Facebook only bought video ad-tech startup LiveRail in July 2014, but it has already become a key weapon in its ad-tech arsenal, extending its advertising offer to publishers and advertisers beyond Facebook’s own platform.
Last month Facebook made the bold move of extending LiveRail’s offering, to add new mobile capabilities. It means LiveRail now poses a serious threat to Google’s DoubleClick in the SSP (supply-side platform) space.
We sat down with LiveRail’s head of international, Yoav Arnstein (its first employee outside of the US) to discuss what’s next. Our interview has been lightly edited for brevity.
Business Insider: You joined LiveRail back in 2013. How has it been since coming under the fold of Facebook last year? How separately do the businesses run, and how autonomous is LiveRail from Facebook?
Yoav Arnsteain: I feel we are autonomous, but we are well-integrated in a way that helps us aim much bigger. Our focus on publishers is still there, but we want to do much more. And in order to do much more, to really redefine how publishers are looking at our technology, we want to leverage a lot the tech Facebook has found to be good for both advertisers and consumers, and helping to take that ad technology to other publishers.
In order to do that effectively, LiveRail needs to be part of the Facebook organisation.
BI: AOL announced this week that it is rebranding all its separate ad-tech products under the “One by AOL” brand. Do you foresee this happening with LiveRail and Atlas — moving under the Facebook umbrella?
YA: At this point in time we are really happy with the current positioning and we feel it makes sense for what we’re trying to do in the market. It’s difficult to comment on what would make sense for us in the future.
BI: At the F8 Developers’ Conference last month, you announced some big upgrades to the LiveRail platform — extending from just monetizing publishers’ videos, to their mobile apps too. You’re not yet extending that capability to desktop display or mobile web display, why not?
YA: There are probably two main reasons. The first is that we feel that publishers are mostly struggling in the mobile environment: This is where the change they are going through is very dramatic in terms of consumer behaviour consumption, and in terms of the inadequate tools they have in place for forecasting, monetizing … so if you try to prioritise or focus on where the biggest opportunity lies, it just felt like this is the first. It makes sense to do that.
This has multiple aspects to do it but it goes back to our “people-based marketing” approach and how we feel that is the way forward for marketers in general. And it goes into why we feel native advertising is so powerful and under-leveraged today in the ecosystem.
All these trends and solutions lend themselves much better to mobile. That’s not to say that one day we will not go into desktop, but this is definitely a start.
BI: Can you talk a little more on the native advertising front? Facebook recently filed a fascinating patent in this area which suggested it is working on not just an ad exchange, but a content exchange that could position it against content recommendation platforms like Outbrain and Taboola, but with the extra power of Facebook data and your ad-tech. Where do you see your native advertising offering going, and the blend of content and advertising?
YA: They are still very separate for foreseeable the future. First of all, the way organisations are set up in large media companies, it’s very difficult to try to bring them together. I think that when you look at editorial, and who’s running editorial, people are concerned about the clarity consumers get about what is content and advertising.
I think we are still in the baby steps of native. I think we need to be cautious about crossing the line about confusing consumers as to what is advertising and what is not. It’s very easy to mis-use consumers trust, and it’s very difficult to gain back consumer confidence.
We are very passionate about native, having a lot of discussions about native, seeing great success, and getting developers to implement more native. But I really think that they’re really focused now on how best to integrate native in a way that doesn’t hurt the consumer experience, and that’s also about implementing a really clear line between content and advertising.
BI: But that said: Publishers love native. Taboola isn’t a billion-dollar company for nothing, so it seems publishers are comfortable with the blend of content/sponsored content/native. Aren’t publishers asking you for this kind of ad-tech solution?
YA: I think publishers are really excited about the world of consumption and how it’s moving to discovery.
With Facebook you see that really clearly, that content discovery is very strong. And as publishers cannot rely on themselves being the destination, they have to encourage discovery on their own platforms. And this is the key reason why companies like Taboola and Outbrain are getting a lot of traction.
But I don’t necessarily think that people are thinking about them first and foremost in terms of monetisation. In the realm of LiveRail, we want to focus on how we can best help publishers monetise their inventory. We feel like we want to stick to a monetisation discussion, and we want to give them tools to do that. And we don’t hear from them that they’re looking to LiveRail to solve those other problems.
BI: What has the reaction been like from the market to your F8 announcements? The immediate comparison many commentators made with the LiveRail update was with Google’s DoubleClick. That platform has huge scale. Have any publishers said to you that ‘I’m just too committed to DoubleClick, I’m bound by its scale, and walled garden, I can only commit a little to you?'”
YA: I think that publishers are judging ad-tech by a magnitude of variables. I think if you look overall, there has been some level of disappointment, or let’s say a gap, between the premise ad-tech offered and what is actually delivered.
I think the reality of 10 years ago is not the reality of today, however. Ten years ago, every new shiny object in ad-tech, publishers wanted to adopt. Today there is much more scrutiny.
When we talk to publishers, they first of all want to understand if we are solving a real acute problem they have. [They ask] “How are you going to do it in a different way? Really convince me that this is something that will demonstrate business results for me.”
We haven’t heard them saying: “You know what, this is going to be an amazing change, like a seismic shift in my business — but guess what: I have this system where the other prevents me from doing that.”
I think the excitement around LiveRail is our mission, how we look at problem, and even our selection of what to solve first. We have a really practical discussion about how to make it easy for [publishers] to implement. There’s always challenges — sometimes to do with existing systems, or priorities of the business, or to do with cost — but you cannot just focus on one and say this is the reason not to do it. Overall, the feedback has been positive.
BI: There has been a lot of chatter recently about Facebook attempting to woo publishers, in particular encouraging them to publish their content to Facebook direct, in return for ad revenue share. Many people made the link between your LiveRail announcement and your recent publisher partnership change. Is it fair to say those two things are intertwined?
YA: The reason I cannot answer that question is because I just don’t know. It’s just so separate: We are just completely focused on monetisation tools for publishers, empowering publishers to monetise their own platforms.
Even though a large portion of our product is about publisher [partnerships] … it is technology driven. We don’t feel we are necessarily always participating in actively monetizing publishers inventory, it’s actually just about empowering them with great ad products.
BI: LiveRail’s core focus has always been video. Yet advertisers and agencies are still crying out for more quality video inventory — there just isn’t enough of it on the internet to meet their demand. Is it up to you to solve that problem?
YA: I think we definitely play a part with our technology perform in helping buyers establish what is relevant, and what inventory will actually drive business objectives.
But LiveRail is very focused on providing the technology tool: We are not helping publishers with content, or delivering content. So there are some aspects of the game where we cannot contribute, but we can help them do a lot.
BI: But if you were giving advice on the best way to present video and video inventory, would you encourage autoplay, like Facebook offers, and what YouTube is starting to do now with its post-roll videos?
YA: One of the most humbling experiences in joining Facebook is understanding how much Facebook is focused on driving business objectives. And the number one piece of advice for publishers is that you will only be able to do that if consumers are truly engaging with your advertising. If you always bear the consumer interest in mind, then the business objective for the marketer, you will find the right balance.
Sometimes it’s autoplay, sometimes it’s click-to-play. Naturally, a lot of advertising is about the value exchange: What value I bring to the consumer, and how much they are willing to consume advertising in return. So there’s not just one response to that question.
Sometimes these things are like mid-term solutions where publishers feel like they are under pressure for revenues, and [they don’t always choose to do the] right thing. Then marketers are usually a bit slower to understand what is really meeting objectives.
What we are trying to do is, from day one, think forward and say: “OK, marketers in 5-years time will be measuring in digital their business objectives. They will not just be there just because consumers are there.”
So you can run this autoplay strategy to increase views and revenues look great in a year, but some point marketers will come back and ask questions. If you don’t adhere to these two concerns of consumers and marketers, there will always be challenges.
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