Can you tell us a little about your role?
As vice president of strategic development in EMEA, I’m responsible for the overall strategic expansion and development of AppNexus’ business across EMEA. I focus on market trends, exploring new market opportunities, innovations in programmatic ad tech and the ad tech power game.
How significant a threat is adblocking?
The stakes are certainly high. We’ve grown accustomed to thinking of the internet as “free,” but as newspapers have shifted from print to digital, so has their advertising. Game developers, musicians and filmmakers who use online distribution channels to build their fan bases also need ad revenue. Advertising is the lifeblood of the internet. Take it away, and many of the people who create content won’t get paid.
That said, adblocking is still relatively new, and it’s not yet clear how the economics will shake out. But some publishers and content producers are likely to lose a great deal and that should concern everyone.
How have we ended up in this situation and what can be done to solve it?
Consumers download adblockers as a reaction to poor user experiences and everyone in the ecosystem bears responsibility. Some publishers have become greedy and allowed as much as 50% of their screen area to be consumed by intrusive advertising; meanwhile, some advertisers have grown lazy about targeting and creative quality and as a result, they deliver irrelevant and aesthetically unappealing ads. On top of this, some ad tech companies pile on tags that cause delays in load time and take a growing bite out of consumers’ data plans.
Ads are supposed to be engaging – not intrusive or annoying. Everyone in the advertising cycle has a part to play in enhancing the online user experience. From an ad tech perspective, we need to focus on solving user experience problems such as latency, weight, and creative standards, and only then can we realistically tackle the threat of adblockers.
Do you think concerns with bots and fraudsters are holding back digital ad spend?
Marketers are allocating spend to digital channels more than ever before. According to eMarketer, programmatic display spending in the UK is projected to reach £2.46bn in 2016, and today already accounts for more than 50% of digital display. At the same time, our industry is shifting towards transparency; marketers are no longer willing to spend significant budgets without knowing whether the impressions they purchase will be seen by humans, or if their ads will even enter the viewable portion of a consumer’s browser. At AppNexus, our commitment to transparency and our strict inventory quality standards have resulted in significant upticks in CPM, view-through rates and post-click conversions. This tells us that marketers are willing to spend more when they feel confident their money is going towards high-quality inventory.
What’s being done to solve this problem?
At AppNexus, we believe that advertisers should know exactly what they’re purchasing – domain names cannot be masked, ads must be delivered to real humans and advertisers should pay only for ads that are viewed by consumers.
Our Inventory Quality (IQ) initiative has laid the groundwork for the future of ad tech; we’ve already seen major players like Facebook follow suit by cutting out ad networks who aren’t adding value to the ecosystem. Companies must be willing to take short-term risks in order to ensure long-term quality, safety and profitability.
The industry, lawyers, activists and the media talk a lot about it, but how concerned do you think real consumers are about privacy issues and invasiveness in marketing?
AppNexus is very concerned with user privacy, both because we are users ourselves and we want the internet to be a place of openness and freedom, but also for commercial reasons. If users are scared or angry about ads, then the ads won’t be effective which harms our business. So, users’ interests, our own values, and our business interests are aligned.
That said, it’s extremely difficult to get good data about real user preferences. Some surveys reflect what we think is a common sense understanding: that users are worried about identity theft and fraud, which are concerns that are not related to online advertising (though users may not understand that).
One of the key problems is that the industry is opaque and difficult to understand, and we all have a responsibility to promote transparency and education. Once consumers understand how the industry works and the reality of the data and the technology, it’s likely they’ll become more comfortable with it. Users also feel differently when they fully understand the value exchange: data-driven online advertising supports valuable content and services that they get for free.
The industry is already stepping up with robust self-regulatory programs designed to set the standard for acceptable practices, raise awareness, and increase transparency. For example, last year, the IAB launched its IAB Believes initiative, which addresses some of the most controversial issues facing digital advertising, including the thorny question of privacy. The initiative focuses on raising consumer awareness and understanding of the data that is collected and used, as well as promoting a pragmatic and streamlined framework for data protection in Europe. This call to action is a step in the right direction when it comes to empowering people to safeguard their privacy, but there is still work to be done.
Given the data they have access to, advertisers often gain the upper hand in negotiations by knowing audiences better than publishers do. Is there anything that publishers can do about this?
The move towards full-stack platforms affords digital publishers the opportunity to increase their profit margins in ways that might have seemed quite ambitious a few years back.
Granular data point collection, forecasting, and analytics abilities of full-stack platforms enable publishers to practise yield management on an unprecedented scale. Accurate forecasting and audience data can help publishers better understand their capacity, drive upsells with audience performance insights, better package valuable inventory, and generate new revenue streams like audience extension. These advances are leveling the playing field and enabling publishers to establish lasting business models for the digital age.
What’s your message to delegates attending this year’s Changing Media Summit?
After more than 25 years since the advent of the internet, publishers are still grappling with creating a viable and lasting business model fit for the digital age. With an increasingly fast-paced and fragmented media landscape where data has become the new currency, publishers increasingly need an independent technology partner who can genuinely help them gain back control over their businesses by leveraging their data and better monetising their online content.
It is time for publishers to reconsider their dependence on DFP and embrace an alternative ad-tech solution that can empower them to produce more and more high-quality content and create a more vibrant internet for consumers, while enabling them to take their destiny into their own hands.
Meanwhile, brands need to better understand how data can enhance branding campaigns and drive greater creativity in media planning, storytelling and dynamic creative. It’s a lack of understanding that creates the gap between data-driven marketing and creativity; however some savvy and forward-thinking marketers are already embracing programmatic technology to tell their brand story quickly and at scale, and others are likely to follow suit.
Nigel Gilbert is vice president, strategic development, EMEA at AppNexus
This advertisement feature is paid for by AppNexus, which sponsors the Guardian Changing Media Summit.
