Commentary

Entry Into U.S. Ad Tech Big Deal For This Small Company

Berlin-based mobile data exchange adsquare announced its entry into the U.S. market in late January, and it’s excited to open its New York office. The company’s CEO, Tom Laband, will be based in New York and hire sales people to staff the office.

To launch its U.S. entry, adsquare is hosting an invitation-only event on Thursday for agency partners and others.

It’s surely an interesting and risky time to enter the market, since the ad tech ecosystem is undergoing consolidation. Firms are being acquired, while some, like AppNexus, will join The Trade Desk, Rubicon Project, and Rocket Fuel, in the public markets, to name three, and many firms may fail. Time will tell.

But don’t say that to adsquare. The company believes working with U.S. partners is critical in order to grow. It's already doing business in the “EU Five”—Germany, the U.K., France, Spain, and Italy—plus, Denmark, Sweden, Finland, Norway, Austria, and Switzerland. In Europe, the campaigns are much smaller. The company also works with large advertisers in Europe, as well as agency trading desks like Xaxis, Accuen, Cadreon, and others.

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Adsquare wants to increase the scale of its campaigns, plus, “the U.S. market is so much more advanced,” said Daniel Rieber, VP of marketing. "The ad-tech landscape is much different in the U.S. than in Europe.”

How so?

“In Germany, we have to say why mobile is important and why agencies should do campaigns programmatically. They question mobile programmatic in Germany. The market is one step behind.”

Fair enough.

“We have to educate people on what mobile programmatic is and how it works before we can eventually talk about our company,” he said.

Education also continues in the U.S. as well, simply because the technology is evolving so rapidly and there are so many vendors on the scene. Tech integrations aren’t so easy. In addition, agencies and marketers are becoming more discerning, to separate the wheat from the chaff. And in the U.S., marketers now have their own trading desks and programmatic units which has empowered them to some extent.

Alexandrina (“Alex”) Hadzhiyska, adsquare’s senior marketing manager, noted that in Germany agencies and marketers automatically refer to the challenges of doing programmatic: ad fraud, privacy and transparency issues, etc.

To be sure, the European privacy framework is different. “We have a great privacy structure in Germany. Consumer data has to be anonymous,” Hadzhiyska said. In the U.S., companies can use consumes’ IP addresses for targeting and building profiles. In Germany, this isn’t permitted; the IP address is considered personally identifiable information.

She noted that “you can cut the IP address so that it’s not so precise. In Germany, you must have at least seven people in order to segment, otherwise you can easily identify consumers.”

What distinguishes adsquare from all the rest? Rieber said the company is built as a “privacy-first system” for starters. “We’re doing so much to protect privacy,” he said. But in the end, there’s always a “grey zone,” so third parties like TRUSTe and other privacy compliance partners are needed.

“There are a lot of platforms and providers in this field. We focus on mobile-first, we’re neutral and transparent. You’re not buying black-box audiences, and you can see which data comes from which provider,” Rieber said. “Adsquare is an exchange, but it has a lot of location intelligence behind it and it uses household data.” In addition, it has pre-bid integrations.

“We make all the location data available in real time, so we call our technology a real-time data exchange. And we go beyond location -- which means we not only use where someone is, but what someone is doing on their mobile device and what apps someone is using, and what they’re doing on their apps,” Rieber said.

The company works with first-party partners and has its own private marketplace for data.

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