What Does AOL's Acquisition Of AlephD Mean? Q&A With ONE By AOL's Eldad Persky

It’s no secret that over the last couple of years, AOL has aggressively built up its ad-tech stack through acquisitions. That ad-tech stack has become ONE By AOL. Most recently, AOL acquired the French programmatic performance company AlephD in January.

But prior to that move, AOL went on a tear, acquiring Vidible in December 2014. Vidible helps websites expand their video content by running selected or pre-filtered content from other publishers.

AOL snapped up Convertro in May 2014—a move that would enable clients to evaluate different media channels, ad formats and segments in order to understand how their ads influenced consumers and who their consumers were.

Then there was Gravity, acquired in January 2014, a technology that personalizes and recommends content. The acquisition of Precision Demand, which would help with cost-efficient targeting, came in May 2014.

Setting the stage for AOL’s plan to bulk up its ad tech stack, the company set its sights on programmatic video provider Adap.tv, which it acquired in August 2013.

Eldad Persky, Head of Product, ONE for Publishers at AOL Platforms, is responsible for AOL’s programmatic sell-side offerings. Prior to this role, Persky was senior vice president, product management, for Adap.tv, AOL Platforms—he came along with AOL’s Adap.tv acquisition.

Real-Time Daily:Why did AOL acquire AlephD? What value does it add to the AOL ONE Platform?

Eldad Persky: AlephD brings a number of enhancements to our platform, centered around two important issues for publishers.

The value of each video, mobile and display impression changes every second, based on market needs, ad buyer behavior and even the weather.

For publishers, it’s incredibly challenging trying to understand these factors, analyze them for the short and long term, and then price accordingly based on where the ad market is at any given moment.

Publishers are faced with a crucial question: At what price should I sell my inventory? But that’s not easily answerable. Many publishers simply rely on potentially outdated historical information. They have no easy way to understand the value of their inventory at any given moment.

RTD: Essentially, publishers are shooting in the dark with respect to the value of their inventory.

Persky: Yes, and publishers need to be able to evaluate different monetization models—from public auction to private deals, and so on—and understand the best way to use the various tools at their disposal in order to maximize revenue opportunities.

Advertisers have been able to enjoy this kind of prescriptive technology in areas such as multitouch attribution and bid optimization. However, publishers don’t have a central analytics and optimization layer to help them make critical decisions and remain ahead, whether it’s evaluating selling inventory based on context vs. audience, reserved vs. programmatic channels.

That’s why we brought on AlephD to help build on what we’re doing with ONE by AOL for Publishers, which is helping publishers become more financially successful using technology and data.

RTD: Publishers have seen a decline in CPMs for a variety of reasons. What are those reasons?

Persky: There are a number of reasons why publishers are under pressure today.

Advertisers have been using optimization technology for years now, which has driven down prices in second-price auctions, for example. Aggregators, such as demand side platforms, also limit the number of bids submitted into any one auction, which reduces bid density and, therefore, clearing prices to publishers.

Also, the shift to audience-based buying has left many publishers behind in terms of being able to forecast, price and understand that selling model in order to be successful. Finally, audiences are shifting to mobile, but inventory pricing and fill-rates have not followed suit.

We’ve seen the rise of the data-driven advertiser over the past few years. Now it’s it’s time for the rise of the data-driven publisher.

With AlephD, we’re trying to level the playing field for publishers, to help them carefully optimize floor prices in every auction. The combination of analytics and optimization tools with a data management platform and a set of supply-side platforms offers publishers what they need to enable audience-based selling while protecting yield. These tools are channel-agnostic so publishers can understand monetization opportunities not only within a mobile environment, but also within the larger cross-channel marketing mix.

RTD: What is your view of programmatic direct and guaranteed?

Persky: Despite optimistic projections, we haven’t seen programmatic-direct's rise to prominence. Considering complex and, at times, conflicting interests between advertisers, agencies, publishers and technology vendors, the motivation to drive change has to be extremely strong.

However, the operational efficiencies that programmatic-direct promises aren’t great enough to change buyer behavior. I’m a big fan of using existing programmatic pipes and capabilities to enable direct audience-based buying and selling on guaranteed, and possibly even a fixed price basis.      

RTD:  What’s your take on the rise of header bidding?

Persky: Header bidding has been rapidly adopted thanks to its clear effect on yield.

Publishers want to make the best decision per impression across transaction models and demand options, and header bidding emerged as a workaround to solve this partially, in an ecosystem where larger players have traditionally controlled partnerships.

However, header bidding only addresses a symptom, rather than focusing on the larger issue for publishers, which is the need to leverage data and technology and help them consider all of their monetization options for each impression and act to capture the greatest value for it.

I think header bidding has residual, unwanted effects, like introducing latency within a user’s experience. There won’t be an audience to monetize if we resort to over-engineering things through daisy-chained hacks and tweaks.

RTD:How do you see the potential for programmatic TV evolving?

Persky: Programmatic TV has a lot of potential for both advertisers and the networks, but we are still at the very early stages. We need to develop standards and baseline measurement that both buyers and sellers can align against in order for it to take off.

Today, we are seeing every network, agency and technology vendor ginning up their own technology and siloing data, which will only lead to issues of scale later on. Also, there’s the question of what value programmatic brings into the process when the data, technology and standards are all siloed within competing players.

RTD: People talk about buying audience segments and audience targeting. How do AlephD's capabilities and functions enable improvements in this area?

Persky: As the market continues to shift to audience-based buying as a currency, our goal is to give tools to publishers so they can place a price tag against audiences.

The promise of programmatic for publishers is having a comprehensive, real-time understanding of the value of their audiences and being able to act against these marketplaces with pricing and packaging intelligence. We aim to offer publishers these capabilities so they can efficiently harness first- and third-party data.

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