A Q&A with Adelphic's Michael Collins -- The Jay Sears Mobile Leader Series

Today we continue a series of Q&As with mobile advertising leaders leading up to the Rubicon Project conference on Wednesday, February 26, 2014 from 9am to 1pm at Mobile World Congress in Barcelona, Spain. The packed agenda includes two panels: “Ad Agencies, Mobile and the Automation Opportunity” featuring leading mobile first agencies and “Mobile First DSPs -- Why? And Why Now?”

If you plan to be at Mobile World Congress and would like to attend the Wednesday conference, please send an indication of your interest here or contact sears@rubiconproject.com.

Today we continue our mobile leader series with Michael Collins, CEO of Adelphic, a mobile demand side platform.

Your Name: Michael Collins

Your Company: Adelphic

Your Title: Chief Executive Officer

What Flavor Ice Cream Best Describes Your Management Style?

Longford’s Chocolate ice cream. Everyone makes chocolate ice cream, but Longford’s, a local ice cream store in my home town, has redefined this flavor by focusing on all the details, using only the best ingredients and never yielding on quality.

SEARS: In mobile today, how much of each $1.00 spent on mobile media by one of your advertisers is spent on automated or programmatic channels?

COLLINS: Excluding Search, the range for our clients is $0.01 to $0.80. On average, for major brands, the amount would be $0.10. Agency adoption of DSPs or other programmatic platforms, which is still nascent, is the major variable in the growth of this number. It is worth noting that a significant portion of mobile ad network buys are executed through the RTB-enabled exchanges, so the amount of media bought as programmatic is much lower than the amount executed as programmatic.

SEARS: For mobile, what was this number in 2011?

COLLINS: $0.01

SEARS: For mobile, what will this number be in 2015?

COLLINS: $0.75. With the exception of branded content executions, home page takeovers and similar executions, the rest of the spend will be programmatic.

SEARS: App vs. mobile web. The app world is fueled by cost-per-install advertising dollars from the most popular apps such as King.com’s Candy Crush, yes or no?

COLLINS: Yes, the big app players are contributing a significant portion of current mobile spend, although “fueled” may be too strong a word. Also, many big brands are starting to measure the results of their mobile spend on some type of CPA, even if the “A” is an engagement metric like a video view or time spent on the landing page. So, from a campaign execution standpoint, the difference between brand campaigns and app download campaigns is narrowing.

SEARS: The mobile web world suffers from an inability to track users and is waiting for better targeting and more brand dollars to arrive in mobile, yes or no?

COLLINS: No. Targeting and tracking on the mobile web is greatly improved, which is evidenced by the shrinking price differential between mobile web and app inventory.

SEARS: It seems like many of the leading agency trading desks have been slow to embrace mobile. After they solidified their work in display, most trading desks focused on building their video capabilities. What will be the catalysts for trading desks – and their operating agencies at the biggest holding companies – to place more focus on mobile?

COLLINS: Whatever was the catalyst, it has already happened – all the holding companies are going full steam to get a mobile solution in place, if they haven’t already.

SEARS: Are the big carriers still relevant in mobile? Everything now happens “off deck,” SMS and call revenue is declining, yet carriers sit on a treasure trove of data. What are the biggest threats and opportunities for carriers and which ones around the globe are the most progressive?

COLLINS: The change in Net Neutrality could make the carriers significant players again. If they control the toll both and the data, expect them to use both to their advantage.

Globally, TurkCell sets the standard for a carrier in mobile advertising. They moved earlier and big to use their data to launch a category defining mobile advertising offering and became the dominant player in their local market.

SEARS: The future of user ID and cross device targeting. What do your advertisers use today for user targeting? Which companies (or types of companies) are in the best position to facilitate user ID and cross device targeting?

COLLINS: Adelphic specializes in user ID. In fact, we have the patent on “cookie-less” User ID on network devices, including mobile devices. We deploy this technology on behalf of all our clients. Strong user ID allows us to bring to mobile many of the strengths of online – retargeting, highly efficient bidding, deploying third-party data at scale, broad and persistent user profiles – and cross-device targeting and attribution.

SEARS: What are the top three “data points” either missing or of dubious quality in mobile media?

COLLINS:

1. A persistent and standard identifier, although the lack of one is good for my business

2. More and more accurate location data

3. Reliable third-party impression and click tracking

SEARS: Tell us the about Adelphic:

COLLINS: Adelphic is a mobile DSP and audience solution for agencies, trading desk and brands. Our clients include several of the holding companies, large independent agencies and major web players and we execute campaigns across NA and Europe.

SEARS: PLEASE TELL US:

· Overall managed budget (media spend / automated media only) for expected 2014 GLOBAL:

o COLLINS: As a private company, we do not release this information.

SEARS: What are Adelphic’s three biggest initiatives for 2014?

COLLINS:

1. Expansion to Asia

2. Integration of new inventory types – DOOH, wearables, automotive

3. In store attribution for mobile campaigns

SEARS:

Apple vs. Google.

iOS vs. Android.

Closed vs. Open.

“The 1%”[Apple] vs. the “Middle Market” [Google].

How do you and your clients think about this dichotomy and how does it impact your advertisers? And how do global markets with a preponderance of feature phones even fit into this mix?

COLLINS: At the end of the day, scale and relevance wins. Google delivers greater scale and relevance than Apple, so my bet is that Google beats Apple in advertising. That said, both the Android and iOS audience is fully accessible without the involvement of Google or Apple, so the ultimate winner should be a platform that can optimize across both these audiences, and the rest of the mobile universe, in real-time.

SEARS: To drive adoption of direct deal automation (programmatic premium) and use of the programmatic channel, what are the major impediments to overcome? Rank these in numerical order:

COLLINS:

_4__ Operational or workforce issues inside the holding companies or operating agencies

_1__ Premium (direct deal) inventory availability via programmatic

_5__ Lack of proper ad technology

_2__ Alignment of agency compensation models

__3_ Other: __Performance as compared to standard exchange inventory

The performance of direct deal (premium) inventory is not consistently better than standard exchange inventory and it is generally more expensive. To be comfortable to spend for this inventory, a brand must be comfortable with assigning the majority of the value to the impression, not the engagement.

SEARS: How are RFPs used in your business? What does a “Programmatic IO” or a “Programmatic RFP” look like?

COLLINS: RFPs for our DSP are generally similar to any other SaaS product. Managed service campaigns, which are a common way for agencies test our platform, are typically executed under an IO similar to an IO that would be issued for a network buy.

SEARS: What should top comScore publisher CROs do to build their mobile direct order automation and programmatic selling with your trading desk and operating agencies?

COLLINS: Establish a private exchange, make the Deal ID available to the DSPs, and attach a lot of data to each request. After that is done, it all comes down to price and performance.

SEARS: All of you work for global companies. What global markets are the leaders and laggards in mobile programmatic?

COLLINS: The US dominates. Western Europe is also strong. China has tremendous potential, but a very large amount of spend is still going to the big players as part of larger, multi-channel deals, so amount of spend available for programmatic is still small.

Tell us a bit more about you:

SEARS: If you could travel for pleasure anywhere in the world, to a place you have never been, where would you go?

COLLINS: Bhutan

SEARS: If you were trapped alone on a desert island and needed to choose one ad holding company CEO to accompany you ( other than your own holding company CEO), which CEO would you pick and why?

COLLINS: John Wren. I want his business.

SEARS: When is the last time you went out for a three martini lunch?

COLLINS: Never

Thanks Michael!

Jay Sears is Senior Vice President, Marketplace Development for the Rubicon Project. Sears works with leadership and business unit heads across the company to expand Rubicon Project's potential market. Sears has also served as General Manager, REVV Buyer, where he was responsible for global relations withthe buy side including ad holding companies, ad agencies, agency trading desks and demand side platforms headquartered in North America. Jay can be reached at jsears@rubiconproject.com.

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