Stuart Spiteri Head of Media Platforms, Asia Pacific, Google talks about the growth in Ad Exchanges across the APAC region, how agencies, advertisers are getting on board and how automated buying can increase publisher yield up to 188% more than using traditional sales channels.

Can you give an overview of your role and remit within Google APAC?

I am responsible for the Google suite of technology products that agencies use to plan, buy, optimise and report on their display advertising here in APAC. My goal is to partner with agencies to help them deliver the best results for their advertiser clients through the use of Google tools.

What kind of traction is the DoubleClick Ad Exchange getting in the APAC marketplace?

We’ve seen great traction on the Ad Exchange across the world.  In the last year the number of transactions on the Exchange has tripled and we have hundreds of premium publishers selling inventory. We’re also seeing strong growth in real time bidding, which now accounts for more than 60% of spend on the DoubleClick Ad Exchange. In APAC , we’ve launched the Ad Exchange in Australia, and have agencies and DSPs buying locally.  We are also signing up publishers and agencies across Asia.

What are the biggest challenges for the growth of the ad exchange eco-system in the APAC region?  Supply?  Demand?  Market education?

We know from other markets around the world that audience and exchange based buying ecosystems take a few years to develop.  There are a number of requirements for audience based buying to really take off: trading desks, audience buying objectives from advertisers, inventory supply on audience basis from publishers and networks, and the ability to integrate data in real time.

In APAC we are seeing strong interest from the agency community to buy based on audience and in an exchange environment. As agencies and advertisers start seeing significant uplift in campaign performance, we’ll see more dollars coming online. From a market education standpoint, the agency community is further ahead in terms of understanding the value of exchange and audience based buying. That said, publishers are quickly catching up and we’re continuing to work with publishers to explore ways the exchange based selling can be a complementary sales channel for them.

How would you articulate the benefits of exchange buying to local advertisers, agencies and media buyers?

Exchange buying delivers better results for advertisers. With the DoubleClick Ad Exchange, advertisers can reach the audience they want and they can do it in real time. That means they’re not wasting impressions and they can measure their results almost instantly. The Ad Exchange has a new real-time bidder feature that allows buyers to use their own data, optimization and ad serving technologies to bid on their desired inventory on an impression-by-impression basis, choosing only the sites, audiences, or particular type of ad space they want to reach.

Are you seeing more regional publishers now looking to work with the Ad Exchange?

Yes, we’re seeing more and more APAC publishers starting to sell inventory on the Ad Exchange. We’re also seeing some publishers use the Exchange in more ways than just selling their inventory, such as using it as a way to expand their inventory base.

How would you respond to publisher concerns that auction-based trading leads to sales cannibalisation – and increased pressure on CPM prices?

At Google, we have eleven years of experience seeing auction pressure drive returns for publishers. Auction-based trading helps publishers make more money from their sites. We now have hundreds of premium publishers using Ad Exchange in the US and Europe and, on average, they make 188% more from the ad space they sell on the Ad Exchange then from the same ad space they sell on an ad network. That’s because the Ad Exchange makes their ad space available to a large pool of advertisers competing for their inventory.  In some cases these buyers may value that inventory more highly than their direct clients. Through a unique process called “dynamic allocation,” the DoubleClick Ad Exchange compares in real time the value of the highest-paying ad in the Ad Exchange with any ads that the publisher has entered into DFP (such as ad network deals) and chooses the highest paying one.

With no prevalent ad network layer in the APAC display market, is it likely that advertisers and agencies will quickly see the potential in data-driven display buying?

Absolutely. Ad networks are part of the ecosystem, and whether there is one ad network or multiple ones, they continue to have an important role in packaging, presenting and executing campaigns. Exchanges create more transparency and control, and buyers enter with their own objectives.  If they are winning auctions and finding their audiences, advertisers and agencies will see the value and continue to spend more in data-driven display.

Will we see local exchange trading specialists and agency trading desks emerge over the coming months?

Yes, definitely.  We’re already starting to see this across APAC and it’s only going to continue.

Is supply the biggest issue for Ad Exchange – or are both demand and supply weak in the market?

We have plenty of supply on the Exchange with the Google Display Network. All of the Display Network inventory is already on the Exchange. The demand side is gaining momentum.  We’re seeing a greater number of briefs from the agency community and advertisers are more willing to trial audience based and exchange buying. As agencies become resourced on their trading desks we believe this trend will accelerate and agencies will see an increasing number of briefs with audience rather than placement, contextual, and behavioral requirements.

When will see video ad inventory on Ad Exchange made available to regional buyers?

We recently announced that we’re starting to allow some Ad Exchange buyers to run in-stream video ads on YouTube using real-time bidding technology. As we’ve mentioned before, we’ll look to expand this small trial in APAC.

What industry trends will emerge over next 6–12 months in the APAC region?

Over the next six to twelve months I believe we’ll see a proliferation of exchanges, DSPs and yield managers in APAC that are all working to improve transparency and performance of display advertising.  Each holding company will have an APAC based trading desk, and the percentage of spend being directed towards audience based buying will rise dramatically.