‘Ad tech is so complex – it’s no wonder publishers give Google all their inventory’

Jason Barnes, the APAC vice president of sell-side advertising software company PubMatic, discusses a host of issues from transparency, ad fraud to why publishers need to think like technology companies – with Eleanor Dickinson

Jason Barnes has been the head of advertising software PubMatic in Asia-Pacific for the past three years. An Australian publishing veteran of 15 years, Barnes now leads the company’s four offices in Tokyo, Delhi, Singapore and Sydney.

Here is what Barnes had to say about the current state of the ad tech and publishing industry in Asia, plus how PubMatic is trying to tackle transparency issues in the market.

What is PubMatic doing with its Let’s Be Clear launch in Asia? What kind of problems do you want to solve? And what has been the response so far?

“The intention is so that transparency is on the front foot; we want to start a conversation about the lack of transparency in the industry at the moment. We want people to talk to us about inventory quality, ad quality, fraud – key things that are perhaps inhibiting the growth of digital and programmatic. We’ve launched it in the US, Europe and now Asia as it’s become a bit of a blight on the industry.”

“The response has been very positive: it’s not just a campaign, but something that has been backed up by a lot of action on the ground in South East Asia, Singapore, Japan and India. It’s about actively speaking to our publishers and going into the agencies.”

You described transparency as a ‘blight on the industry’. How bad would you say the issue is in Asia compared to the rest of the world?

“The issue has a number of facets that differ depending on the part of Asia or the world you’re in. The challenges that the publishers and agencies face are similar, but there is definitely more scrutiny in the US and Europe. Viewability in particular is not traded quite as much as it is in Europe and North America: it’s growing, but it’s an example of where Asia is behind. It’s not a metric used as commonly. In terms of fee structures, North America and Europe are more on the front foot about addressing it, whereas in some Asian markets they don’t really talk about it at all.”

Recently there have been a number of stories highlighting how publishers, including SPH and Mediacorp, are struggling in the digital age. Why do publishers here seem to find it so difficult to monetise their inventories?

“If you look at any traditional media company, whether it’s SPH or News Corp or Nikkei, the fact is that their audiences are moving to digital, and the way they could monetise their print is one tenth of the amount of money they’re making in digital. But in digital, it’s a far more competitive and fragmented landscape; we have the huge players like Google, Twitter and Facebook that have the audiences which traditional print companies originally had offline, but have not obviously transferred to digital.

“In South East Asia, the fragmentation really presents them with a big issue. If you look at SPH, Singapore is a very small market; their ability to expand beyond the borders of Singapore are limited. The scale is something publishers really lack; they do not have the standardised technology and the homogeneous audience that the players like Facebook and Twitter do. So they really suffer from the lack of scale and data; the advertisers go to the big platforms because they know they can reach the whole of South East Asia.

“Google really does dominate in South East Asia – more so than in Japan and North America and Europe, where they are looking at alternatives. In this region, a lot of publishers are happy to be on the full Google stack; they leave their entire monetisation up to Google.”

“I also have a firm personal view that media owners need to become technology companies. The CTOs in these organisations need to have far stronger positions on the board because their competitors now are software and tech companies: therefore publishers need to think and behave a lot more like tech companies.”

PubMatic is a sell-side business, whereas players like AppNexus and Rubicon do both buy and sell. Is that an ethical grey area?

“We believe it is. How do you optimise for both the supply side and the demand side is the key question here. You have an algorithm, the DSP, that the buy side can buy inventory, and then you have the supply side where publishers put their inventory on. Those two meet in the middle: and if you control both of those, you are effectively saying to the buyer: ‘we’re going to get you the best inventory that you want, as cheaply as you want’. That’s exactly what a buyer wants. Whereas a publisher wants a higher price as possible for their inventory because they’re under huge yield erosion issues. If you’re in the middle, and own the tech on both sides, how can you optimise for the buyer and the publisher?

“We don’t believe that’s possible. While we want to ensure the publisher get the highest yield possible, at the same time we want to make sure the buyer gets their value for money. That’s why we encourage publishers to have good data and good viewability metrics, so buyers are happy to pay say 20 per cent more. But we do see [doing both sides] as a conflict.

“Header bidding has brought to light the issues that publishers have faced around making Google responsible for all of their monetisation, and the fact they have not received the due revenue for their inventory. The Google environment limits competition; it favours Google and Google’s DSP.”

The ad tech arena is a complicated one for both marketers and publishers. Is that partly why so many are going to Google: because it simplifies everything?

“That’s exactly right. And when I talk to publishers in South East Asia, one of the challenges they face is around education. An ad tech vendor walks through the door: gives them a presentation about these complex products they don’t quite understand. They don’t always ask the right questions to make a full, evaluative decision because they haven’t got the experience or the skill set to make it with confidence.

“And of course nobody ever got fired for using Google: they’re just going to say yes use Google – that’s great. It is definitely simpler; that’s the beauty of Google. When I worked at News Corp for many years, I ran the Google relationship and it was literally: ‘you say yes and we flick the switch’. In territories where you don’t have the resources to do big evaluations or the education, Google is a great option. So we do a huge amount of education to make sure our publishers sit on the level playing field as the agencies, so they can get the best deal.”

Following the introduction of header bidding, is the uptake by brands into publisher programmatic been as strong as it could be in Asia?

“We are certainly starting to see it happen. We were talking to a couple of the big buyers in Singapore – the heads of the trading desks – and they have said to me that they want to move 50 per cent of their buying of key publishers onto programmatic within the next 12 months. That’s a clear indicator that agencies are looking to move dollars from the traditional IO to the programmatic execution: it introduces efficiencies and they can use data. It also helps the publisher: the more they can do through an automated system, it means their sales teams can focus on those high-impact campaigns: advertorial, native-type promotions, that have large CPMs.”

What are the main plans for PubMatic in Asia over the next year?

“We have offices in Tokyo, Delhi, Singapore/South East Asia and Sydney; those are our focus markets and we think we have a lot of headroom in those markets to grow. We’re more than doubling in terms of revenue over the last year; we’re profitable now too which is important. We’re a lean organisation and profitability is important to us.

“We’re not in China or South Korea, but there’s an eye to them. We’re not actively engaging or have an entry program yet. But we do get approached by a lot of publishers in China and Korea. There’s no plan to put feet on the ground, but if opportunities do arise and then if the time is right, we would do it in a way that would ensure our profitability. But we can’t ignore China or South Korea; they’re two of the biggest digital economies in Asia, so we’ll continue to keep an eye on them.”


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