Matěj Novák of the Czech Publisher Exchange -- 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 the Czech Republic’s leading publisher co-op the Czech Publisher Exchange.

Your Name: Matěj Novák

Your Company: Czech Publisher Exchange (CPEx)

Your Title: MD

What Flavor Ice Cream Best Describes Your Management Style:

Chocolate with chili.

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

NOVÁK: If we talk about Czech Publisher Exchange, which is a co-op of five leading Czech online publishing houses to sell programmatically, it is $1.00, as we only do RTB. Talking about Centrum Holdings, one of the publisher members and a pioneer of RTB on the Czech market, it currently ranges from $0.03 to $0.06 depending on the season. I believe this number will go up quickly as the programmatic market is nascent in our country – e.g. the share of ATDs (agency trading desks) in our revenue is under 20%.

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

NOVÁK: $0.00 (or CZK 0.00) Programmatic was virtually nonexistent in the Czech Republic at that time.

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

NOVÁK: For CPEx, it will stay at $1.00. For the publisher members it’s going to be $0.15 – $0.20.

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

NOVÁK: As CPEx, we sell mostly in open marketplace. The private marketplaces are just starting in the Czech Republic and there is only little knowledge of the principles and benefits of the PMPs especially on the clients’ side of the business. To increase the share of programmatic premium a lot of educational work has to be done. We have yet to achieve one of the main benefits of programmatic advertising – the simplification of sales and delivery process – due to limited experience with almost every single PMP we establish requiring a debugging process to make it run smoothly.

SEARS: Tell us the about the Czech Publisher Exchange.

NOVÁK: Czech Publisher Exchange is a cooperative of five leading Czech online publishers who joined to sell programmatically to better face the competition of global players like Google and Facebook. Our main advantages are the best quality inventory available within the programmatic space in the Czech Republic and more than 70 % reach of the Czech population. We plan to offer first party publisher data soon.

SEARS: What are the Czech Publisher Exchange’s three biggest initiatives for 2014?

NOVÁK:

1. First party data. Besides joining to sell programmatically, we also want to offer publisher first party data. We believe it is very important for the development of programmatic trading as a data market is virtually nonexistent in the Czech Republic.

2. Expansion. There are currently five publishers participating in the co-op and we’ll probably add more players.

3. Publisher trading desk. We are still unsure whether we will launch it, but it is definitely a topic we are discussing.

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

NOVÁK: 100 %.

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:

NOVÁK:

2___ Operational or workforce issues inside the holding companies or operating agencies

3___ Premium (direct deal) inventory availability via programmatic

4___ Lack of proper ad technology

1___ Alignment of agency compensation models

5___ Alignment of publisher compensation models

NOVÁK: The biggest issue for the Czech market is definitely providing the motivation for media buying agencies to enter the programmatic trading. Currently their business model is mostly based on commissions which they get from the media and the change will certainly not be easy.

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

NOVÁK: We have no DMP yet, but it is the most important initiative that we see for 2014. We believe it makes a lot of sense to share a part of the data across the publishers involved in the co-op as the competitors here are Google and Facebook, both having a huge coverage of the online population. We can be competitive only if we manage to reach a similar coverage scale and are able to offer tailor-made user segments to our clients.

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

NOVÁK: The Czech Publisher Exchange currently does not have its own sales force. We do not need any sales people for the open auction. The private marketplaces are sold by each publisher separately.

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?

NOVÁK: The direct order automation is not quite there yet in the Czech Republic. I expect it to rise during 2014. We will set up the workflow to reflect the market demand.

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

NOVÁK: Well, never is a bit too definitive, but the non-standard, custom made creative formats will not be automated by definition. The other area is branded content. The automation of the rest is in my opinion just a matter of time and of the technology catching up.

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

NOVÁK: We got a very small number of requests through [Rubicon Project] Connect. The clear advantage I see here is that the sales process is very streamlined and it takes relatively little time to get from the RFP to the deal.

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

NOVÁK: I see several reasons promoting potential growth here: 1. Efficient audience targeting combined with premium formats and placements is in my opinion the advantage that will drive the programmatic premium on our market. 2. The workflow simplification is definitely interesting, but the market is not there yet – everybody is only now starting to learn how to use these tools.

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?

NOVÁK: Island, Patagonia, Sierra Nevada. I love mountains and wild nature where you hardly meet anybody. I love seeing a country in the dusk with no artificial lights.

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?

NOVÁK: Well, I’m not really sure. I’d have to Google which one of them knows how to light a fire without matches.

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

NOVÁK: I don’t remember, but I promise to do one soon to have a better answer for the next interview.

Thanks Matěj!

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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