#117: Quo Vadis Green Shoot AdTech Interviews
With Andrew Mole, Co-founder& CEO of pubX.ai + Pre-Cannes Webinar Registration
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In this series, we’re stepping into the shoes of “AdTech Equalizers” — the green shoot companies changing how the advertising job gets done. We'll delve into their worldview and unveil new strategies, tools, and thinking that make advertisers better off.
Today, we have the great pleasure of speaking with Andrew Mole, co-founder and CEO of PubX, the world's leading AI-powered revenue management platform that delivers the right dynamic pricing and yield optimization for publishers aiming to own their world.
Q1: Why should Publishers care about Dynamic Floor Pricing
A: Andrew
Let’s put the question another way: Why should publishers care about pricing their inventory at all?
Isn’t it an interesting peculiarity of this industry that so much control over key publisher business decisions has been ceded to the buy-side? We not only believe but know for certain this is a coefficient of the structural problems that have persisted, at the expense of publishers, since the advent of programmatic.
Effectively, the majority of programmatic innovation is centred on the buy-side because it is the source of liquidity, but this has increasingly put publishers at a disadvantage. Publishers have always been able to control their direct buys, while open-market programmatic was originally viewed as an add-on priced by the market. As technology grew in sophistication, publishers saw programmatic grow into a greater share of their revenues, but without the same level of innovation to ensure these revenues were managed responsibly.
The result is a situation where publishers have lost total control over the selling point of their ‘product’ (namely, attention) and have always struggled to catch up.
PubX solves this nagging problem once and for all. We typically work with Tier 1, highly-scaled publishers and management companies. It is not within the human scope to design and deploy a system that maximises yield across tens, if not hundreds, of millions of auctions a day, in a market that is dynamic and fluid, with multiple factors determining price, so this needs to be tackled with AI through smart automation.
This confluence means that it has historically been very difficult for Publishers to care about pricing. Thankfully, this has changed with technologies like pubX.
Fundamentally, Publishers should care about pricing their inventory for the same reason that any organization should: If you let the buyers decide, they are incentivized to push prices as low as possible. Publishers that offer quality audiences in safe environments should be able to charge a premium, and buyers will be willing to pay it because the price in return for quality attention is correlated
Q2: Why do you think that flooring is increasingly a topic of conversation, like it was at Prebid Ascent in London?
A: Andrew
It’s no secret that publisher monetization is a constant battle, and that publishers are increasingly charged with getting more from less. The conversations we are having with customers are that this increasing pressure means looking for value where it might be hiding, and we see anywhere from 3% to 20%+ of net revenue being left on the table by manual/ static flooring strategies.
This is paired with an increasing ease of use of flooring technologies, and across PubTech vendors in general. There is the joke about a ‘single line of code’ install, but for pubX at least, this actually is the integration (or, even simpler, we can be activated by ticking a box in several wrapper providers).
The other component is transparency. Historically, flooring has been seen as a bit of a ‘black box’ with algorithms working away on things humans can’t see. We’ve spent a lot of time solving this problem, and both constantly A/B test to show we are driving value, and work with our customers to evolve our dashboard to ensure they see the metrics that matter.
So we see trust increasing in tandem with product need becoming more emphasized in terms of increasing yields. This combination is driving a massive uptick in demand, from both publishers and SSPs.
Q3: Why does pubX keep talking about PubTechAren’t you an AdTech company?
A: Andrew
We think that publishers deserve their own vendor ecosystem, with a focus on solving the problems that they actually face. What I mean is technology built to improve the efficiency of selling advertising, compared to the last 15 years of focus on “AdTech,” which is geared to improve the buying.
Our previous company was a Native DSP, and both technologically and culturally, we were set up to partner with the buy-side. We believe a mirror image must exist for the sell-side, acknowledging not just the different end of the spectrum, but the structural differences between the buyers and sellers of ads.
Noting the enormous scale of technology challenges faced by publishers due to the scope and complexity of monetization, we do not believe that all but the very largest publishers (with relatively large R&D budgets) can solve these on their own. That’s why we advocate for the creation of a viable PubTech ecosystem as a category to provide the point solutions that publishers need to thrive. In essence, we are category makers.
There is a clear trend that is gathering pace. Point solutions are morphing into full-service outsourced monetization companies, which makes sense, and we count many of these companies as pubX customers. But for the Tier 1 and mid-large Tier 2 publishers, this service misses the point: They already have very good tech and data teams managing the main thrust of monetization, but don’t have the resources required to go deep on specific problems. That’s the gap we fill with Modular PubTech.
Q4: What do you mean by ‘modular?”
A: Andrew
We believe in specialism, rather than generalism. Publishers don’t need McKinsey to tell them where they’re losing money.
Quo Vadis Thought Insertion: As McKinsey might say to a publisher, “Publisher programmatic problems are like mice. They go unnoticed until they start nibbling your cheese. For tech companies knocking on the publisher’s door, building a better mousetrap will not make the world beat a path to your door. Publishers who think they don’t have mice or ignore the mice won’t be interested—until the mice show up; then they need the mousetrap you show them today. This might sound like the musings of a Zen monk (or perhaps an investment banker from NYC). But most times the right way to sell tech is to be there early and often, and make sure the right people know who you are today.
They need practitioners to build tools to plug the gaps and reverse the past trend line toward the publishers’ favor. That’s precisely what we mean by “modular.” We believe that the most meaningful impact we can have for a publisher is to supercharge specific areas of their monetization operations, allowing them to focus on maintaining the core. Typically, we see publishers are spread very thin with a high range of responsibilities, some of which can be managed by external partners plugging into the central operation to solve.
If these outsourced solutions require wholesale replacement of the current stack, they bring with them increased cognitive load, which is exactly the problem publishers face in the first place. But by offering a specific solution that is easy to integrate, tech vendors can actually help publishers in a meaningful way.
Q5: Where do you see the future of publisher monetization?
A: Andrew
There is clearly much change coming across the industry, both for buyers and sellers. pubX is just one company using artificial intelligence to automate the most elegant solution possible. We are not alone and that’s a good thing for publishers!
But as with most things in Ad/PubTech, there is an immediate impact and then a slow roll-out. On one hand, we do not expect the day-to-day operations at publishers to change too much in the next 2-5 years (e.g., their programmatic mice are somehow not a nuisance yet), even if the partners they work with can solve the problem today.
On the other hand, the open web appears to be an unstable state, and if we cease to innovate on behalf of publishers, then the mice will likely eat all their cheese. From our perspective, that means publishers must adopt a culture of partnership with the right tech vendors that backfill innovation into their organizations.
Perhaps many years in the future, ads will be bought and sold without any human intervention, which is the vision first of Neal Stephenson (referencing the stock market) and more recently dystopian-ly by Mark Zuckerberg, but this relies on a huge amount of consensus and trust to build upon. After all, we are an industry that still can’t agree on what ‘counts’ as CTV, and we still eagerly await the year of the mobile, so I think fundamental change is a way out while incremental change is ever-present.
Quo Vadis Reminder: As our readers know, we like to lean on jobs-to-be-done (aka outcome-driven innovation). The jobs publsihers do will remain stable over time, but how jobs get done changes with ever innovation cycle (e.g., steam > electicity > transister > microchip > internet > AI (now) > quantum compute (next).
In the near term, we expect consolidation (both publisher and vendor-side) as the race to adopt AI gathers pace, but we hope that the main change,, for publishers at least, is for innovation to become a force from within again, and we can return to the spirit of the early web. Publishers are used to weathering external forces (such as the delays around 3rd party cookies) to make roadmap decisions. As a category maker, we are creating new efficiencies and expanding margins through the adoption of lean, AI-powered vendors. That is how publishers can retake the reins of innovation, and most importantly, regain the bargaining power they used to control.
Disclaimer: This post, and any other post from Quo Vadis, should not be considered investment advice. This content is for informational purposes only. You should not construe this information, or any other material from Quo Vadis, as investment, financial, or any other form of advice.