Andrew Moore is European MD of SpotXchange. Here he discusses the SpotXchange proposition in Europe, RTB in online video, and the potential of private marketplaces.

Can you give an overview of the SpotXchange offering?

At SpotXchange, we have created one of the largest global marketplaces for online video ad inventory and work directly with publishers to offer an auction-based marketplace of quality, brand-safe inventory.

Each month, SpotXchange runs campaigns for over 200 major brand advertisers, reaching more than 110 million unique users globally in more than 20 countries.

From our inception in 2007, SpotXchange has led innovation in the exchange space for video - we were the first video marketplace to be fully RTB-enabled and pioneered automated optimization for video to drive campaign performance.

This means every video impression in the SpotXchange marketplace is accessible via an auction giving buyers a platform to make ad decisions at an impression level in real-time and publishers the ability to respond to the growing demand for real-time bidding (RTB) and attract multiple bidders for their inventory.

Just as automated buying is gaining traction in display advertising, we believe video will increasingly be bought on an impression level, against pre-defined audiences via an auction.

Can you give some insight into the SpotXchange European strategy?

As European Managing Director, my role is to drive the adoption of our real-time exchange platform by agencies, ad networks, DSPs and publishers across Europe.

Our aim is to establish SpotXchange as a leading European online video marketplace with the infrastructure and scale to serve the growing need for quality video inventory via RTB.

To do this, we will focus on building out a robust network of local publishers and build a team that will deliver market leading service and insight to both buyers and sellers.

We want to be the go-to video ad marketplace for advertisers looking to increase the reach and effectiveness of their online video campaigns using superior optimisation technology and targeting capabilities, also allowing them the choice of buying model that suits their needs.

For publishers, we offer a secure platform to trade their inventory in real-time whether they choose to use our open exchange or create a private marketplace that they control.

SpotXchange has been offering its video advertising technology and services to the UK market since 2009. However, to grow our business and capitalise on the shift towards automated buying of video, we needed to establish a local presence to better serve our advertising and publisher partnerships.

The market for online video advertising across Europe is growing rapidly - spend on video is virtually doubling every year across Europe with the big 5 markets (UK, Germany, France, Spain and Italy) accounting for 64% of the total spend (Source: IAB Europe / ScreenDigest)

So, our strategy for Europe has been to establish a HQ in London to build the scale and infrastructure to serve both the UK market and act as a foundation to roll out a local presence in the key markets across Europe.

Does Spotxchange offer RTB on all video inventory? What formats does your RTB offering support?

Yes, SpotXchange was the first video marketplace to be fully RTB-enabled so our 100% of our inventory is available to RTB bidders. The vast majority of our video inventory in-stream pre-roll but we also support in-banner ad formats.

We have seen incredible growth in the adoption of our RTB solution for video, and we find that RTB is quickly becoming more mainstream because it helps advertisers greatly reduce waste, increase performance and simplify the media trading process

In the past few months, SpotXchange has seen the number of RTB bid requests increase by 120% to 4.6 billion per month globally.

Are we still in the early days of RTB adoption in the European market?

As was shown at the recent DMEXCO conference in Germany and Ad Trading Summit in London, we are already starting to hear more about the adoption of real-time bidding in Europe as Agency trading desks and DSPs continue to drive demand.

RTB is reaping encouraging results for advertisers in Europe and in the UK, it is forecast to account for 15-20% of display ad spend this year, up 3% from 2010 (source: comScore).

Display is definitely leading RTB adoption but we are now seeing major DSPs integrating video into their platforms and today we are working with several including TURN, DataXU and TubeMogul with more to follow.

Are you seeing more publishers adopting RTB as a means to trade video inventory?

Publishers are still to be convinced that RTB can deliver benefits and this was highlighted in the recent survey by PubMatic / Digiday which showed that whilst 62% of online advertisers had used RTB, only 20% of publishers have made their inventory available in real-time.

Maintaining control remains key and increasingly private marketplaces look well placed to provide an effective solution to protect yield and avoid channel conflict.

Can the private exchange give publishers the controls to trade inventory in real-time?

The private marketplace is allowing the publisher to select advertising partners looking to access their inventory via an RTB integration. Within this agreement, the publisher maintains control over availability, floor pricing and volume.

Critically, the publisher maintains the direct relationship with the buyer and therefore can use RTB access to drive greater spend.

This arrangement works well for premium publishers that have both a high demand for their inventory and a strong brand proposition to run a stand-alone marketplace.

We are seeing more and more evidence that this solution really works with the latest example being the Rubicon / Econsultancy Online Publisher Survey which showed that 78% of publishers that utilised a private marketplace saw an increase in revenue and an improvement in yield.

Why should a publisher trade premium inventory on a real-time bidding exchange? Wouldn't the publisher be better off doing direct deals, given the scarcity of premium video inventory and the sky-high demand?

It is common for premium publishers to have high demand for their video inventory whilst maintaining high yields. However, selling premium inventory via an exchange does not equal a reduction in price.

The benefits of real-time bidding go way beyond price and often the real benefit for publishers is that they can use RTB to reduce the “friction” involved in trading.

Think of automated trading as being the most efficient way to transact media; there are real efficiency gains to be had.

Ultimately, media buyers increasingly want to buy video on an impression basis where they can overlay data and targeting in real-time and publishers that work in this way will benefit from early mover advantage.

SpotXchange is one of the few companies in online video with the infrastructure, experience and real-time bidding capability needed to set up a private marketplace and help publishers develop the skills and knowledge to capitalize on the shift towards RTB ahead of the market.