Just over one year ago, Keith Gooberman, former VP of trading and platform operations at Varick Media Management, left the company to launch his own independent trading desk, Programmatic Mechanics.
“I love the Varick guys -- nothing but good things there,” Gooberman said at the time. “But they had trouble servicing agencies and advertisers that were at the other holding companies. I wanted to start a practice to service organizations outside the MDC family of agencies.” His desk launched with a focus on mobile, but said he would handle display, video and social media buys as well.
Real-Time Daily caught up with Gooberman to ask what it’s like to start an independent trading desk and what trends he saw in year one.
Real-Time Daily: About one year ago you left VMM to form your own independent trading desk, away from a specific group of agencies. Was the transition as smooth as you hoped it would be?
Keith Gooberman:I had never started a company from the ground up, so I wasn’t sure what to expect. What I learned is that nothing is smooth when you’re starting. Getting through the first couple months is difficult.
RTD: What steps did you have to go through to start the trading desk?
Gooberman:Once you’re incorporated and exist as an entity you build collateral. This is sales material to tell people what you can do for them. At the same time, we got the contracts signed to license the technology we would need to execute the things we we’re saying we could do. Then you try to time the entire thing correctly so there are no missed minimums and financial commitments. Then you hire smart people and teach them to trade. Then you start running around trying to win clients like a crazy person.
RTD: You said you did over $1m in "top line" last year, your first, and that you're on track to triple that this year. Is that $1m in revenue? In spend going through your trading desk? What does that figure represent?
Gooberman:The way ad tech companies are valued is extremely diverse. In my experience, “top line” reflects total billings, or the amount of money which passed through the desk.
RTD: Where is the money being spent? You initially said you were going to focus on mobile -- is that still the case?
Gooberman: We did get out the gate doing a decent amount of mobile. We have found a stride in display and video and are now well diversified across the three.
Until the mobile attribution solutions improve, it is a tough direct-response-cost-per-install world out there. Nobody gets too excited to play in that market.
RTD: What's the balance of your client base, specifically as it relates to agencies and brands?
Gooberman: We’re about 40% agencies, 30% brands and 30% ad tech companies using us to access the exchange and leverage our services and technology.
RTD: Do the agencies and brands spend differently in any noticeable way? I've heard brands are often more aggressive when working directly with ad tech, rather than through an agency. Is this true?
Gooberman: Great question. Small brands are very direct response-focused. They are focused entirely on driving conversions and sales for their businesses. As the brands get bigger, the CMOs become more focused on correctly allocating costs. Since the budgets are so large, that is the best control they have.
Finally, agencies vary in the same way, but are usually focusing on the overall strategy ahead of costs. They want to make sure they are efficient, but they also need to tell a great marketing story.
RTD: "Taking programmatic in-house" gained legs last year. Did that help your business? Did you foresee that becoming a trend when you started Programmatic Mechanics?
Gooberman: When we started, we knew that the in-house movement was about to get rolling. We have been helping brands and agencies build out trading teams ... once they understand the metrics. We’re big on the ‘walk before you run’ system, and it seems to be working.