Editor’s Note -- Be sure to read these additional interviews by Jay Sears with other media professionals who recently participated in Rubicon Project’s programming during Advertising Week Europe in London: Nicolas Bidon of WPP’s Xaxis, Steve Hobbs of Aegis’ Amnet, Marco Bertozzi of Publicis’ VivaKi and Cristina Sagarduy of Omnicom Media Group’s Annalect.

Today we present a Q&A with advertising automation executive Stephen Edwards of Hearst Magazines UK. Stephen recently participated in Rubicon Project’s programming at Advertising Week Europe in London.

Your Name: Stephen Edwards

Your Company: Hearst Magazines UK

Your Title: Group Digital Sales Director

SEARS: What flavor ice cream best describes your management style?

EDWARDS: Pistachio -- sophisticated and slightly nutty.

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

EDWARDS: Of the total, including print, this is £0.02. Of our digital revenues, this is £0.09. We are at the end of phase one, and partway through phase two. It’s happening, we have skilled and tooled up, we are ready to commit more and better inventory into the programmatic space.

SEARS: What was this number two years ago, in 2011? What will this number be two years from now, in 2015?

EDWARDS: a) £0.01 / £0.06 b) £0.04 / £0.20

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

EDWARDS: Most of what we sell is creative, premium display, with 6-10 week lead times, and high touch, manual solutions. Increasingly we are focusing on large, editorially driven custom solutions (again, all manual), supported by programmatic media delivery. We have extensive internal delivery departments that are increasingly used to help deliver a differentiated approach to creating custom solutions. Traditional selling of display becoming a less important area of our business.

SEARS: Tell us about Hearst Magazines UK.

EDWARDS: We are a large scale publisher of compelling content across multiple platforms. We reach, connect with and influence every demographic, at scale with inspiring and useful editorial, and deliver rich solutions in trusted and valued environments for our advertising partners.

SEARS: What are Hearst Magazine UK’s three biggest initiatives for 2014?

EDWARDS:

1. Multi-platform selling

2. Audience & programmatic

3. Native advertising solutions

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

EDWARDS: Of our digital business, I’ll be looking to 20% of our revenue to come programmatically, but that will be a more significant percent of our display impression base as we shift to a more creative sell.

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

EDWARDS:

3___ Operational or workforce issues inside the holding companies or operating agencies

___ Premium (direct order) inventory availability via programmatic

___ Lack of proper ad technology

2___ Alignment of agency compensation models

1___ Alignment of publisher compensation models

EDWARDS: The compensation models are a major hindrance right now, but will quickly go away. The longer term issues relate to industry dynamics, the way trading desks interact with broader planning and buying depts. within agency OpCo’s.

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

EDWARDS: Currently no, we are investigating an internal DMP solution, and potential of external DMP providers. We will be implementing 1st party data as part of our [Rubicon Project] Connect packages within 2 months.

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?

EDWARDS: Historically sales have not been comp’ed. We are changing that over the next month.

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:

EDWARDS:

1. ___ 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. X___ 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. ___ 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!)

EDWARDS: Option 3 is the general use, but we are starting to build tactical packages in the platform too.

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

EDWARDS: Premium Luxury placements and custom, proprietary executions (built and delivered by in-house devs).

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

EDWARDS: Yes, often. They lack detail, are almost always last minute, and target rates are invariably significantly below our market rates!

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

EDWARDS: A big area for us is how we use automated channels to fulfil our big ticket, custom creative executions. How we use data to identify the correct audiences to consume our top tier branded content is a big area of focus in the business. We also want to establish how we programmatize print over the next couple of years.

SEARS: Why is direct order automation so important? Is it important?

EDWARDS: Right now -- workflow efficiency, further down the line this will be more focused on dynamic allocation of premium inventory across most of our portfolio.

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

EDWARDS: In our business, US is in the lead in this space. Western Europe is behind, with the UK somewhere in the middle.

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?

EDWARDS: Artic, for the peace and the desolation -- good place to gather your thoughts and get some perspective!

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?

EDWARDS: Mark Creighton, Mindshare – opinionated, intelligent and articulate and knows his football.

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

EDWARDS: As if….

Thanks Steve!

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 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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