ExchangeWire caught up with Nate Woodman, IPONWEB's recently appointed GM of demand solutions, to discuss how his role was created to help bolster the ad tech firm's profile among clients, in a two-part interview. 

In the first instalment he lifted the lid on IPONWEB's working processes, plus explained his stance on the much mooted 'ad tech power game'. In this instalment he focuses on IPONWEB's bids to reduce the inherent tensions within automated media trading.

EW: Earlier you explained your view that a lot of clients will want to manage their data more securely, which could suggest you see clients taking ad tech in-house (as some have elected to do). Is this the case?

NW: Some clients will want to build a brand trading desk, and some will go down a hybrid road, where they work closely with the agency. All of those ways work fine for different customers with different objectives. Some brands that are purely digital, like an ecommerce provider, will want to plug into a trading desk and go straight ahead and buy media. But we're not interested in things like media planning. That's not what we do, nor is it what we are interested in doing.

We think it's necessary to have agency partners, I want to make sure that's clear.

EW: A lot of people are talking about companies such as Google and Facebook, and their ambition to own ad tech, and quite critical of their tactics. What's IPONWEB's stance on their increasing involvement?

NW: We have to play by their rules. If Google or Facebook are going to create a more closed environment, then that's just a reality for the market.

The real question for people to ask themselves is: 'What will make them change?'

Would it be if WPP said; 'I don't want to buy media like that any more!'? Maybe.

Would those companies be more open if there was an advertiser that had their own technology? Maybe they would be more willing to integrate then?

There's a big question over why Facebook and Google are doing this.

Is it a backlash against the lumascape, where they are more or less saying to the market that we need to do this as there's too much money being taken out of the market in the middle?

If so, that's fine, after all both of those companies are publishers. The reason I make these points is that I wonder if they would be less inclined to prefer a closed ecosystem if it was the advertiser's own technology in there.

At IPONWEB we can build that system for the advertiser if they need it. But we can also do that under the direction of an intermediary or an agency that have clients that are right for having a bespoke solution. It's just a case of who has the most leverage with Facebook or Google; either the principal who owns the data, like an advertiser, or a large holding company, like a WPP.

EW: 'Data leakage' is increasingly an issue that's coming up in public discussions in ad tech circles, what's the advice you offer clients on it?

NW: When you talk about it there's a rise on both sides of the fence that applies to the publisher and the advertisers. Publishers are concerned about the data leaking out and about the value of the audiences they've built using their content. Really it's about leaking cash, and not capitalising on the full value of what they've built.

From an advertiser's perspective, they are concerned about losing out on cash going out the door; it's about advantage. So when an advertiser accepts a pixel from a dodgy network on their site, that network has the ability to classify the users visiting the brand's site, and then in essence, re-sell them to their competitors, which dilutes the initial brand's competitive advantage.

In addition, if an advertiser is using a system with trading algorithms that can determine that a brand from one vertical performs well on other sites, and that same system is then used by a rival brand from the same vertical, then it's the technology system (and arguably the initial brand itself) that is indirectly enabling the competitor.

So the data leakage is on both sides, and as an industry we should be talking more about how to alleviate it. Agencies, advertisers, and publishers should be talking more directly about it.

If this happened more often, then we'd be in a better position to have publishers strike agreements with either advertisers, or their agencies, to be compensated for that. When I say compensation, I mean it could be like a guarantee of minimum spend per impression. But once that happens, they can then negotiate buying data-usage rights along with your media.

I see that happening in the future, but what needs to come about in order for this to happen is the advertisers, agencies, and publishers need to be of like-mind. Otherwise, with too many people in the middle, there's just too many layers, and it's just not going to happen. Maybe what we need is a kind of controlled chain of who owns what, between the advertiser and the publisher.

EW: IPONWEB representatives have also spoken a lot about resolving inherent conflict of interest among players in the ad tech industry, during recent months. Can you explain more about this, and how IPONWEB proposes alleviating this?

NW: When you are running a campaign you are trying to satisfy multiple objectives at the same time. One of the things that we've realised is that when you try to optimise to improve click-rate [the aim of the ad tech intermediary], or towards margin [the agency's main concern], then those are conflicting margins. If you try to optimise towards conversion [the advertiser's ultimate aim], and you have an algorithm that is optimising towards click, then those are conflicting decisioning processes. Simply, the algorithms don't point in the same direction.

So, as they head towards these different singular goals, you have an ad operations executive that sets up one line-item to achieve one set of goals, then another to achieve a separate one, etc. That person's only option is to balance them by allocating more and less budget each day throughout the course of the campaign, until they begin to meet their goals.

What our U-Platform does is alleviate the need for someone to manage the campaign on a daily basis. From the outset of the campaign, it lets the campaign operator state their goals, and set their restrictions. For instance, you can say I want to deliver the campaign in full, then have a CTR of a minimum of 1.1, and then the third thing I want to do is maximise my margin. Basically, it allows for a sequencing of what is important to you. Instead of optimising a singular objective and then manually balancing it on a day-by-day basis. It balances between those objectives, depending on the priorities you set.

To achieve that, is to be able to forecast what the future will hold. For instance, if you're happy with CTR midway through a campaign, and you want to sacrifice a little bit, and focus on viewability or cost instead, then the system needs to be able to confidently forecast that it can also continue to meet the CTR goal come the end of the campaign. So instead of having to run 35 line-items, you can reduce it to just one per country.

A lot of people in this industry don't understand that when you give something in one area, you have to take from another. There are always trade-offs between the different objectives.

You have to say to someone sometimes that what you want is unobtainable. If someone wants more clicks, they'll have to spend more money. If they want to improve viewability, then they'll have to increase your bid. What this does is balance all of that. The value proposition to the campaign operator is simplicity. This is something we're bringing to market now, I don't think anyone else does that yet.

EW: IPONWEB has operated in an almost 'stealth mode' to date, does your appointment reflect the company looking to take more of a 'leadership position' in the industry?

NW: We kind of have taken a thought-leadership role already, for instance, we took an active role in supporting DigiTrust, and have been considering the 'tier-one IAB membership' [in the US, where the IAB has only recently been made open to ad tech firms], and generally will continue to act responsibly and support the industry. Maybe you'll see our logo figure more prominently at events, and maybe we'll take a few more speaking roles. But ultimately, we think we're better off as a company when our clients find us. This 'pre-qualification', means we're happy to stay in that position, as a specialised service. It's a situation that benefits everyone.