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Trading of Media - Our Multi Dimensional Future

15th May 2013

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Have you ever considered why online advertising has recently become increasingly apparent to you as a consumer?

Could it be a coincidence that the car manufacturer you keep Googling or pages you ‘like’ on Facebook continue to advertise on virtually every websites you visit – and as a result you are prompted to investigate their brand and products a little further? Far from being a coincidence, this is a planned and calculated activity.

Rightly or wrongly, the approaches advertisers use to buy and sell media inventory are evolving day by day. The introduction of bleeding edge technology, coupled by the injection of Petabytes of data, advertisers can now accurately target their desired audience and their message with more operational efficiently and directness.

Real Time Bidding of online media (RTB) is not a new concept, although it has only become a more widely discussed in the past few years. While industry insiders have observed that this facility was available as far back as the late 90’s, it was deemed far to expensive and complex to facilitate. Recent movements have included strong growth of online advertising in mobile computing, premium sites, integrations with social media platforms and online video.

Nowadays, with the ongoing advancement of technology and the abundance of readily available raw data, a revolutionary disruption of the digital media industry is underway and accelerating.

How fast is it growing?

Region by region, the global ecosystem of the RTB industry is still relatively embryonic, with US and Europe players leading the way. Strategic positioning by the major technology companies, data providers, agencies and publisher has been relentless, accompanied by major investment, from all corners of the industry and globe.

Increased opportunity has seen technology providers become even more competitive – you could say data is literally worth its weight in gold – and Venture Capitalists are overwhelmed by numerous investments requests, this is all evidence that the RTB industry is only going to get bigger and far more competitive.

Recently at AdExchanger, Zach Rodgers predicted compound annualised growth rates of 59% out to 2016, to $13.9B globally in 2016.

Another good reference is the 2012/13 Forbes 100 US companies to watch list to really see the magnitude of the investment being made within Digital Media, Data and Technology within the Digital Media world.

The Journey

My personal transition into the Programmatic Trading industry was a relatively smooth one. I’d previously specialised in High Frequency Trading technology and Data Talent Acquisition, across Tier 1 investment Banks when in early 2010 I come across an interesting article in London’s FT (Financial Times). The article detailed the media industry was looking to revolutionise its transactions between the agency and the publisher for the purpose of online display inventory buying, thus creating an environment for a far more cost effective, better targeted and a fully automated process that would influence a precise audience with unimaginable accuracy, globally. The impetus for the anticipated revolution was the confluence freely available, vast data, and the technology of Big Data.

Now that all sounds great, but what did it all mean?

After months of late night research and taking every opportunity to talk to people in the know, it was clear that Silicon Valley was once again leading the technical surge into the industry. The US and European markets had already started to mature yet the majority of APAC remained untouched.

My goal was to move to Australia already saddled with as much knowledge as I could about this exciting and fascinating space, with the view of being the ‘Go To’ talent specialists within the Australian RTB industry.

I am forever speaking to people in the industry to further my knowledge and understanding of the space and learning all I can, I have found that immersing myself in the community has been key to unlocking a multitude of locked doors.

After working predominantly with clients in London who required talent which could develop complex, data driven, high frequency trading systems, there was some clear symmetry between to two industries. The automation concepts, mathematical algorithms and machine learning attributes required to drive the technology that the media industry required, coupled with the utilisation of large volume data, all of which are areas I could relate to from my past experience within financial trading.

Although RTB is functionally different from financial trading, it is surprisingly similar in terms of skills set, operations and vitality. It is impressively more complex in its global scale, variety of participants, and variety of leverageable data sources behind effective bidding in the millions of milli-second auctions every second occurring globally 24/7.

Is Australia behind the times?

When exploring new technical concepts or industries, Australia and APAC can tend to be more “conservative” when compared to many other regions. Personally, I believe this to be a really smart strategy, as first generation concepts and technologies typically have teething issues or bugs to fix with their first few releases . As such, Australia is still fairly junior in terms of its RTB offering. Some companies are more advanced in their preparation and offering, while others are only just beginning to ask the question “what’s is RTB?”.

Data is a key component for any successful RTB desk. Australia’s 3rd party data is not quite as strong as our American and European counterparts, however steps are being made to improve this – which is a whole other topic altogether – wait for my next blog post!

The next big challenge for Australian based firms who are investing into the RTB will be to compete with the Silicon Valley based Technology and Data giants before they begin their inevitable migrating over to the Australian shores.

Talent sourcing is a massive priority for the majority of Australian businesses, along with retention which is often the main problem amongst many of the technical leaders. I would assume as more of the US based tech/data and targeting firms move here, they will also be scouting the best of the local talent and know how.

Now with the Mobile and Video RTB in its own parallel evolution, to eventually IPTV and TV itself, this space is only due to get even more exciting.

The Xpand Group is the only Digital Media Talent specialist within Australia with a team of experienced, dedicated specialist only focused to the ongoing expansion and development of the Australian Programmatic Ecosystem, it’s no doubt the most excited I have ever been and there’s a good reason as to why Xpand are becoming known to be the main ’Go To’ advisers to the Programmatic Trading industry within APAC

For more information, Contact Dan Sheppard at Xpand Group – daniel.sheppard@xpand.com.au