New York, NY – April 30, 2012 – Yieldex, the leading provider of inventory and revenue management solutions for digital publishers, today announced a key addition to its management team with the hiring of DoubleClick/Google veteran Andrew Rutledge as Chief Revenue Officer and former Mediamind marketer, Yael Avidan as Vice President of Marketing.

Yieldex is focused on working with premium publishers looking to leverage the company’s platform to increase the value of their inventory by providing hyper-accurate inventory analysis, forecasting and pricing. The company is coming off a year of impressive growth and recently closed a $10 million Series C Round.

“We’re building a world-class sales organization and these are two critical hires as we continue to grow our customer base,” said Andy Nibley, CEO of Yieldex. “Andrew and Yael make a powerful combination and they will definitely take our sales and marketing to the next level,” according to Nibley.

Rutledge brings a strong background in global sales and account management to the growing Yieldex team. He previously served as General Manager and Vice President of Publisher Development at PubMatic. He was Vice President of Marketer Sales at DoubleClick and Director, Agency and Advertiser Sales at Google.

Avidan comes to Yieldex from DG MediaMind where she was responsible for the long-term vision of the company’s offering and rolling out new products and services globally. She previously worked at Booz Allen Hamilton, a leading global management consulting company, where she consulted media companies. Avidan graduated from Columbia Business School with an MBA.

It has always been assumed by media industry pundits that brands could not become advertising-supported digital publishers because they did not reach enough eyeballs to make advertising financially meaningful to them. But that appears to be changing.

Take a look at the Comscore rankings for December 2011: Major brands are rapidly becoming publishers themselves. Amazon, eBay, Walmart, Sears, Target, Best Buy, and AT&T have all moved into the top 50 U.S. online publishers. Of those seven, Amazon, eBay, Walmart and Sears are already running ads on their websites.

It is true that these brands are nowhere close to the Facebooks, Googles, Microsofts and Yahoos of the world when it comes to advertising impressions and, no doubt, advertising revenue.

But these brands have been moving up the leaderboard for months and are now giving a number of other online publishers a serious run for their money, at least in terms of unique visitors and page views.

Consider that the seven brands listed above now represent 14 percent of the publishers in the top 50 publishers in the United States, and all of these brands were basically nowhere to be found in the rankings a year ago.

In December, each of them finished higher in the Comscore rankings than premium advertising sites like Yelp, Scripps, Fox News, The Washington Post, IGN and the NFL.

It may seem obvious at first blush, but it makes perfect sense for brands to leverage their massive audiences to become advertising-supported publishers. These brands have hundreds of millions, if not billions, of advertising opportunities on their webpages every month. Why not take advantage of those opportunities and pick up what could be found money?

Amazon, for example, has made a business out of listing and selling a wide range of products. Why shouldn’t it sell advertising on those same product pages? It would be kind of like those “end caps” at the supermarket: close to the context. Without the ad, maybe you wouldn’t have thought to buy that salsa otherwise. Let the best brands win, or at least, extract money from other brands to prominently advertise their wares.

And I’m sure that the big e-commerce sites like Amazon, eBay and Orbitz have figured out that the margins on advertising are a whole lot healthier than the razor-thin margins they get from selling retail products.

It would be foolhardy to think that advertising revenue on e-commerce sites would replace the product revenue any time soon. But accepting advertising would provide these sites with another revenue stream and one with very high margins.

It is also worth pointing out that brands usually have a fair amount of first-party data about the visitors to their websites. Setting aside privacy issues, why wouldn’t Bank of America target Mercedes ads to its high-net-worth individuals and Kia ads to its savings account customers?

The democratizing force of the internet forced traditional publishers to scramble to compete online with new digital publishers who built their brands purely in cyberspace.

Yahoo owned the online news space more than a decade before The New York Times created digital subscriptions. The Huffington Post perfected the art of aggregation and community. (Some publishers would have other choice words for what Huffington did.) And Pandora flipped the iTunes revolution with the oldest broadcast medium that still exists, offering music lovers the chance to create “ideal” radio stations.

So here’s a fresh example of the internet’s law of unintended consequences: Corporations who never had an interest in publishing may find that there is money to be made by sharing their customers with other brands.

It’s not exactly Macy’s sending you to Gimbel’s, but it’s pretty damn close.

(This post was originally published in Wired Opinion on February 14, 2012)

By Andy Nibley, CEO Yieldex

Let’s start with the argument that using “viewable impressions” improves marketing ROI.  Measurement vendors trumpet “CTRs are higher!” for the marketer, while “CPMs will rise!” for the publisher.  Let’s do a little math.  C3 Metrics claims that CTRs are understated by 179% because so many ads aren’t in view.  Wow – CTRs will double!  Except, publishers will charge double the CPM for “viewable impressions”, so the CPC (and ROI) is actually the same.  On the publisher side, Magid Abraham presented to the IAB (PDF) an example of 35m premium impressions selling at $5 CPM netting $175k to the publisher.  However, only 75% of those are “viewable” according to ComScore, so the eCPM is “actually” $6.67.  Wow – CPMs will rise!  Except that the publisher can only charge that higher CPM (CPV, actually) for “viewable impressions”, so their revenue stays the same.   And somebody has to pay the measurement vendor.  This is progress?

These “increases” may improve the perception of online advertising, but marketers and publishers are smart enough to know they don’t make any real difference.  Yes, the current impression standard is flawed in many ways, but we have over a decade of experience in setting rate cards, negotiating deals, and measuring results with it.  A new standard will have new as-yet-unknown flaws.  More importantly, it means creating new rate cards for CPV, and then redefining CTR (should it be VCTR?) with viewable impression as the denominator, so people don’t compare apples and oranges when looking at historical data.  The cynic in me says that this apples/oranges comparison is the main reason this idea is getting traction, but I can’t imagine anyone I know falling for that.  Other cynical reasons for the excitement may be that many agencies see this new metric as just the ticket to demonstrate to their clients that they “get” digital, and a few technology vendors see this as their path to revenue.  But in my view, this metric just adds another tax without creating any real value.

The real challenges we need to solve are laid out in the other 4 principles of Making Measurement Make Sense: rationalizing measurement across media, understanding online’s contribution to brand building, and generally making it easier to spend big budgets online and get ROI that makes sense.  Let’s focus our efforts on these challenges, so we can grow the market to $200 billion for everyone.

(This article originally appeared in the AdExchanger.com “The Sell-Sider” column on 3.29.2012)

Follow Tom Shields (@tshields), Yieldex (@yieldex) and AdExchanger.com (@adexchanger.com) on Twitter.

 By Tom Shields, Co-Founder & Chief Strategy Officer, Yieldex

On April 17, join the Great Debate on “Who Owns the Data?” co-sponsored by YieldEx and Google. Hear industry luminaries take on this thorny subject in a spirited debate moderated by IAB COO Patrick Dolan. Featured guests will include Tom Shields, Founder and Chief Strategy Officer, YieldEx, Jason Kelly, Chief Revenue Officer, Admeld, and John Montgomery, COO, GroupM Interaction. Refreshments will be provided. Seating is limited, so register now. There is no charge to attend.

Tuesday, April 17, 2012
6:30pm ET
IAB Ad Lab
116 E. 27th St. 8th Floor
New York City

Click here to register at the IAB site: http://www.iab.net/the_great_debate

For additional information, please contact Laura Baker at lbaker@iab.net.

Yieldex is focused on working with premium publishers looking to leverage the company’s platform to increase the value of their inventory by providing hyper-accurate inventory analysis, forecasting and pricing. The company is coming off a year of impressive growth and recently closed a $10 million Series C Round.

“With the addition of Andrew to the Yieldex team, we are continuing to build an outstanding sales organization with a history of proven success in yield optimization,” said Andy Nibley, CEO of Yieldex. ”We are very excited to have someone with Andrew’s vast experience to lead our sales organization and help expand the Yieldex platform globally.”

Rutledge brings a strong background in global sales and account management to the growing Yieldex team. He previously served as General Manager and Vice President of Publisher Development at PubMatic. He was Vice President of Marketer Sales at DoubleClick and Director, Agency and Advertiser Sales at Google.

In addition, Yieldex announced it has promoted John Nives to Vice President of Strategic Accounts. Nives has been instrumental in doubling the Yieldex client roster and together with Rutledge creates one of the most senior and seasoned executive sales teams in
the industry.

“The optimization recommendations in 3.1 build on Yieldex’s strength in providing accurate overlap and inventory forecasting, but takes it to a new level,” says Andy Nibley, Yieldex CEO. “We’re excited about being able to leverage our data to present actionable recommendations that drive revenue for our customers. Yieldex customers can expect to see more recommendation-focused features over the next several months.”

These new campaign optimization recommendations are based on Yieldex’s sophisticated forecasting technology. Yieldex forecasts capacity across the network, by analyzing non-sampled impression-level data. Plus, the platform emulates how the ad server will deliver all orders, including those orders that may be sold but not yet trafficked in the ad server.

With a highly accurate picture of the traffic and delivery landscape, Yieldex can suggest ways to improve delivery to maximize revenue, and offer ad operations teams the capability to test recommendations before they make them in the ad server.

By Anita Khosla, Director of Product Management, Yieldex

What’s the problem? The transactional system provides reporting. But transactional systems that create this data are not necessarily optimized for analyzing it. Summarizations and aggregations of the data lose critical fidelity that makes it impossible to ferret out many key insights. Third-party analysis tools will need every data point to provide high-quality recommendations. You cannot rely on your transactional system provider to keep up with the latest developments in Big Data analysis.

Systems vendors will claim that this raw data is huge, and costly to store and transmit. This is true, but they have to create and store it anyway, so this is a bit of a red herring. Besides, bandwidth and storage are getting cheaper all the time. All they have to do is provide access to you so that you can see your own data. This should be a minimal extra cost to them.

The tools to manipulate Big Data are becoming more prevalent. Whether you use a sophisticated yield management solution, or are building an in-house database, or just want to answer an occasional question that’s not addressed by your standard reports, make sure you have the data you need to run your business.  If you are choosing or upgrading your ad server or DMP, insist on complete raw data access as part of the contract. It’s your data.  Make sure you can do what you want with it.

By Andy Nibley, CEO Yieldex

Most publishers in this situation are cautiously testing and iterating, but are hamstrung by the ad hoc and highly manual spreadsheet analysis of their results.  Some channels, like exchanges and SSPs, are quite good at optimizing the value of the impressions they receive, but only see part of the picture. To really solve this problem publishers need a revenue management platform that allows them to get more out of their direct and indirect sales across all their channels.

Take for example the relatively simple challenge of comparing inventory value across channels.  Each third party system can report on what impressions they received, and how they valued them, but publishers don’t have a holistic view of direct and indirect CPMs in one place.  Sales should know the opportunity cost of the impressions they are bonusing as “added value” to get a deal done. They should be comparing the CPMs of the sponsorship deals they do with the potential CPM they could get on an exchange, to make sure they are covering the cost of sales.  And they should make sure they are pricing their guaranteed, rich media ads appropriately relative to a third party channel that offers neither benefit.

Inventory conflicts are also difficult to manage manually.  For example, the audience-targeting sales force may do a great job selling high-net-worth individuals for a high CPM.  But if that audience overlaps 90% with the sold-out Finance section, then there will be under delivery and finger-pointing.  A revenue management platform should forecast these overlapping inventory conflicts and resolve them before they become a fire drill.  Clear visibility into cross-channel sell-through also enables better packaging of inventory, such as including more audience-targeted display inventory with every video buy.

Many different channels can offer value to publishers when allocated appropriately, and a revenue management system can help make sure publishers make the right decisions.  This is not a zero-sum game – good revenue management can actually increase the value of many channels at the same time.  Every day we work with publishers tackling these issues, to help them ensure they are getting the full value of the audience and content they have invested so heavily to create.

 By Tom Shields, Co-Founder & Chief Strategy Officer, Yieldex

Publishers need a way to leverage the “best of breed” systems to sell and deliver advertising across these channels without creating multiple islands of inventory. They need to be able to:

• Forecast Capacity and Availabilities
• Manage Demand and Pricing
• Create Products
• Set Rate Cards 
• Grow Overall Revenue

That’s why a Unified Inventory Model is a smart solution that efficiently drives a publisher’s advertising model. Publishers need a tool that will make it easy for them to sell, manage and optimize their entire ad inventory as one cohesive unit. Trying to manage each component individually takes more time, energy and staff resources.

Unified Inventory Model: A single Unified Inventory Model that supports the selling, management and optimization of all of a digital publisher’s ad inventory as a single unit, independent of the multitude of delivery systems, data sources and sales channels.

The Unified Inventory Model is the fundamental building block that enables a publisher to package inventory and maximize yield while being agnostic when making decisions for the underlying systems and channels. It is the mechanism that allows every department that touches the advertising process to understand and optimize ad revenue as a single system instead of trying to manage individual channels and hoping for the best.

Publishers should consider integrating a Unified Inventory Model solution if they are looking to leverage their current assets and grow revenues by bringing efficiency to their yield management process.

 By John Barr, Chief Operating Officer, Yieldex

Establish Overall Inventory Value

The first step in establishing a pricing policy involves evaluating the overall value of a publisher’s inventory based on supply and demand, independent of context or buyer:

• Where are there hotspots in demand?
• Where is there oversupply?
• What is the inventory overlap?

When evaluating demand, it is important to account for overlapping sales requests for inventory.  For example, let’s say you have two segments – “in-market cell phone” and “in-market GPS” that are both highly sold through and overlap 30%.  This means that one third of the people who are in-market for cell phones are also in market for GPS so by selling one segment, you are taking away from the other.  It also means that Verizon and Garmin are technically competing for audience.  Publishers can leverage this type of competition to create upward pressure on pricing.

While most premium publishers average around 30% sell through across their network overall, most also have hot spots of demand where sell through reaches 100% during certain times of year.  These can be specific content areas, behavioral segments or geographic segments like DMA.  These areas represent the greatest opportunity for leveraging pricing to maximize yield.  The challenge for publishers is discovering where these hot spots of demand exist and having the discipline to stay firm on price to take advantage of the demand.

Evaluate Inventory Within the Context of a Deal

The second step in establishing pricing policy involves setting guidelines around pricing inventory in the context of a specific transaction or deal.  This level of analysis needs to take into account the specifics of the transaction:

• Who is buying, how do they value the inventory?
• What is the size/length of the deal?
• How far in advance are they purchasing?

Based on the overall value of the inventory previously established, it might make sense to tweak the price up or down based on the specifics of a particular deal.  For example, if a particular advertiser is placing a very large buy, it may make sense to offer a volume-discount based on the size of the deal.  But again, discounting only makes sense if the inventory is not high-demand.

Summary

Publishers need to think about pricing at two levels – establishing an overall value for their inventory and understanding how the specifics of a deal should influence inventory value.  Yield Management Solutions like Yieldex can help with establishing the overall value of inventory as well as surfacing pricing analytics at deal-time.

By Anita Khosla, Director of Product Management, Yieldex