Operative Blog

At the back of every publisher’s mind is a question: “Does my revenue reflect the true value of my inventory?” In far too many cases the answer is either “no” or “I wish I knew!” So how can publishers feel confident that they’re selling the right inventory to the right buyer at the right price? The answer: productization. To learn more, Amy Inlow, our blog editor, asked product manager Andrew Sullivan to explain what productization is all about.

AI: Let’s start with the basics. What is productization, and why is it important for publishers?

AS: Simply put, productization is deciding exactly what you plan to sell and being consistent about it. Consistency is helpful for your sales teams, your buyers, your inventory managers, your pricing team and your traffickers. If everyone is working with a commonly accepted product catalog with predictable pricing rules then it takes the guesswork out of everyday tasks.

In the end a good productization practice will result in a toolset that the entire organization refers to constantly. It should be a searchable catalog that the sales team uses to build proposals for buyers, the foundation for a comprehensive rate card, an implementation guide for campaign managers and a reference for analytics teams.

The goal is to strike a balance that gives buyers access to the audience they’re looking for on safe, well-defined content, while maintaining a level of structure and control for operations teams to traffic and manage campaigns. But most important, I think, productization lets publishers confidently break out of the constraints imposed on them by their ad servers so they can create products and packages that really reflect buyer demand.

AI: How does productization actually occur?

AS: There are a few fundamental aspects to the process. The first is simply segmenting all of the ad slots a publisher has access to so that they can actually be sold. In practice this means starting with ad server tags to make sure they’re following a consistent structure, and documenting clearly how to target any given site, channel, section, page, etc.

On top of that the publisher should take stock of all demo, geo, behavioral and other targeting that is feasible based on their technology stack, and make decisions about which they’re ready to expose to buyers. Are you unable to DMA target in some areas because your mobile ad server doesn’t support it? Does it really pay to allow age targeting on the home page, or is it better to limit that inventory to exclusive sponsorships? Determine the combinations of targeting that make sense for your business on each of your properties, and document those as well.

With those things in place, ongoing productization means maintaining an internally published list of buyer friendly products with documented controls around pricing, targeting, creative specs, buyer limitations – and then as much META information as possible to help sell the inventory.

AI: What are some of the business issues productization helps publishers address?

AS: A big issue is simply knowing all of the ad slots publishers have available to sell. After all, you can’t sell ad slots that you don’t know about. This may seem easy but it can be challenging when new tags are being generated every day, or if the inventory was acquired through partnerships with other publishers or networks, for example.

Another issue is delivering on customer expectations. Sales teams are often too quick to sell products that are driven by the unique requirements of the buyer. For instance, the buyer may ask for audience segmentation, frequency capping, or special creative that aren’t standard offerings. The operations team is left to figure out how to match what’s been sold with what can be delivered, and turn it around in a few weeks or days. This disconnect causes delays, discrepancies, and unhappy buyers. Productization can help eliminate that disconnect by clearly identifying what is available to a sales team. This doesn’t mean that your organization shouldn’t offer the new and bleeding-edge experience buyers want, but when a request comes in that doesn’t match up to existing products, clear product definitions should provide the time and context the publisher needs to really capitalize on the opportunity.

Inventory management also gets a boost from productization. Not only does the structure and consistency of the catalog make inventory management possible, it’s also a way to prevent campaigns with combinations of targets and ad slots that have no chance of delivering in full. Is it worth it to deal with the booking calculations for users of a certain age in a specific DMA on your travel section? If not, don’t sell it.

AI: How will a publisher benefit from productization?

AS: A huge benefit is the sustainable boost in revenue that comes from implementing enterprise-wide sales guidelines. There may be inventory that performs best when sold to particular industries, or through specific sales teams, or when offered through an exchange. Implementing controls that ensure inventory is sold with the whole yield curve in mind is the only way to raise the effective CPM across the board.

Rate card management tools also help publishers boost revenue because they set standard rates for all products by channel, including price goals and minimum floors. They also let publishers ensure that products are sold using the cost method (CPM, CPC, etc.) that delivers the best results.

Another benefit is improved reporting. Productization is instrumental for any critical revenue analytics. The holistic view lets publishers compare how their inventory performs across sales teams and channels. Since all sales teams, including performance and marketing teams, will be working with comparable products, publishers can actually compare apples to apples.

AI:  How does a publisher go about productizing inventory? What are the first steps?

AS: Any publisher doing direct sales today has been doing productization since their first IO was trafficked. Even if they haven’t been thinking about it as productization, all the placement lists, trafficking instructions, rate cards, creative specs and other materials that sit in Excel, Outlook, Powerpoint and people’s heads are the building blocks of a product catalog. The first step is to focus as an organization on the right strategy for the business and get buy-in from stakeholders to participate. From there it’s a matter of deciding on the technical infrastructure for managing the catalog and going through the process.

To really manage a robust enterprise level catalog requires an Advertising Business Management platform that can really bring everything together. It should provide the tools to generate and manage a product catalog, and ideally it will embed that catalog in the sales, trafficking and reconciliation process with hooks into business intelligence and inventory management.

Operative hosted a webinar on this topic Thursday, November 17.  Our guest speaker and presenter was Joanna Bloor, VP of Sales Operations for Pandora.  To obtain a copy of the webinar recording, please send an email to info@operative.com and we will email you the link once it becomes available.

About Andrew Sullivan

Andrew is the mastermind of Operative’s unique, multi-dimensional inventory management solution, as well as the company’s Ad Master Model and Campaign 360, solutions that enable publishers to better manage and optimize their product offerings and solutions set.  In his role as Product Manager, Andrew manages and oversees development for the software; acts as a liaison between sales, account management and development; and is continually designing solutions to meet ongoing publisher challenges.

Andrew began his career at Operative as a Campaign Manager, trafficking, managing and optimizing campaigns for both publisher and agency clients.  Within a year of joining the company, he was leading the systems integration team, working with some of Operative’s largest clients on software implementations.  Andrew also served as Senior Manager for Strategic Development, where he focused on new product innovation. 

Prior to joining Operative, Andrew worked as an Art Director at Agora Studios.  He holds a Bachelor of Science in Electronic Media, Arts and Communication from Rensselaer Polytechnic Institute.  

On Monday, November 7, I was fortunate enough to introduce a panel discussion at the IAB Ad Ops Summit on the topic of Consolidation and Operational Efficiency.  The audience consisted of Ad Operations leaders from a variety of different companies – large and small – and as a speaker, I was asked to provide content that would enable attendees to better, and more effectively, lead their organizations.

The panel was asked to address the following question:  Does the consolidation of the industry’s operating systems mean less complexity and more efficiency – or less choice, less competition, less innovation?

For me, there are three questions at the core of this topic:

1. Is consolidation really happening?
2. Should publishers have to choose between efficiency and innovation?
3. What is an operating system?

Is there Consolidation?

There certainly have been a good number of acquisitions in our industry, but innovation is also happening at a rapid pace.

Just look at the data…

For example, the number of IAB vendor members continues to increase.  Whereas there were 25 members in 2005, the number has climbed to 140 in 2011.  And the 2011 number is still higher than the 2010 number which cited 125 members.  Just last week, Brian Morrissey of Digiday mentioned in his “What if the Music stops in ad tech” article, that there are over 200 vendors listed on the LUMA Partners slide, and that’s just the display slide!  Here at Operative, the number of requests to integrate with our platform is three times what they were just two years ago.  These numbers and the activity in the space indicate to me, that consolidation is not happening.  The reality is that for every company that is bought, two to three are being created, and driving the need for solutions that solve very big problems.

So consolidation is just not happening, nor will it in the next five years, which means publishers cannot and should not rely on it to achieve operational efficiency.  In fact, M&A activity within the ad tech market is just getting warmed up.  While many people refer to the proliferation of solutions as fragmentation, a word with negative connotations, what they are really talking about is specialization.  In an industry that is changing as quickly as ours, a lot of individual innovators are required to help address the change.  We just need a way to manage it all, which brings me to my next question.

Everybody calls this Fragmentation. I call it Specialization.

Do YOU Have to Choose Between Innovation and Effectiveness?

The answer is quite simply NO.   You HAVE to do both.  You can NOT choose.

You must be able to run the car and change the engine at the same time if you want to survive in an industry going through this much disruption.  Our industry is complex but it’s not THAT complex relative to other industries.  The question should be how to balance innovation with operational effectiveness?

This may seem impossible to imagine today, but there was a time thirty years ago, when other industries were experiencing major challenges and pains managing their complex supply chains, demand channels and changing market dynamics.  But they overcame those challenges and pains, and they did it with business management software, or what we call them in this space, operating systems or platforms, that integrate with all suppliers, buyers and innovators.  These systems enabled these industries to effectively balance innovation with operational efficiency.

What is an Operating System?

Why do we even have to definite what an operating system is?  It’s because everyone calls themselves an operating system nowadays, which is creating more chaos and confusion.  We need to get beyond the hype and understand what it truelly means to have an operating system.

So how do we, in this industry, define what an operating system is?  By technical definition, an operating system:

• Is a program that manages other applications
• Is a Hub
• Integrates with other technologies
• Uses a common language

 

For a company, an operating system is a business tool or central hub that brings it all together.  It allows the company to grow and innovate, while being more efficient.  Our industry still operates in production systems and in order to become more efficient, to embrace innovation and effectively compete in this dynamic market space, we must begin operating in Operating Systems.

Imagine if when you bought a car from a dealer, they had to input the order into each and every robot on the manufacturing line.  That’s inefficient – HIGHLY inefficient, but that’s what we do in this industry, day in and day out, with our excel files and outlook databases.  We need to work differently, and simplify, in order to embrace change.

When I think about the state of our industry and I hear the pains and challenges customers are experiencing, I am reminded of the following quote:

“Nearly all men die of their remedies, not of their illnesses.”

- Jean Baptiste Moliére

This quote reminds me that solutions chosen out of expediency, out of desire to solve just the immediate problem, will quite often lead to longer term problems and pains.  It’s a good reminder to all of us in this industry that we need to think more broadly, and long-term, about how we solve or pains and problems.

Criteria for Choosing an Operating System

So how do we go about selecting an operating system and move beyond the hype?  Well for starters, you don’t want it to compete with you.  The system needs to be agnostic.  Can you imagine entering your business data into Windows, and Microsoft turning around and using it to create a competing business?

In selecting an operating system, be sure to ask yourself:

• Does the vendor compete with me?
• Do they want to replace me?
• Do they want to commoditize me?

The operating system must also be enterprise-wide, so that the entire organization is utilizing it.  This will create efficiencies and enable you to manage the entire yield curve.  And lastly, it must have scale so that it can integrate with other applications.

Operating Systems in Media

So if this is the criteria for selecting an operating system, then who are we left with in our industry?   We do not lack people and innovation to drive operational efficiency and innovation, but there is a lack of companies whose business models provide the infrastructure that enable YOUR efficiency and innovation, and prioritize driving YOUR company’s value above driving their own.   I believe we are left with only a handful of players – Operative, Media Ocean, Oracle and SAP among them.  While there are others on the image below, we do question their scale and ability to support you in the way a true operating system should, as defined above.

We believe the future consists of two main operating systems:  one on the buy-side and one on the sell-side.  And this is one reason we were excited about the MediaOcean announcement a few weeks back.

So how do Ad Ops Professionals Lead the Charge? 

The job of today’s Ad Ops professionals should be to take a step back and ask, what is my approach to building an efficient company that continually innovates?   And the answer to this question is how you lead and become the change your organization needs in order to effectively balance innovation and efficiency, or, to have your cake and eat it too.

Guardian News & Media Tackles Convergence with Operative.One

Andy Beale, Director of Technology for Guardian News & Media, discusses the company’s digital-first strategy, why they selected Operative.One to support that strategy and bring together both their print and digital media businesses, and what they hope to gain from using the platform in terms of product innovation and operational efficiencies.   Guardian is the FIRST publisher to bring together both their offline and online businesses onto one single platform, and one of the first to launch an aggressive digital-first strategy.

The deal between Donovan and MediaBank is great news and much needed. Our industry is blessed with a tremendous amount of innovation.  Unfortunately, many innovators in our space have lacked the foresight to adopt a long term approach to enabling successful, profitable relationships between buyers and sellers. As a result, these middlemen that disintermediate between buyers and sellers have fostered an unsustainable ecosystem that robs each side of the value they create. The merger is a welcome landmark step in filling a gaping hole in our space today—THE Operating System on the buy side.

Dealing With The Devil

As an industry, we have made a deal with the devil. Indirect sales channels burst onto the scene promising more revenue with less effort. Easy money, however, comes at a high price.  Traditional technology infrastructure claims only 2-5% of revenue, while these so-called revenue-boosting partners unabashedly take a hefty 30-70% ransom after all is said and done.

Buyers and sellers depend on these players to run their advertising business. But business infrastructure has been usurped by a myriad of brokers, each taking a cut along the way. First came the ad networks. Then came audience extension platforms and ad exchanges. Re-branded efforts produced yield optimizers and then RTBs.  As everyone knows, if you take a look at the business model, they’re still all networks who are paid at exorbitant rates.

Everyone argues about whether it’s the buyer or seller who holds the position of power, when in reality, these intermediaries hold both of them hostage. Not only are their margins at stake, but their ability to compete against traditional mediums are hindered. Where is the capital to invest in better content? Where is the capital to invest in better creative? It certainly feels like it’s going to the VCs, rather than to advertisers and publishers.

How is this sustainable? Buyers and sellers have known for years that they have been losing a disproportionate amount of revenue to indirect and remained concerned that their partners are commoditizing their data, audience, and inventory. In the end, they ask, “Are my partners intent on competing with me?”

Even the titans in our industry are banding together to fight against the middlemen—just look at the recent AOL, Yahoo, Microsoft announcement.

Change Is In the Air

Both buyers and sellers are fed up. The leakage from the spread between the buyer and seller has become large enough. It has come to the point where they are realizing they are mortgaging their future by not partnering with people that allow them to build value on their own. As Michael Donovan noted to partners yesterday, the deal is addressing their clients’ outcry for “a single, neutral and universal operating system for advertising technology”. Over the past several years, we’ve seen no different on the sell side—publishers are demanding an operating system that enables them to work more easily and directly with buyers while increasing their margins. It is high time that buyers and sellers repatriate their assets and capture revenue for the value they deliver. The key to doing so is to work with partners whose business model is to provide infrastructure, not to compete.

Now, we are one step closer to enabling our clients to succeed. The Donovan and MediaBank merger paves the runway to building tighter buyer-seller relationships by providing this much needed infrastructure on the buy side.

There is no doubt  MediaOcean still has challenges ahead—two different companies, two different cultures, a huge technology challenge to integrate multiple platforms. My hope is that this team knocks it out of the park. This is by far the healthiest thing in a long time that has happened in our ecosystem.

Hey CROs – Is Your Comp Plan at Risk?

The online media buying and selling process has changed – direct relationships with agencies and buyers has been reduced by the proliferation of ad networks, ad exchanges, social media platforms and RTB players that have cropped up en mass over the past twelve years, aiming to compete with a publisher’s direct sales channel.  Forrester research estimates that 30% of ad spending will be done via DSPs and RTBs in 2011, while Google estimates that more than 50% of online advertising will be done via these platforms over the next few years.

What does this mean for CROs at online publishing companies?  It means your compensation plan could be at risk.  If you are a CRO or senior digital media sales executive today, you are no longer competing head to head with other publishers to win the big RFPs.  Rather, you are competing with something much faster, and with a different skillset than your human sales team – you are competing with MACHINES.

Many of you have already embraced, or will embrace, this machine-based buying process.  You will compete with yourselves for inventory, most of the time by accident, because you lack visibility into the true value of your impressions.  In addition, many of you will compete or are already competing with machines today.  DSPs, exchanges and RTB players have the power to buy the same or very similar audiences, to the ones you represent today.  Your high reach, high frequency inventory, which used to be the reason you were so successful is now under fire by the machines and, because of this, the direct sales model of today and tomorrow is at risk.

Your revenue is at risk.

The way you and your sales people get compensated for deals will breakdown, if it has not already.

So how do you compete with something that’s faster than you, smarter than you, and doesn’t need sleep in order to be effective?

To hear what some of the leading online publishers think, come hear our presentation at the iMedia Agency Summit in Bonita Springs, Florida on Monday, May 23^rd.

Operative is hosting the Publisher’s Breakfast and will lead an enlightening, engaging conversation about the shift in online media buying and selling, and how these shifts are impacting, or will impact, your company’s revenue and compensation plans.

To help support the discussion, we brought together four of the “founding fathers” of online media – four gentlemen who are arguably the most recognized, well-respected thought leaders  in the field of digital ad sales. We invited them to participate in a pre-event Q&A and were pleased to even get on camera.  Our esteemed cast of characters includes:

• Nick Johnson from NBC Universal
• Kevin Arrix from MTV Networks
• Mark Westlake from Techmedia Network
• Brian Quinn from Triad Digital Media

During the session, you will hear this group talk about three things that publishers need to improve in order to grow their direct sales teams and drive more revenue through the channel.

These include:

1)    Plumbing – Compared to the machines, the current pipes that run water through publisher infrastructure are old and rotting – systems are fragmented and decision-making is hindered.  Imagine an Old Victorian water system, where every time there’s a leak, an entire street needs to be dug up in order to identify and locate the issue.

2)    Inventory – Inventory continues to become more complex to manage and understand, and often comes from multiple data sources. It’s rare that a seller knows exactly how much inventory is available for a segment, target or piece of inventory at the time of proposal.  That’s unacceptable.

3)    Product Packaging – It’s hard to create meaningful packages to takes to customers and impact your average price given issues 1 and 2.

We hope to see you next week at the iMedia Agency Summit…!

iMedia Agency Summit Publisher’s Breakfast Details:

-       Date: Monday, May 23d

-       Time: 8:00 – 9:00 a.m. EST

-       Location: Hyatt Regency Coconut Resort & Spa, Bonita Springs, Fl.

-       Room: Blue Heron Room

Do you depend on someone to run your business whose business goal is to eat your lunch?

Andrew Wallenstein of www.paidcontent.org just published a great article yesterday about Netflix’s recent 10-K filing in which they disclosed the risks associated with their Amazon partnership.

It is obvious that Netflix is facing serious competition from Amazon in their primary business.  But what was disclosed is an additional threat from Amazon, and risk to Netflix.  Amazon, according to the article, provides “mission-critical” web services that enable Netflix to remain in operation.  This same supposed “business partner” is about to become a major competitive threat to Netflix as it looks to offer an online streaming video service to customers that will compete directly with the Wall Street darling (NFLX).

Netflix depends on Amazon to allow their business to scale.  Netflix depends on Amazon to innovate their services so that they can better compete against Amazon.  If they don’t provide that innovation, Netflix will be at a disadvantage.  Is that a safe bet?

And what bets are you placing every day?

David B. Yoffie and Mary Kwak wrote, in their famous Harvard Business Review article entitled, With Friends like These: The Art of Managing Complementors, that “Executives often overestimate common interests with complementors and repeatedly under-estimate the potential for conflict.”

How often are we (the digital ad industry) depending on competitors to provide sufficient innovation to our mission-critical platforms, and protection of our data, in order to grow our businesses? Do the people that have access to your data want you to win?  Do the people that provide your business systems – from business intelligence and inventory optimization, to user data and customer data – really want you to win?  Or do they just want you to win long enough until they can commoditize your value?

Here are some questions you need to ask yourself to determine if you are putting your primary business assets at risk vis-à-vis a current or potential “partnership:”

-          What are my most critical assets?

-          Who has access to them?

-          Who do I depend on to monetize them?

-          Do they compete? Now? In the future?

-          Are my “frenemies” going to share their innovation, or keep it themselves?

-          What would happen to my business if they stopped serving my interest?

Once you have the answers to these questions, you will be better equipped to know a) whether or not there are risks you need to disclose to investors and/or b) whether or not you should continue to engage in those relationships at all.

Co-opetition is part of our life, it is here to stay.  But engaging with partners that compete or may potentially compete with your primary business and source of revenue is a significant risk that should be carefully evaluated.  Furthermore, you must have the foresight to know whether or not these “partners” have the potential to one day become a competitor, forcing you to predict the future market landscape by running if-then scenarios. Simply disclosing the risk to investors is not enough – and in fact, it’s probably too late.  Understanding the implications and risks before you even have to disclose should be the first step businesses take in evaluating their mission-critical business relationships.

So who’s guarding your henhouse and what will you have to disclose to investors in your next 10-K filing?

I would love to hear from you on related scenarios that may exist in our space where there is exposure of critical business assets and/or partnerships because one partner is preying on the other(s). Comments welcome here or via email.

http://paidcontent.org/article/419-what-worries-netflix-about-amazon-isnt-just-competition/

AdExchanger: Operative CEO Leo Discusses New Operative.One Platform And Automation In Ad Ops

AdExchanger.com: Seven years as CEO and President for one company is not the norm for digital.  Why does it make sense for you?

ML: I love my job. I work with talented people, great clients, and we’re solving a huge problem that publishers, networks and agencies need solved. Our future is bright.  Why would I do anything else?

What problem is Operative solving today?

There are two certainties in our space:

1. The industry cannot thrive until it becomes easier to do business with.
2. Continual innovation is a requirement for survival.

By giving media companies and their partners freedom from the complexities of the digital value chain, Operative enables both.  Since the ERP evolution of the 1980s and early 90s, you will not find a leader in any other industry that has not brought together all of their value chain processes and systems. This revolution, which is a ticket to the game for everyone else, is only just getting started in digital media.

Without a platform upon which publishers can innovate, digital innovation creates chaos. We provide a business management system that supports the adoption of new innovation (new products that can be offered to advertisers) in the context of the publisher’s current way of doing business, yet integrated all on one platform.

Can you drill down from the big picture and discuss the three biggest pain points that you’re solving for clients today?

Sure. We are focused on addressing the following problem areas:

1. Demand-side planning:  With so many different technologies and channels available to monetize inventory, it can be difficult for publishers to understand what and how much is available to sell, and determine the best way to package and price. There is pain associated with managing and optimizing price, as well as pushing inventory to these channels.  Operative.One solves for this.
2. Supply chain management:  The amount of innovation that comes out of this industry is staggering. Ad production technologists like DoubleClick, Rubicon, and BlueKai are a constant source of innovations, increasing the value we bring to advertisers. But if those innovations are not integrated into the business, then chaos ensues.  Production systems are not business systems, and media companies simply cannot grow if they manage production systems independent of one another.  Operative.One enables effective cross-platform execution providing a single view across all production systems.
3. End-to-end ad execution:  For many publishers, product packaging, sales, operations and finance processes are connected manually, and internal systems that handle inventory, CRM and financials don’t talk to each other.  This limits sales productivity, reduces time to meeting impression goals, and causes billing discrepancies. We connect all business processes and systems so publishers can effectively package, sell, traffic, manage, optimize and collect revenue on ads.

Operative.One represents one place to manage demand, one place to manage supply, and one place to execute digital ads.

How has Operative pivoted its business to meet client needs over the past 10 years?

Operative has always been focused on getting the job done for its clients. Ten years ago, we began as an ad operations services company, and over the last six years, we have done significant work to automate those jobs. While the jobs remain the same (whether performed by a client’s staff or ours), our platform creates efficiencies and lowers transaction cost – ultimately getting the job done faster and cheaper.

What is advertising business management?  How do you see this evolving in the next 1-3 years?

Business management platforms are well established in industries outside of digital media. Leaders in business management solutions include SAP, Oracle, Netsuite, Salesforce… and even Wide Orbit, which serves stations and networks. For the advertising industry, business management solutions free media companies from the complexities of the value chain by integrating all of the processes and systems necessary to package, sell, traffic, manage, optimize and bill ads.

In the next 1-3 years, the industry will focus more on the business of advertising, not the system or the pain associated with industry innovation and so many disparate technologies.  Does anyone really need to know how the sausage is made? Does anyone question how a TV ad makes it on the air?  Has a Jaguar salesman ever concerned himself with how (or if) the ABB 6-axis robot is installing the sunroof before it leaves the assembly line?  Don’t publishers succeed when sales people stop talking about ad tags and start talking about how their products maximize brand value?

If you were running a media agency today, what key strategies would you put in place to survive and prosper in the future?

I would ensure that my teams were focused on marketing problems, not technology problems. It’s important for agencies to get control over variable costs and understand how to leverage technology without being in the weeds with it. The number of transactions required to execute a digital campaign are an order of magnitude more than most any other media. If you do not have control over the transactions, it’s difficult to grow a profitable business.  Agencies need to be partnering with providers who have built a business on helping agencies manage transactions, and can take infrastructure off their plates so they can grow profitably, and focus on what’s most important: client relationships and great creative.

What are the funding needs for the company? Profitability? Any plans to go public?

We are profitable and we plan to go public.

Is the DSP model impacting your business? How?

Yes, Operative.One plays an important role with any innovation that our clients choose to adopt.

Ad networks, DSPs, direct to advertisers (and more to come) – these are all viable channels for monetizing advertising assets. The key is having tight controls and a unified view of distribution channels, whatever they may be.  Having one business system ensures media companies can make the right decisions to effectively price and allocate inventory across channels.

What are you seeing from clients today in terms of current momentum?

Publishers are increasingly more focused on direct sales. The deal size is going up and CPMs are going up. And our clients don’t want to give inventory to those who commoditize it.

For publishers looking to get their arms around their data, what do you advise?  And what do you tell them regarding ad network/exchange relationships?

The secret to data is having it all together. Getting it is easy. Analyzing it is hard. The only way to properly analyze data to have it all in one place.

Follow Mike Leo (@rmikel), Operative (@OperativeInc) and AdExchanger.com (@adexchanger) on Twitter.com.

Adotas – Answers Served: Operative Discusses Solbright Acquisition

ADOTAS – On the heels of the launch of its Operative.One platform for connecting the demand and supply sides, Operative acquired Solbright, which develops software assisting publishers in managing online ad revenue and workflow. According to CEO Mike Leo, the acquisition will bolster Operative’s ability to deliver efficient and effective infrastructure for media companies.

Leo took a few minutes to talk about the acquisition as well as the ways in which Operative.One stands out from the pack of end-to-end digital marketing solutions.

ADOTAS: What interested Operative in Solbright?

LEO: Their clients and their employees.

How does this acquisition fit in with Operative’s aims?

This gives the advertising business management category much-needed scale, while Operative gains significantly in market share and a strengthened competitive position. We estimate to now be managing more than 30% of all digital ad spend through our solutions.

The result is greater value delivered for our clients. A more scalable overall business and R&D organization means a broader and deeper set of integrations with demand and supply-side systems, accelerated product innovation, and improvements to the already high level of client service and support we provide today.

What kind of updates will clients notice when Solbright’s technology is integrated into Operative.One? What will be the most useful?

We’ll be working with each and every Solbright client over the next year to upgrade them to our Operative.One platform. Operative.One provides significant next-generation advantages –- for example, a robust product packaging and selling architecture and an enhanced platform for third-party system integration (e.g., Salesforce). The employees who built Solbright and have been working closely with Solbright customers for several years have joined Operative in the continued development and support of Operative.One.

How does Operative.One stand out from other end-to-end digital advertising solutions?

We’re the only ad business management platform that brings it all together for media companies and their partners. We’ve essentially created a “hub” that allows clients to eliminate the complexities associated with the digital value chain by integrating all systems and processes necessary to package, sell, traffic, manage, optimize and bill ads. In a nutshell, we are connecting critical functions (from product packaging to invoice) with our clients’ ecosystems.

What attracts media companies and publishers to Operative.One? How do their concerns differ from advertisers?

Operative takes care of business infrastructure for media companies, so they can focus on what’s important: product innovation and client relationships. They are also starting to realize that continual innovation and operational effectiveness are inversely proportional. We provide a platform upon which to innovate without the associated chaos.

Advertisers are demanding for new ways to deliver content; e.g., mobile, Tivo, iPad, which is one of the drivers behind the current pace of digital innovation and, hence, the chaos. The amount and pace of innovation that comes out of this industry is staggering — ad production technologists, such as Google, Pubmatic and FreeWheel, providing a constant source of innovations for increasing the value we bring to advertisers. But those innovations must be integrated into the business, rather than the business being a slave to the innovations.

What’s the key to providing transparency on every transaction level?

Data. But data is the easy part. Getting it all in one place is the challenge.

So who is easier to deal with — the supply side or the demand side? If you had to side with one in a fight, who would you go with?

You cannot choose one over the other. Ask Apple. Providing value requires a robust ability to seamlessly combine components of the value chain to create true scalable value. But value cannot be realized unless you can manage all distribution channels with a high degree of rigor.

These are not new problems and the solutions already exist. Demand planning and supply chain management go back to the first farmer’s market. They just need to be translated for our space. That is not an easy job, but the scale we have achieved allows us the resources to get the job done for our clients.

DIGIDAY:DAILY – Operative Buys Solbright With Sites Set Far Beyond Digital

by Melinda Gipson on Wednesday, October 20, 2010