When Kirk McDonald was president of digital at Time Inc, he was a frequent critic of how the wave of innovation in advertising technology mostly benefited advertisers. Why was it, he would say, that his advertisers frequently knew more about his audience than he did? It would stand to reason then that McDonald chose to join publisher yield optimizer the PubMatic as its president, nine months after leaving Time. McDonald, a former executive at aQuantive, spoke with Digiday about what he learned being “the digital guy” in a big traditional publishing company, how publishers can reassert control and the downside of Google amassing too much power.
The worlds of technology and premium content publishers are colliding. There aren’t too many people giving holistic answers. Everyone is answering a piece of the puzzle. I’ve been publicly saying everyone is offering point solutions. It’s not the publishers business to understand the nuances of one point solution over the other. I still think there’s a bright future of automation for a variety of people in the media space. The companies offering automation solutions need to be platforms: agnostic and offering a complete suite of solutions.
What was your main takeaway as “the digital guy” in a huge traditional publishing business?
I loved what I was doing at Time Inc. We had tremendous support in understanding the business needs to evolve. The outsider’s perception is: if you see where you need to go, why can’t you get there? When you’re captain of 10,000 person organization with many businesses in different areas it’s difficult. The movement of being more sophisticated has to be more thoughtful. From the outside it can look slow but the organization was doing well. I wouldn’t express a huge amount of frustration with Time Inc. My decision to leave had to do more with wanting to move at a different pace. There had been enough changes in the CEO suite that it was a good time to jump back in [to advertising technology]. I’m a believer that automation has to be part of the premium publisher strategy.
One of the frustrations you voiced at Time was as a publisher you felt outgunned. Is that still the case now?
I still think there are more DSPs than SSPs. You don’t need 25 platforms, but there are still a broader suite of dashboards and control levers offered to the buyers than those who sell inventory. On the sales side, the ad networks whether they like it or not need to rely on the naivite of their publisher partners to gain access to inventory those publishers haven’t figured out how to monetize. That’s changing. As publishers have gotten smarter with using automation tools, they’ve realized that’s a critical part of the future of their business. A lot have built out secondary premium inventory strategies. They’ve relied on platforms to get that done. That’s the start of understanding all the things that need to be automated.
You probably had the experience at Time of thinking this exchange stuff gets 80 percent of the attention but is, at best, 20 percent of my revenue. Direct sales is still the way I make money. Is that going to change?
All revenue is important when you’re growing your business. How much is sold direct vs indirect — what’s important is the margin on anything they sell. If they can continue to grow smart programs with the proper margin, that’s great. But as the dollars shift, they have to pay attention. If the buyers are asking for inventory to be avail at a price point or in certain places, premium publishers have to be able to do that. They need to take more strategic approach to indirect sales. They did a tactical solution. More premium publishers are becoming sophisticated in understanding how they can be active sellers of all their inventory.
We’ve seen some moves recently with MediaOcean and maybe with a Yahoo alliance to both take some complexity out of the ecosystem and establish a counterweight to Google. Are both equally important?
None of us like one choice. It doesn’t feel American. All of us like choice. I don’t think Google is behaving in a way that doesn’t make them a friend of the people who use the service. I think they’re very thoughtful in their approach. There is an approach that’s about things working together in a particular way. They’ve become part of the closed solution. For the publishers wanting to become active in inventory and data management, we want to make sure we’re there as an alternative.