The acronym Demand Side Network was coined on this blog several months - before Epic Media decided to own the TLA (Three Lettered Acronym). The DSN best describes a network that is wholly focussed on advertiser/agency, and who lives and dies by its optimisation layer. Execution is key. Media IQ launched last year, and are a new breed of DSN in the European display marketplace, pushing this new ad net model forward. Here Lee Puri, Co-Founder at Media iQ Digital, discusses the MediaIQ offering, the DSN concept and why ad networks still matter.

Can you give an overview of the MediaIQ’s “evolved” network offering?

LP: I think the first thing I need to make clear from the off, is that Media iQ has not launched claiming to have come up our uber evolved model. We’ve not developed our very own secret ingredient that can be sprinkled across the network model magically enabling us to instantaneously deliver phenomenal results for every pound invested. Nor are we claiming to have a massively superior way of thinking that leaves traditional networks and their modelling chasing our tails. There have been some significant changes across the digital display market over the past year or so that have really changed the shape of the landscape, especially when it comes to accessing supply and technology.

On the whole I think most traditional ad networks have been slow integrating and in some cases even recognising the value that could be achieved assimilating some of the recent changes into their models. When you think of the traditional ad network model terms such as arbitrage, black box, comscore reach, blind buys, fixed pricing, etc – all spring to mind. At Media iQ our model has features such as RTB, full transparency, flexible targeting, variable pricing, agnostic technology stance, etc – our approach is much more current.

Agencies in particular are questioning the value ad networks bring in terms of performance and / or transparency these days. Our perspective is if we deliver scalable performance and genuine insight into what’s going on ‘under the hood’ of our campaigns – our value will exist. Smoke and mirrors has existed for years within the ad network model in the UK. Reach, algorithms, Nasa scientists plugging away in R&D, etc – people have bought and sold this for years and unfortunately many probably will continue to do so in the future!

That said, as a rule I think the next few years will be about trading when it comes to digital media. Who can deliver me my results? Who’s able to optimise my campaign most efficiently? Who can scale my business via display? Who’s adding value from an insight perspective? At Media iQ our whole business has been built to be able to deliver on each and every one of these questions.

What have been the big changes in the UK display market? And how is Media iQ addressing these new challenges?

LP: Firstly, the recent changes to our space have created greater opportunities in the Market place to fundamentally improve value for advertisers and publishers. This is an opportunity for all entities with our space. However to answer your question in a word “control” is probably the biggest change in the UK market.

The emergence of automated trading has effectively opened up the market from multiple perspectives whether you are a publisher, an agency, a client, or indeed a network. Gone are the days of the control residing with the powerhouse network that invested vast amounts of money in business development to effectively buy aggregated reach as their means of value. Likewise from an ad serving perspective if you wanted to launch your own performance network a few years ago your options were limited largely to a handful of schedule based ad servers that didn’t really rock anyone’s world on a performance level; or if you were fortunate enough to have six figure funds to hand you developed your own.

The UK network space felt like a closed market with little control on the supply and technology front unless you had serious money at your disposal. Innovation took a backseat to financial clout. Now of course it’s different. Everyone is getting on in the act with accessibility of media, data, and technology all effectively a given – and why not? Makes perfect sense.

Agencies, as are advertisers, are able to take control of network display buys for the first time and are building out their agency trading desks (ATD). Networks that previously lost out in the ‘Comscore’ bun-fight when it came to reach now have the opportunity to show their mettle as the playing field levels itself out. And of course, this shift of control is enabling new players, such as Media iQ to enter the market that have no supply and technology legacy issues to detract focus from performance. Additionally new players such as ourselves are nimble operations meaning the freedom to trade without significant margin pressures, and ultimately we are able to challenge the traditional values that networks have historically brought through a fresh and innovative perspective on things.

Your question on challenges the changes bring actually could be flipped as an opportunity for Media iQ. Agencies, rightly want to take more control of display buys themselves and it this is very refreshing to see them evolve. The challenge for all players is to take an entire budget and still deliver the advertisers volume and efficiency KPI's. The reality is there is always value in any entity who can deliver performance - as this will only add incremental benefit to clients - a goal agencies have been set up to and delivered since day one.

When you think of targeting strategies from retargeting to prospecting, execution strategies differs widely across each. The tactics needed to drive fresh interest are much, much more challenging on a campaign level. This is where Media iQ can start to add value. Our targeting strategies attack all areas of the display purchase cycle so our value on a campaign level is deep; prospecting new business is a key area of our offering.

In short, Clients will always need sales. Agencies will always need to be able to deliver these sales for their clients. Networks that have the ability to deliver performance will always be of value and top that up with genuine operational insight, we believe we add substantial value to agencies.

Your approach is focused on supply, technology and pricing. Can you provide a little more detail on how all three underpin the MediaIQ solution? How do you deliver scalable ROI?

LP: Our thinking is to never be fixed in the areas of supply, technology and pricing as this allows Media iQ the maximum flexibility to deliver optimum results for our clients. The minute you fix yourself in any of these three areas you compromise advertiser performance. The approach at Media iQ is to be 100% demand focused when it comes to every decision made on a campaign level. We access media on an impression by impression basis via a combination of RTB and managed buys; we target all areas of the purchase funnel through multiple technology features available within our platform; and we price campaigns based on their performance. What this all means for our clients is scalability on a campaign and performance level is entirely realistic. Campaign performance dictates every decision in our business.

What kind of transparency can you offer agencies in terms of inventory buys?

LP: Agencies these days are less interested in transparency on site level it seems and much more interested in ‘what’ is working for their client’s campaign when it comes the targeting strategies employed. There’s still a considerable amount of mistrust surrounding networks and tactics employed to deliver results. At Media iQ our thinking is to provide full transparency into the performance across the different elements of display. This ‘under the hood’ approach means client’s have the ability to get an in-depth level of insight into what is happening with their Media iQ spends, as well as what our thinking is when it comes to improving performance and scalability. My standard answer to clients that ask what kind of transparency can we deliver is for them to write their own insight brief. As you can appreciate this generally goes down well.

How is MediaIQ differentiating its model form other ad networks? How do ad networks stay relevant in this fluid market?

LP: Agreed the traditional ad network model is getting squeezed and will continue to do so until it changes it’s ways. However it’s too easy to simply discount traditional ad networks as dead on their feet right now. They have great coverage, excellent operational resource, and deep pockets for R&D. The ad network model for years has been predicted as being on the verge of collapse whether that was the question marks surrounding the value of post impression (this has been going on for what nearly half a decade), duplication of sales, duplication of inventory, etc.

The ad network is a resilient beast that for years has been an ingredient for innovation digitally – to presume the network is “knackered” could prove to be ultimately not the case. It’s often forgotten what a great service networks have provided to the buying industry over the years, without them, the industry would never have grown to it’s present size. Who has the deepest pockets currently in the market on a network level? Bingo – the established players! You’re telling me that they’ll just roll over and die in 2011? I’m not convinced. Their value propositions are shaky however their heritage suggests they’ll continue to innovate.

Back to Media iQ, we differentiate our model through performance and transparency. Our whole approach is to be constantly improving our model to stay ahead of the curve when it comes to ways of targeting and optimising display. We break down all levels of display providing full transparency in terms of how effective each targeting strategy adopted ultimately proves to be.

How do ad networks stay fluid? The biggest thing they can probably do is focus less on the sales pitch and more on delivering on their promise. If you are an exclusive network make sure your inventory cannot be accessed by 3rd parties easily. If you are a performance network reduce your reliance on retargeting. If you are a data network get your hands on as much first party data as possible.

Is there still a place for ad networks in the market, as agency tool-up for inventory aggregation and optimisation?

LP: I think networks that rely on arbitrage realised last year that the party was finally over. This year will be the year that sounds out the networks that simply rely on retargeting to deliver performance as this is the low hanging fruit for the agency looking to get in on the action. Moving forward the ad network that has the ability to prospect as well as deliver scalable performance will be able to sit comfortably alongside ATD on a plan. Ad networks will continue to play a key role in the industry.

Would you define MediaIQ as a demand-side network (DSN), in the sense that it is totally focused on advertisers and does have a direct relationship with publishers?

LP: As acronyms go (and there’s quite a few in this industry) this is probably the most relevant to our business at Media iQ. However we’re keen to not really be pigeon holed into a convenient sound bite to be honest. We deliver performance at the end of the day. If that makes us an ad network, an evolved network, an agency (?!), a DSP, an exchange specialist, a DSN – take your pick. Focusing on advertisers and their objectives however gives Media iQ a distinct advantage when it comes to delivering performance, in that respective we are fully demand side focused.

Is RTB a key piece in how you deliver performance for agency clients?

LP: RTB is a great ingredient in our business when it comes to the ability to access media on a controlled level. RTB has been widely eulogised as a game changer for display and I tend to agree. Our ability to limit risk and scale performing buys via bid tactics is a huge lever in our business when it comes to optimisation. That said, relying solely on RTB is a risk currently as there are plenty of quality sites that trade traditionally, for this reason we do not rely on solely accessing inventory via these means.

Our approach is to be completely agnostic on a media and data front; we access supply depending on what is working for the client – RTB and / or managed traditional buys. There’s some excellent supply currently available on RTB right now, with genuine opportunities for scaling buys. Hopefully as demand increases and players get more savvy in terms of optimisation and bidding tactics the average yields for publishers across this space will rise, meaning liquidity of supply will continue to increase, hopefully across quality publishers. See, RTB is not just about buying 5p CPM’s! At Media iQ the actual price of the impression is arbitrary – it’s the value of the impression on an ROI level that we are interested in.

You currently buy a lot of inventory in real-time. How important are bid-strategies in this optimisation process?

LP: Firstly It is key for the market to understand, bidding via RTB is not simply about buying cheap. Licensing your own trading software then using strategies to buy cheap is like driving your brand new Ferrari F430 and never leaving second gear. If this “buy it cheap” strategy is employed, then everyone’s ability to trade within this space will be limited as publishers will hold back.

Bid strategies are a key proxy for performance with RTB. In our case, bid strategies are the final part of the chain within our overall optimisation process. To be clear, our optimisation process ultimately determines the value that Media iQ brings. The beauty about this area is that literally day by day we are learning new ways of optimising through understanding different bidding tactics of weather that be manipulating an algorithm or manually inputting bids based on a variety of insights. The exciting aspect of bidding in the notion of determining “value” – if you determine that particular impression to be worth £50 CPM, then you bid it, if you determine it to be worth £0.10, then you bid that. The publisher ultimately is control of what they will accept.

Data is a critical piece in making automated buys work. How is MediaIQ leveraging client and third party data to make campaigns work?

LP: Media iQ currently trade with a wide range of data touch points ranging from the SSP’s, data aggregators, and revenue share deals with managed partners. Data is indeed important in targeting display buys, and there are some solid case studies of Media iQ penetrating audiences to lead to direct positive ROI for clients. The challenge perennially in the area of data is how big can you scale performing areas. There’s significant noise in the market right now surrounding data and it’s value to display. From our perspective we let performance of the data do the talking on a campaign level.