Fabien Magalon of La Place Media -- The Jay Sears Interview

Continuing a recent series of interviews with global trading desk heads that culminated in his Six Advertising Automation Trends for Buyers and Sellers, Jay Sears, SVP at Rubicon Project, now hears from the sell side—leading publishers across the United States and Europe.

Today he speaks with France’s leading publisher co-op La Place Media.

Your Name: Fabien Magalon

Your Company: La Place Media

Your Title: Managing Director

What Flavor Ice Cream Best Describes Your Management Style:

Vanilla cream with pecan nuts. Classic, demanding and bits of sweetness.

SEARS: On average—out of each $1.00 of advertising revenue received by your company, how much today is from automated or programmatic channels?

MAGALON: La Place Media manages the programmatic (RTB trading desks and RTB ad networks) and indirect demand (tag-based ad networks) of our premium publisher sales house. We make $0.80 every $1 at La Place Media from programmatic.

As LPM is managing exclusively the indirect revenues from our publishers, we estimate that our publishers are currently making from programmatic anything between $0.05 and $0.30 (of) every $1.

Programmatic demand is now fully adopted across the top 100 advertisers in France. We estimate that 85% of the top 100 advertisers in France have been using programmatic in 2013.

SEARS: What was this number two years ago, in 2011?

MAGALON: This number was $0.15 (of) every $1 in 2011, and $0.30 in 2012. The growth in 2013 has been tremendous.

SEARS: What will this number be two years from now, in 2015?

MAGALON: We expect this number to be above $0.90 within LPM and probably anything between $0.20 and $0.50 for our publisher sales houses.

SEARS: Describe how most media (all media, digital + non-digital, non-programmatic media) is sold by your company today.

MAGALON: La Place Media nearly only sells through programmatic channel now. Our publishers however are traditional media sales houses with strong offline footprint. They are major TV channels, radio stations, newspapers organizations, weekly magazines. Most of the way they sell is regarded as manual from our perspective.

However TV advertising sales for example (and I can’t explain into much detail) has implemented incredibly efficient processes over time that provide some of the benefits in terms of automation and efficiency that we see programmatic provide in digital. TV sales processes are not as inefficient as we would expect from a digital perspective, even if they look at our programmatic efficiency with envy sometimes.

SEARS: Tell us the about La Place Media.

MAGALON: Our vision at La Place Media is to build a Premium Media Universal Exchange. We make premium media inventory available at scale to marketers through programmatic channels on all devices and all formats (Standard Display and Video, Mobile and Desktop devices).

Our ambition is to become the gravitational point of access for quality supply on the French market and consequently attract quality demand, across all screens, on all formats. We aggregate the supply from 24 major premium sales houses in France and rep more than 150 sites. We deliver 4.5BN impressions per month and reach more than 30M unique users.

PLEASE TELL US:

· Percentage increase, advertising revenue via automated systems 2012 vs. (expected) 2013:

o MAGALON:100%-150%

· How many employees do you have globally [headcount]?

o MAGALON:Worldwide eight people in 2013; Europe eight people in 2013.

SEARS: What are La Place Media’s three biggest initiatives for 2014?

MAGALON:

1. Mobile – we are opening our exchange to mobile in-app inventory, both on standard banners and interstitials, only on premium media brands in France.

2. Video – we are opening our exchange to pre-roll video inventory, only on premium media brands in France.

3. Programmatic Premium and Holistic Yield – our top 25% demand is now highly competitive with the bottom 25% of our premium publishers sales, consequently we are now willing to more intelligently allocate impressions between the direct channel and the indirect channel.

SEARS: By 2015, what percentage of total advertising sales across your company will be from automated or programmatic channel?

MAGALON: Within La Place Media we expect that close to 100% of our sales will be from programmatic. For our premium publishers’ sales house, I can’t really comment for them, but I would guess that 20% to 50% will be programmatic.

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

MAGALON:

1. Other: Rev-share business model of the RTB technology partner is a blocker to adopt programmatic premium for premium publishers: a 10% fee on a $1 campaign is ok, whereas a 10% fee on a $15 campaign becomes a blocker.

2. Lack of proper ad technology: the current technology providers are incomplete. Historical primary ad servers can’t do programmatic well enough, whereas programmatic supply side platforms can’t do what a publisher expects from a primary ad server well enough.

3. Alignment of publisher compensation models: We can’t ignore the human factor. Ideally the compensation model should be agnostic and compensate sales people whatever the channel used to deliver.

SEARS: Tell us about your first party data strategy—do you currently have a DMP (data management platform) for your first party data?

MAGALON: Yes. We have a DMP to build our first party data. We added a DMP solution in May 2013. Deployment has been accomplished across 150 sites in a couple of months. Impact on sales is that we now make around 8% of our total revenues from campaigns using data we collect from our DMP. We only sell a bundle of Media + First Party Data, and we charge 15% to 30% more than naked media. We expect this number to grow to 15% next year.

SEARS: Salesforce compensation. Do you compensate your salespeople for every dollar or Euro sold, regardless if the media is sold via insertion order (IO) manually or via an automated channel?

MAGALON: Our salespeople at LPM are compensated on programmatic and automation. At our publisher sales houses, it varies; some publishers are compensating their salesforce on their direct sales efforts, as well as the LPM sales. Some are not. It really varies from one publisher to the other.

SEARS: Direct sold inventory is often sold three to 12 months in advance. Which of the following choices best describe how you use direct order automation and Connect—check all that apply:

MAGALON:

1. X__ We use direct order automation and Connect to leverage our first party data and bundle it with our media;

2. ___ We use direct order automation and Connect to make available an “electronic version” of our media kit and related editorial calendar inventory packages (example: holiday or back-to-school themed packages) to buyers;

3. ___ We use direct order automation and Connect to make available premium placements such as home page, section pages and other opportunities that are not available in the open market;

4. X___ We use direct order automation and Connect to make available IAB Rising Star ad units and rich media ad units.

5. ___ We do not use direct order automation and Connect and believe all inventory should be sold via auction (with appropriate business rules, of course!)

6. ___ Other, please describe:

MAGALON: We use Connect as a platform to expose our key offerings to the demand market: Rich Media formats, rising stars, bundle Media + Data.

SEARS: What advertising opportunities will never be sold via advertising automation?

MAGALON: I believe over time every standard ad unit will be potentially sold through programmatic. Even takeovers will potentially be programmatically accessible. However it will take a long time to automate tailor made, multi-channel, multi device operations. I am thinking for example of a marketer making its brand visible across one premium publisher on all channels, including offline, and all devices.

SEARS: Have you received “Programmatic RFPs” for your inventory? What do these look like and how are they different than traditional RFPs?

MAGALON: We have received programmatic RFP’s. They look a lot like traditional RFP’s except that the buyer doesn’t commit to any spend. Maybe it’s a maturity problem in France, but buyers are asking to make inventory available through programmatic at an agreed price, with an agreed guarantee of delivery (first view), but without any guarantee of spending. We call this a one-way guarantee, and it’s not acceptable under these terms.

SEARS: What should top publisher chief revenue officers (CROs) do to build their direct order automation (also known as programmatic premium) and programmatic selling business with trading desks and operating agencies?

MAGALON: We have very little experience on programmatic premium. We believe that there is still a technology gap and a business model gap to make it work efficiently for the sell side.

Again, the rev-share model can’t work in order to start programmatically transact very high CPMs.

SEARS: Why is direct deal automation (also known as programmatic premium) so important? Is it important?

MAGALON: Programmatic Premium is important because it’s

- a way to increase yield for publishers

- a way to improve efficiency and indirect costs associated to inefficient direct deal’s current process

- it’s likely to be an ask from the demand over time

However we separate the topic of dynamic allocation from the topic of programmatic direct.

SEARS: What global markets are the leaders and laggards in programmatic?

MAGALON: (The leaders are)US, UK and … France!

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?

MAGALON: I would reach an insanely sunny beach in Zanzibar.

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

MAGALON: Maurice Levy from Publicis. Legend.

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

MAGALON: France has a culture of very long business lunches. That didn’t go away with programmatic. J

Thanks Fabien!

Jay Sears is Senior Vice President, Marketplace Development for the Rubicon Project. Sears workswith 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 with the 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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