Alex Littlejohn is President APAC of Adconion Media Group. Here he discusses how their recent restructure meant the launch of Joost and Adconion Direct - its digital distribution platforms (DDPs). He also talks about how automation has brought innovation to the ecosystem and stresses that the importance of the service layer is still key.

Can you give an overview of the Adconion Media Group and it’s offering in Australia and across the APAC region?

Adconion Media Group is an integrated digital services and distribution company providing the corporate infrastructure and holding company services for all of our entities: Adconion Direct, Joost, RedLever and Adconion Platform Services.

We were founded in 2005 in Germany, employ over 500 people worldwide and operate out of 16 offices in eight countries.  Globally we reach 325 million unique users or one quarter of the total global Internet population every month. (comScore March 2011).

Our goal has always been to connect advertisers, brands, publishers and content owners with the right audience at the right time and across multiple devices using our proprietary optimization and targeting technology as well as specialized expertise within each business unit.

Earlier this year we restructured our business to develop two new digital distribution platforms (DDPs) - Adconion Direct and Joost, focused on the delivery of digital direct response and brand advertising. These operate in conjunction with our content and brand engagement agency RedLever and our technology and services arm, Adconion Platform Services.

How does the Adconion Media Group differentiate itself from its competitors? Is being independent a key point of difference?

Over the least six years we’ve always operated on a legacy of building and operating state of the art technology.  As we have evolved to a diversified digital services group, each business unit has developed its own position in the market with not only distinct technology but also leadership and culture. Our two DDPs, Joost and Adconion Direct have distinctly different competitor sets in the traditional digital publishing, distribution and ad network space, whereas RedLever focuses on creating and distributing great digital content, so their competitors are different again.

In an ecosystem dominated by Google, MSN, Yahoo! and Facebook, (and six major holding groups on the buy side), being independent certainly helps kick start many conversations but it’s not the key differentiator in any of our businesses.

All divisions share a strong focus on bundling great technology with great people and this is important because while automation and self-service platforms have brought great innovation to the space, it has also created the expectation or attitude that the services element is secondary. In APAC we've already seen several businesses fail due to under resourcing on this premise.    

As President for APAC what is your role and remit across the region?

My role is focused on managing Adconion Media Group’s overall operations in the region. We currently service all APAC markets from Australia however are always assessing our options for growing our regional footprint.

Does the Adconion Media Group have an exchange strategy? Are you likely to work with exchanges, DSPs or Agency Trading Desks?

We look at the move to automation as a trend that will continue to develop, so from our point of view having an exchange strategy is really a pre-requisite to stay relevant in this space. Different elements of our business have worked with exchanges since their inception five years ago and so the emergence of DSP's and trading desks to the region has not been a surprise to us. 

The challenges for ad exchanges to get traction in APAC are really the same as the rest of the world however they are amplified by the limited size of our market as well as the hesitancy of traditional media businesses to step outside their comfort zone and embrace these new technologies.

Ad exchanges have been operating in the region for several years however there has always been an issue with scale.   We simply don’t have the population in Australia to reach the same liquidity in the market as in North America and Europe.  
How developed is the ad network market in Australia and across the APAC region? Do ad networks have access to similar sized budgets as they do in the US and Europe?

The ad network model in Australia is developed in terms of innovation however share of expenditure in Australia is still dominated by the five to six key publishers. This is however changing and there has been marked shifts in budgets over the last two years as the advertiser’s appetite to embrace innovation and new solutions has outpaced the publishers’ ability to deliver it. 

We expect this change to accelerate even further in the next 24 months, not only due to the emergence of ad networks, ad exchanges and trading desks but also the continued growth of Social as a viable distribution channel and the successes of both Facebook and Google in marketing themselves as a viable alternative for display dollars.   

There’s been a lot of debate in Australia around whether or not ad exchanges will commoditize publisher inventory, resulting in downward pressure on CPM prices. What’s your view on exchange trading in the APAC region?

The entire premise of exchange trading and all of the associated benefits of targeting an audience rather than content through exchanges is that the market becomes more efficient and that the true value of inventory is paid. 

If an advertiser is not prepared to pay what the market is baring they simply won't get access to that inventory and likewise the publisher is not obliged to sell the audience if their minimum thresholds are not hit.  The role of an exchange and the associated buy types such as real time bidding and retargeting is really to match buyers and sellers at a price that suits both parties and that to me has to be a good thing for our industry.

I can see why some publishers fear commoditization and those businesses really have two choices to survive in the future. They either need to work hard to provide differentiated content to ensure that the prices they are charging are commensurate to the value of the audience, or in the event that they can't build differentiated or exclusive content then they should partner with ad networks, ad exchanges and technology providers to ensure that they leveraging new technologies across at least some of their inventory.

It’s not true to suggest that partnering with ad networks or ad exchanges will always lower yield.

Will the continued growth of video and mobile impact media buying strategies or publisher’s inventory availability on ad exchanges in APAC?

It is proven that more consumers are absorbing video content online and likewise there is no debate around the upswing in consumption via portable devices and mobile platforms. With this dual dynamic at play the emergence of video and mobile inventory on ad exchanges is inevitable.  The unknown is whether the market incumbents (in the display exchange and DSP space) can keep pace with the specialist video and mobile businesses that are already making a play to launch their own ad exchanges.

What trends can we expect to see in the display market in APAC over the next year?

I expect a flurry of entrants in the brand safety space as advertisers migrate more of their premium and brand marketing budgets on to ad exchanges and automated platforms.

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