectively create programmatic (i.e. API-driven) deals over RTB is not yet possible. This effort could be accelerated with the creation of new standards stemming from the cooperation of supply-side platforms (SSPs) and demand-side platforms (DSPs), which is beginning to take shape. Even though RTB is a marketplace between advertisers and publishers, there is no effective communication pipeline between the two parties, which requires a solution. These are just some trivial components that are less of a technical challenge, but that still provide immense benefits for all players.

RTM Daily: Similar to the above question, can you point out the most common myth about RTB? Particularly for someone interested in starting to trade this way?

Mokbel: Some people come into RTB thinking that this is going to solve all of the their media buying problems. This myth is particularity propagated by companies that lack in transparency and rely upon algorithms or tools that do everything for you. The truth is, RTB introduces efficiencies not previously available, and to that end, is far more practical than media bought in traditional ways. But, it still requires a sufficient degree of customer insight to target the right audience, and do so in an efficient and effective manner.

Another misconception is that RTB is mostly “remnant”, and by implication low quality. The reality is that this isn't always the case. For instance, a good amount of major (“Tier 1”) publishers have "first impression" inventory available through the RTB ecosystem. These are high-value impressions (priced much lower than direct buys), so the traditional “remnant” label is simply unfair and dishonest.

That being said, even in situations where the inventory might be remnant (in the sense that it’s unsold and later in the user session), the ability to test the performance of the inventory, without a traditional insertion order, is a huge win in terms of efficiency for advertisers.

RTM Daily: Enough with putting RTB down. What's the best thing about trading this way?

Mokbel: Like I just said, the best part about buying inventory with RTB is efficiency, plain and simple. And on a variety of levels at that: pricing, workflow, targeting, and scale. At no other point in history has it been this easy to reach an audience of hundreds of millions of people, worldwide, with targeted display advertising. It really is an amazing feat of engineering and innovation. The end result is that less human time is wasted doing manual tasks that machines can do better, and advertisers can instead focus on tailoring the best creative messages for their target audiences, wherever they happen to be online. 

RTM Daily: Is the nature of wanting or needing everything immediately good or bad for the industry?

Mokbel: The traditional process of establishing direct insertion orders with each publisher is laborious, time consuming, and sometimes risky, especially when performance metrics need to be met. If an advertiser is spending thousands of dollars on media per second, and the performance drops below acceptable levels, the advertiser is able to take immediate action. The alternative is being stuck with under-performing inventory until the publisher can be notified. Furthermore, the real-time nature allows for easier testing, which leads to better efficiency. At the end of the day, campaign budgets move too fast for platforms to be anything but real-time in nature.

RTM Daily: If the actual speed of the trading can't get any faster, where do we go from here/how does it keep improving?

Mokbel: We think there is still much more to come. Like I mentioned before, there’s currently no standard communication protocol between the advertisers and publishers. In a lot of situations, no communication is necessary. But when you’re trying to put together a private deal, where you want “first look” on specific inventory, or if publishers or advertisers want to extend specific terms (e.g. buying 1MM impressions a day, at a set price, on a first look basis), there needs to be some communication beforehand. Lots of buyers and sellers in the RTB world are not even aware that this is possible.

To make matters worse, establishing these deals can be arguably more intensive than a traditional insertion order (IO), since the buyers need to contact the DSP, and the DSP needs to call the SSP, then the SSP needs to call the publisher. So instead of two parties working out a deal, there are now four! The “piping”, so to speak, is there, which means private deals are already possible. But, once the standards are set for a more efficient process, the adoption will hopefully follow to make everything even more efficient.

RTM Daily: What are the up and coming trends/tactics nobody is talking about yet?

Mokbel: Mobile RTB is an interesting topic. There have traditionally been a lot of issues with mobile (compared to desktop web) with regards to cookie tracking and being able to effectively target using behavioral data. There have been innovations to address these challenges, however, there are new features that are arguably much more powerful, such as the ability to target impressions based on GPS coordinates – what you might call “hyper-local” targeting. This is the most precise advertising technology available today.

RTM Daily: What's the ideal balance between human creativity and machine power/efficiency? 50/50?

Mokbel: There is no ideal balance. In some instances, human creativity is what's most important. In others, it’s the ability to process massive amounts of data to discover insights outside the human capacity. For instance, given real-time analytics on a set of high-volume sites, there are trends that are immediately obvious to a human, but may take days for an algorithm to evaluate and decide on. Then there are unique issues like click fraud, which may deceive algorithms into thinking that the campaign has hit the jackpot, but human judgment finds suspicious. Lastly, human creativity will always be a critical component of any effective advertising campaign, especially in terms of the actual creative message being delivered to the target audience.

RTM Daily: Thanks for your time! Any final thoughts?

Mokbel: I feel that programmatic buying will eventually comprise the majority of media sales in the digital realm, similar to what electronic trading did for the stock market. Programmatic ad technology virtually eliminates the friction for everyone involved in the transaction, allowing buyers and sellers to take part in an ever-expanding open marketplace.

3 comments about "'There Is No Ideal Balance' Between Humans And Machines; Real-Time With SiteScout's CEO Paul Mokbel".
Check to receive email when comments are posted.
  1. Craig Mcdaniel from Sweepstakes Today LLC, July 26, 2013 at 3:20 p.m.

    Nice interview. I do have a question about RTB...

    I own Sweepstakes Today LLC, I have been rated number one in the world for most of the past two years in online sweepstakes publishing. In sweepstakes, we get 30 to 50 times the number of entries for "text links" verses banners. With that, here is my question... We publish sweepstakes for many of the Fortune 500 companies directly. Because of our very high volume of entries, we have gone to "Flat Rate" or "Billboard" pricing. Meaning we charge by the month or week to advertise a sweep. Are there any RTB's out there that offer Flat Rate or Billboard Pricing? I really think the ad markets need to take a look at the oldest form of advertising pricing there is again because it works.

  2. Tyler Loechner from MediaPost, July 26, 2013 at 3:28 p.m.

    As far as I know, the RTB exchanges all operate on an impression-by-impression basis. Although there are now "private marketplaces" springing up that might play by different rules because of their exclusivity

  3. Caroline Watts from isocket, July 29, 2013 at 11:41 a.m.

    Paul, I'd argue that the lack of a buyer-seller communication pipeline in RTB isn't just a trivial technical challenge - it's one of the big reasons that RTB is so unlikely to become a mechanism for direct sales. It's a big behavioral shift rather than just technical issue, which makes for a much bigger challenge. I'd also say that Tier One inventory is NOT making its way to the exchanges, at least not at scale. Most top tier publishers are still using it only for remnant.

    Another thing - there already are pipes made for executing direct deals programmatically between buyer and seller, just not via RTB. Programmatic direct, where APIs are used to transact direct advertiser-to-publisher deals without auctions, is growing rapidly. Tyler actually wrote a great post on the space here on MediaPost, just a couple weeks ago.

Next story loading loading..