In February 2011, Google’s DoubleClick ad exchange did a Real-Time Display Advertising  State of the Industry Survey with Digiday, which found that advertisers and agencies are reporting that they will spend more on digital advertising in 2011 because of the benefits of real-time bid (RTB) inventory acquisition technologies.  To help buyers achieve the benefits they expect from RTB, Google published a new whitepaper that shares their view of real-time bidding for online display advertising.  Based on research and primary interviews with Google’s RTB experts across our product, sales and services organizations, this survey provides a clear definition of what real-time bidding is and how buyers can get involved with it.  Readers will find LucidMedia identified by Google at the forefront of this new technology in the free whitepaper here (PDF).

After almost a year of effort, Epic completes final phase of migrating company to new multichannel ad-serving Platform, and decommissions its legacy ad server.

Epic Marketplace (www.epicmarketplace.com), one of the world’s leading integrated multichannel digital marketing solutions providers leveraging the social media, mobile, display, and video channels, announced today the completion of its migration to a comprehensive new cross-channel ad serving Platform. The new Platform provides for a seamless integration between all of Epic Marketplace’s distribution channels, and the ability to acquire inventory on either a real-time bidding (RTB) or direct basis, all with a universal frequency cap. An enhanced attribution analytics engine is a key component of the new Platform.

The new Platform represents a substantial transformation of the Epic Marketplace ad serving paradigm. Among the changes, the company has decommissioned its segment verification program, which was a component of its legacy ad server. The new Platform was architected and built with an enhanced suite of consumer privacy protections, positioning the company to further enhance its world-class status as a leader in digital marketing consumer protection best practices.

The new Epic Marketplace Platform is driven by a proprietary Optimization Engine (OE) that is built around advanced polynomial statistical analysis. The OE, as the “brain” of the new platform, is data-type agnostic and analyzes data input on a non-PII basis from multiple sources – e.g., social media data, cookie data, mobile data – and then renders targeting solutions applicable across all of Epic’s distribution channels. Among the critical targeting solution sets are strong core competencies in audience aggregation, keyword bidding and contextual analytics, the latter via a real time semantic contextual engine.

“This new Platform is a culmination of a vision we set forth several years ago,” said Don Mathis, President and CEO of Epic Marketplace. “With its launch, we are fully positioned for the next five years of growth in our sector – which will be all about the integrated campaign and the opportunity to provide our clients with cross-channel digital marketing solutions, not just a stand-alone display media buy or a social fan campaign, for example. With the new Platform, we can help clients achieve their marketing objectives across the critical digital traffic channels and throughout the marketing funnel.”
Epic Marketplace has strongly leveraged its deep partnership with LucidMedia in the development of certain components of the new Platform’s infrastructure. In particular, the new Platform utilizes key components of LucidMedia’s comprehensive demand-side, real-time bidding (RTB) management platform and its patented semantic contextual targeting engine as integral pieces of the infrastructure of the new Platform.

Through the new Platform, Epic Marketplace is confident that it will provide even greater value for its clients. The company’s enhanced capabilities will allow it to scale campaigns with a universal frequency cap and in a fully integrated approach across social, mobile, display and video, across its own network of premium inventory, and across major exchanges and supply-side platforms such as AdMeld, PubMatic and Rubicon.

“We’re very pleased that after such a long process, this important work for Epic Marketplace has been completed so effectively – and on-time,” said Mathis. “Our new Platform solidifies our market leadership position and allows us to leverage data and enhanced statistical targeting across all critical digital marketing channels. Moreover, the new Platform has been built with an enhanced suite of consumer privacy protections, further ensuring our compliance leadership position as well.”

For more information on Epic Marketplace, please log onto http://www.epicmarketplace.com.

Reprinted from ADOTAS – Many moons ago, when the demand-side platform (DSP) was new and Invite Media was independent, I made some public predictions about display advertising. In the past year, LucidMedia has been executing diligently and dealing with the many twists and turns of our business. I thought it would be fun to revisit those predictions and rate them with 20/20 hindsight.

Before I get into the scoring, let me first review a few of the major industry developments since my predictions:

• Consolidation. The Invite Media acquisition was sadly not followed by a string of other overpriced DSP deals. This disappointed a number of bankers and all the DSPs.
• Self-Service DSP. This became a hot commodity briefly. There was plenty of chatter about “trading” similar to a stock exchange environment. Many media planners of old surely cast themselves as the new “mad men” of media.

We all know now that this is just silly. Soon, everyone realized that a slim markup on media is viable only if you have massive scale. The real value is provided by driving outcomes – i.e., layering valuable optimization services on top of the platform.

Data Management Platforms (DMPs). Data drives performance right?  So the reasoning goes like this – if we could value data appropriately, then publishers can be compensated properly for the “true” value of their audience, instead of getting diluted in an ocean of inventory. And so DMPs became the next hot thing for while.  BlueKai and Exelate raised even more money.

Are they still hot? Did the revenues follow? Anyone care to comment on this?  The established data players like Axciom kicked a lot of tires and eventually picked partners or charted their own path.

RTB Changed Supply Dynamics. Massive scale is now available via RTB on exchanges and supply side optimizers (SSP). These are new sales channels for publishers. These channels were and continue to induce bouts of teeth-gnashing and sackcloth-wearing for publishers as they try to figure out how to leverage them without diluting their value.

On the other hand, the traditional ad network has to deal with a new challenge to maintain their captive publisher base. As their publisher based flirted with SSPs and exchanges, networks saw no other option but to take a seat on the exchanges.  They built or partnered to acquire this ability to buy on exchanges. (Congratulations AppNexus – you read this trend well!)

Against that backdrop I thought it would be fun to revisit some of my predictions and throw some bouquets and brickbats at myself. I’ll score them on a scale of 1 to 5 where 1 = “Crack Pipe” and 5 = “Savant.” Just for fun, you may want to revisit your own predictions from last year and score them as well. I will have a glass of wine for all the savants. The crack addicts can join me for a pub crawl.

Prediction #1: Agencies won’t be able to absorb true self-service.

The Thesis: Running display campaigns requires a lot of expertise.  No self-serve DSP provides all of this expertise in a usable fashion for the typical media buyer. It will require human expertise to deliver the outcomes. Agencies do not have this talent and won’t be able to attract this talent.

How it played out: Almost all of the smaller agencies run campaigns with DSPs in “managed service” mode. The DSP typically gets a CPM rate.  Some of the larger holding companies have made significant investments in people to build up internal expertise.

They still use a third-party platform. They still profess independence from any one vendor. And they continue to use up business development cycles in “evaluations” of other DSPs. The media planning groups within these holding companies use the services of the “trading desks” services grudgingly, and continue to RFP externally.

The Score: 3.5. It is too early to call the trading desk experiment a success or a failure.  I would say my prediction is mixed for big agencies, and right on for small agencies!

Prediction #2: The DSP is the next ad network

The Thesis: Building on the predictions that (a) SaaS for agencies will not work out and (b) the change in supply-side dynamics due to exchanges will profoundly impact networks; true value will continue to be delivered by driving desired outcomes for customers. In other words, you make more money by running campaigns well.

This is what an ad network does. (I use the words “ad network” as a placeholder for a marketing services company that runs mainly display campaigns.) If DSPs have to  run campaigns to survive, and networks need the technology of DSP to continue to be relevant, then surely they are one and the same?

How it played out: Lets compare business models.

Demand-Side Platform

• Offers a “managed service” to run campaigns
• May offer a self service backed by managed service
• Pricing is typically CPM, CPC, or CPA
• Client base – agencies and direct advertisers
• Lots of noise about their awesome technology!

“Traditional” ad networks

• The run campaigns – i.e.  – offer a “managed service”
• They are trying to differentiate themselves by offering exclusive inventory
• They build or license technology to buy exchange inventory.
• Pricing is typically CPM, CPC or CPA
• Client base – agencies and direct advertisers

It walks like a duck and quacks like a duck.

So, it must be a duck right? Sort of, except that the duck with a DSP tattoo on its chest is a rocketship!
The common theme here is that both are in the business of delivering outcomes to their customers.  It is just that the inventory situation (supply side) has changed dramatically with exchanges and supply side optimizers.  The demand side has not changed all that much!

The Score – 4.5 Pretty much spot on.

What’s Next?

So what’s next for the evolving DSPs?  Emerging media is a likely wave to ride. Mobile, video, and social media perpetually sit somewhere on the slope of enlightenment. Social is probably the most exciting beach-head that DSPs are now wading into.

With DSP technology in-hand advertisers can quickly build a guaranteed fan base for new products, effectively engage and activate that audience, monetize it and then re-engage in a regular cycle. The DSP platforms with their massive reach and instant scale makes social media activation a solid bet.

Agree? Disagree? Have a visceral reaction? Let the fireworks begin.

Working with data partner eXelate, LucidMedia has been included in their Premier Media Partnership (PMP) program, making it easier for media buyers to purchase data along with their ad inventory in the LucidMedia demand-side platform. Our full on-platform data integration allows for our reporting, insights, brand safety and reach to be applied to the data eXelate provides through the platform.

You can get the full story from AdWeek.

There were some very interesting developments over the weekend in the world of real-time, technology-driven media trading.  On the eve of Cyber Monday, one of the new breed of demand-side platforms (DSP) was blocked from the Google AdX ad exchange.  Many of leading trade publications have commented on this potential sea change like TechCrunch, All Things Digital, and AdExchanger.  As the leading independent digital advertising demand-side platform, we found these recent developments newsworthy.

LucidMedia announced two strategic personnel milestones last week which will take the company to the next level as a media platform. We hired Natalie Mazer as Vice President of Optimization to maximize the performance of the LucidMedia demand-side platform. We also announced that Paul Rostkowski, formerly Vice President of Sales, has been promoted to Chief Revenue Officer (CRO).

We sat down with them to discuss the future of both LucidMedia and the digital advertising landscape.

LucidMedia: What do you think is the biggest challenge facing the interactive advertising industry?

Natalie:  The fragmentation of audience across media has been challenging for agencies and their clients. Where once direct-from-publisher inventory was sufficient to achieve performance, web audiences have become increasingly diffuse, particularly with the advent of mobile and video advertising. It takes sophisticated technology to be able to reach the right users at the right time and at the right price.

Paul:  The privacy debate continues to be a hot issue for the digital advertising industry.  Media companies need to support our industry groups in their efforts to educate the public. LucidMedia was one of the first DSPs to offer a real-time network opt-out on our homepage.  We work closely with the industry groups like IAB, NAI and Privacy Choice to ensure we are employing the industry’s best practices when it comes to privacy.

LM:  What problem is LucidMedia solving today with its online advertising management platform?

Natalie:  In a competitive economic climate, advertisers are looking to improve efficiency. With universal frequency capping and a powerful optimization engine, the LucidMedia platform produces goal-driven results within budget.

Paul:  Brand safety is a major concern for brand advertisers. Agencies and advertisers come to us for protection that preemptively identifies unsafe impressions and ensures that ads appear only on pages with appropriate content.

LM: You’ve both been involved in start-ups for years. What is your number one tip for entrepreneurs in the technology sector?

Natalie:  Hire a team with complementary skills and the right attitude. It may be tempting to hire all super-stars, but that strategy is expensive and doesn’t guarantee the creation of a functional corporate culture.

Paul:  Focus on getting your product to market and getting revenue in the door when you’re first starting.  The more you have coming in, the better off you’ll be in the long-run.

LM:  Please discuss the recent partnerships LucidMedia has formed and what impact that has had on the business.

Natalie: Getting all the major data providers on-platform has been a huge step for LucidMedia. Our engineering team has been focused on these efforts for some time and now that’s up and running, the potential is enormous.

Paul:  On-platform video and mobile buying is the next frontier for display advertising.  It has been a real growth area for us and our partners, particularly [mobile advertising network] MobClix and [rich media pioneer] Oggi Finogi.

LM:  What is next in advertising business management? How do you see this evolving in the next two to three years?

Paul:  As the big exchanges and agency holding companies choose their partners, there will be another technical revolution. Right now everyone is focused on building out platforms, but soon the push will shift to integrating those solutions. That’s where a company like LucidMedia, with the combined expertise of eight technology-side experts, will excel.

Natalie:  I agree with Paul. White label solutions are becoming the norm. Platforms that exist with purchased technology, but that don’t have the back-end engineering support will experience difficulties when it comes to complex integrations.

LM:  What major trends do you see affecting LucidMedia the most recently?

Paul:  Agency trading desks have been adopting technology like crazy, trying to keep up with DSPs and all the data providers rolling out user interfaces. In some cases, it may be easier to acquire than to build.

Natalie:  There continues to be confusion surrounding RTB and what it means for online advertising.  Everyone bids in real-time now; it’s how the platform decides what to bid that’s the real differentiator.

Reprinted from iMedia Connection

Overview:

DSPs are really just networks in disguise, they will make networks obsolete, and are a fad with no real staying power.  All false.  In just a few short months, the term demand-side platform (DSP) has become ubiquitous in the online advertising industry. It has become synonymous with all things real-time bid, exchange-sourced, display advertising — in many cases replacing the mainstay term “network” as the model of choice for advertisers. All kinds of media brokers are now scrambling to offer a DSP solution, relegating words like “network” and “optimizer” to the dustbin of display terminology. But as more platforms wade into the opportunity waters, it seems like an equal amount of fog is being injected into industry discussions. So I thought it would be an opportune time to lift some of that fog and expose several of the bigger DSP myths being perpetuated today.

Myth 1: DSPs are really just networks in disguise

False. There are some real differences between DSPs and networks, but recent trends have blurred those lines and given birth to this popular myth. At a fundamental level, traditional networks rely on a large stable of direct publisher relationships to deliver premium placements, easy reach, and ample scale, while owning the media risk and performance responsibilities. Many of these traditional networks live on today amid the DSP wave, successfully delivering campaigns along the way. But networks have begun to rely on exchanges as easy aggregation points for quick scale, and that is what started the move to DSPs. Then when the networks began to layer on automated optimization and advertiser-facing controls alongside their exchange-sourced media — either managed or self-service — they started to look like a lot like DSPs. This is how the whole DSP phenomenon began to accelerate. As networks began to rely heavily on exchange-sourced media while automating the trafficking process and exposing levers and knobs to the advertiser, some essentially became demand-side platforms. With the scale of the real-time bid exchanges and external facing controls, yesterday’s traditional ad network becomes today’s “hot” DSP. But there aren’t going to be as many DSPs as ad networks — read on for why.

Myth 2: DSPs will make networks obsolete

False. It will remain so until all available inventory is transacted on the exchanges. That said, DSPs are creating a “sofa bed” problem (neither a sofa, nor a bed) in the network business. At one end are networks — and publishers in some cases — delivering high-value inventory perhaps with custom or innovative creative. At the other end is the pure performance network that shoulders the media risk and runs cost-per-action performance campaigns. In this scenario, the exchanges are a fabulous source of cheap inventory for the performance networks. In the middle of this are the networks with a rapidly eroding publisher base. It is these networks that are in the greatest danger of obsolescence.

Myth 3: Using a DSP means you get brand-safe campaigns

False. It seems like brand safety is being treated like transparency in our industry. Everyone offers it in one form or another, but like transparency, brand safety means different things to different organizations. Just like transparency, everyone defines brand safety differently. There is one thing that separates effective brand safety from all the other forms of impression analysis and delivery verification out there today: preemptive filtering. Is your flavor of brand safety truly preemptive? Or is the “brand safety” you are getting really just post-impression analysis? Is it reactive?

Automatic brand safety is another of the industry myths perpetuated by networks rushing a DSP to market. Real brand safety, meaning a demonstrably safe environment for a brand advertiser to promote its message online, comes from truly preemptive brand safe filtering. But in practice, pre-impression analysis for relevance and safety is difficult to do. Evaluating a billion impressions a day for applicability takes a robust platform and intelligent integration with all of the real-time sources – and this requires investment in technology and people to do it right. But preemptive filtering pays huge dividends in efficiency and thus returns. With truly preemptive brand safety, you only buy what is safe and there is no waste. No wasted targeting, optimization, time, or ad-spend.

Myth 4: There are dozens of DSPs today, and there will soon be hundreds more

False. There is no shortage of organizations claiming to be a DSP. But you can count on one hand the number of solution providers able to deliver a truly successful DSP campaign (perhaps even minus a couple of fingers). In the heyday of networks, there were reportedly more than 300 ad networks out there, but few had a significant amount of their own proprietary technology. It is the large, technology-rich networks that have successfully transitioned to become real DSPs. The rest are scrambling to rely on relationships for their technology, as they had little or no technology of their own to expose when the DSP tsunami hit our industry’s shores. Because of the technology required, there will be far fewer successful DSPs than there were ad networks. Dozens? Maybe somewhere down the line. Hundreds? No way.

Myth 5: DSPs are a fad and will not have real staying power

False. Far from a fad, the DSP trend is about control, efficiency, and profitability. Advertisers never wanted to outsource all of their control; they did it for the quick scale and reach that networks provided. Now that the exchanges have matured and have exposed real-time bid APIs, control can move back to the advertisers, while retaining all of the scale and reach that networks can offer. Once we go down this road, there will be no turning back. The DSP trend is causing a fundamental change in the nature of how display media is used.

With any significant new trend, there is bound to be some confusion. Hopefully this clears the air around some of the more prevalent myths in our industry. There are sure to be more myths and many different viewpoints, but this is a start. What is certain is that the trend toward the self-service DSP model is going to have some staying power. It has already made an irrevocable impact on how display media is brokered and continues to drive upheaval. It was way back in 475 BC that the Greek philosopher Heraclitus said, “The only constant in life is change,” and those words are just as true today. The display advertising industry has gone through constant change since Hotwired ran the first banner ad in 1993, and the nimble organizations will be the ones that continue to flourish.

We recently talked John Ebbert, the publisher and managing editor at AdExchanger.com, regarding our big funding news story.  Here are some of the most frequently asked questions.

Q: Please discuss your new round of funding and why you chose MMV.

A:  We had many options available to us in this round but MMV was the ideal funding partner at this stage in our execution plan and capitalization strategy.  MMV is truly dedicated to providing timely and effective growth capital to emerging technology companies like LucidMedia.  They are focused on the North American market and the amount of capital they typically provide ranges from $1.5M to $10.0M which was also a perfect fit for us.

Q: Where do you see the $4.5 million going?  Any critical needs such as “feet on the street”?

A:  We are applying the proceeds from this funding round to expand on our recently launched self-service platform (www.LucidMediaDSP.com) that gives agencies and advertisers more control and enables them to more efficiently manage their display advertising campaigns. The funds are being used to bring additional capabilities to market and to do so sooner so we can better capture the escalating DSP opportunity.  And since we own the full technology stack in our demand-side platform, with the additional funds we are launching new capabilities not as disparate products but as unified new features within our platform.  It allows us to be more nimble and responsive to our advertiser’s requirements.

Q: Are there too many demand-side platforms today and how will LucidMedia differentiate?

A:  There are not really all that many demand-side platforms out there.  Much of the static in the DSP space today is centered around attracting attention in the venture capital circles.  But when it comes to getting in front of an advertiser and demonstrating real capabilities in a real product that you can actually use to deliver value and efficiency, the number of DSPs can be counted on one hand (minus a few fingers).  There are too many companies calling themselves a demand-side platform though.  We have run hundreds of successful campaigns for the majority of Fortune 500 companies out there over the last 18 months that we have been operating as a DSP.  In that time we have proven that several capabilities are unique to what LucidMedia offers.  This includes our proprietary contextual and audience targeting, ability to police a true universal frequency cap (UFC), and real-time assessment (RTA) across all sources.  In addition, our DSP provides dynamic inventory allocation across RTB sources and even premium buys, true preemptive brand safety, and campaign optimization at the page-level.  We also offer custom integrations with all 3rd party data providers, real-time bid (RTB) inventory availability insights by channel, and a server-side cookie store for proprietary audience targeting.

Q:  Anything surprise you about the reported acquisition of Invite Media by Google this week?

A:  No surprises there.  Peter Kafka broke the Google-Invite news a month ago on All Things Digital.  The industry has been holding its collective breath waiting for the big roll up for a long time now.  In March Epic Advertising acquired Connexus Corporation including the Traffic Marketplace and now Google grabs Invite.  This is likely the start of a bigger consolidation in display media.  Our focus is still on executing against the truly exciting opportunities available to us today in the still emerging DSP space.  We believe there is a considerable amount of value to be had here and we are focused squarely on positioning our technology, products, and team as effectively as possible with agencies and advertisers.

digiday:DAILY is a regular content hub and e-newsletter that features the top stories in digital media and marketing with a focus on digital content, advertising, and emerging platforms.   John Gaffney, the award-winning journalists, recently wrote a great review of our self-service launch.  Here’s what he had to say.

DSPs are going DIY. Demand-side platform LucidMedia announced the launch of a self-service version of its formerly managed service software yesterday, hoping to enable agencies and their clients to gain full-control over their targeted digital campaigns.

Ajay Sravanapudi, LucidMedia Founder and CEO, says the self-service switch will give agencies accessing an in-house, “white labeled” solution with a proprietary base of more than 14,000 targeted categories, page-level transparency, and multiple layers of filtering to protect branded advertisers from inappropriate content.  He also says the DSP has not overlooked the publishing side of the business.

“The industry trend of self service DSPs also impacts publishers positively.  Many immediately discount the notion that what is good for the demand side can also be good for the supply side of the equation. But the trend is actually good for the whole display industry,” he says. “Early on, publishers heard that the advent of mega-exchanges would only drive down display media prices.  The story was that premium inventory would be treated as interchangeable across the big networks and traded like commodities.  But the self service DSPs have actually done the opposite.  They have allowed publishers to differentiate their inventory in ways never before thought possible.  What we really faced were insufficient tools for buyers and sellers to truly value impressions properly and that is what the DSPs, and the readily available self service front ends, are doing for publishers.”

Sravanapudi also believes publishers that are creating real value and results for advertisers can now be compensated for this service through the agency self service platforms like LucidMediaDSP.  Agencies will have a new level of unified, actionable optics and insights, he says. Tools like billing and reconciliation are integrated making proper attribution a reality, allowing for true differentiation and proper valuation of the publisher’s impressions.

Among the features:

* Real-time Assessment (RTA): LucidMedia’s RTA provides immediate insights into real-time bidding availability covering up to 95% reach potential in the US;

* Real-time bid (RTB) inventory availability:  Agencies and advertisers can get real-time insights by channel and by demographics, delivering the most flexible optimization available;

* Dynamic inventory allocation:Inventory from all real-time bid sources, as well as spot buys, is automatically allocated to campaigns, enabling more efficient ad operations teams and higher returns;

* Page-level semantic transparency: Provides deep insights into what drives the desired campaign outcomes and maximum campaign performance;

* Proprietary content and audience targeting technologies: A universal frequency cap (UFC) and server-side database provide maximum control and leverage.

This weekend while many of you were sitting down to a quiet meal, LucidMedia was celebrating an historic milestone. One year ago LucidMedia processed our first real-time bid (RTB) impression. At precisely 6:45PM Eastern Time February 21st 2009 LucidMedia turned on the RTB engine in our demand-side platform (DSP) and began acquiring impressions in real-time. We have since processed tens of billions of impressions and the scale continues to grow. We are quite proud to be one of the pioneering companies behind the current real-time bid inventory acquisition wave that is sweeping our industry. And although we are a relatively new company, we are one of the first demand-side platforms operating today in what is rapidly becoming a crowded space. We saw very early, late in 2007 in fact, that advertisers needed more control and the DSP model was the future. Back then we did not call it a DSP though. It was simply a better kind of ad network where inter-mediation was streamlined, transparency was paramount, and brand safety was the dominant capability. Now it is the future of the ad network.