Elyse Southwell interviews Michael Rubenstein, President of AppNexus. Watch the video above or read the transcript below:
Elyse Southwell: Live at the Nasdaq MarketSite, I'm Elyse Southwell and this is Nasdaq disruptors. Today, we're talking about digital advertising exchanges. About a decade ago when a brand marketer wanted to take an ad out in a magazine or a newspaper, what they would do is they would call the buyer or the seller or vice versa, but today when an advertising transaction wants to take place, they take place in a digital market place, one that is run at scale by a lean team and of course is transparent, and as consumers we don't really understand the mechanics behind the ad ecosystem that powers certain websites, and today we're here with one of the world's largest digital ad marketplaces AppNexus. Michael Rubenstein, President of AppNexus is here to talk to us about programmatic advertising and the future of advertising. Welcome Michael.
Michael Rubenstein: Thanks for having me.
Elyse Southwell: What is AppNexus?
Michael Rubenstein: So, AppNexus is the world's premier marketplace and enterprise software company for digital advertising. We operate one of the biggest marketplaces on the web for digital advertising as you mentioned. We're not as well-known as someone like Facebook or Google to consumers because we don't have a consumer brand, but to the big buyers and sellers of advertising, the media companies, the agencies, the brands they know us and they trust us with their digital ad dollars.
Elyse Southwell: For our viewers watching can you explain programmatic advertising?
Michael Rubenstein: So programmatic advertising to me is a bit of Hodge podge and really, it's about the application of contemporary technology, automation, machine learning to the art of buying advertising. I think one of the earliest technologies in that space as you mentioned was the advent of the advertising exchange which I founded Double Click Advertising Exchange and Brian O'Kelley co-founder of App Nexus founded a company called Right Media, an early advertising exchange as well. So, we know that world really well.
But what happened over the last decade or so was really interesting. What's become known as programmatic advertising is really gone from something on the fringe to the mainstream of ad buying, so my prediction in the coming years is that the programmatic will fall away and this really will just become known as advertising. It's really going to be and kind of is today becoming the mainstream way that people buy and sell advertising.
Elyse Southwell: So you co-founded Double Click, you are?
Michael Rubenstein: I founded Double Click Advertising Exchange.
Elyse Southwell: Okay, you founded Double Click Advertising Exchange. Can you tell us about how AppNexus got started?
Michael Rubenstein: So AppNexus was started in 2007 by our co-founders Mike Nolet and Brian O'Kelley, I joined two years later. The vision for the company then is the same as it is today. We believe that advertising is one of the critical elements of the internet. It's foundational to the internet. I mean look at Nasdaq, two of your most highly valued companies Facebook and Google advertising supported, and so we think that advertising plays a huge role in the internet, we say advertising is the life blood of the internet and we believe that the way advertisings bought and sold and advertising technology has a huge impact on the way this market plays out.
And so our view for, our vision for the company is to be right up in Nexus, the center point of buyers and sellers helping to connect them in transparent high quality and really innovative ways, and helping them to build real sustainable and valuable businesses online, whether you're trying to build a company or build a brand through advertising we're there in the middle to help support that.
Elyse Southwell: Everyone has been talking about the duopoly between Facebook and Google and that they've won the ad tech power game, what are your thoughts on that?
Michael Rubenstein: Well, I think it's too soon to say. Obviously Google, Facebook have had enormous success over the last several years and aren't slowing down. But at the same time we're in an incredibly dynamic sector, probably the most dynamic sector on earth. Probably 10 years ago one might have thought maybe AOL and Yahoo would have this thing wrapped up, and today they're valued probably around 10 billion collectively while Google and Facebook together are worth over a trillion dollars.
So, I think it's an incredibly dynamic market that is going to change a lot in the years ahead. Voice activated devices, internet of things, consumer streaming content that they were previously viewing over televisions to mobile devices and connected televisions, all of those present opportunities for advertising, dynamic digital advertising, and they're really going to change the way that we think about what is internet connected advertising.
We see that entire world as our opportunity and think that we can play a foundational role in creating really high quality advertising marketplaces to support what will no doubt be an explosion of media.
Elyse Southwell: So if you pick up any trade, people are talking about publishers trying to do away with ads whether it's subscription models or pay per piece of content model, do you think that that's going to work?
Michael Rubenstein: Well, I don't think it's either or. There's a long well-established history of companies building great businesses on the basis of dual revenue streams. I mean look at the newspaper business, many revenue streams coming in its day. I think that there won't be an either or. I mean Netflix is obviously built a great business, not ad supported, but, then you look at new services coming online direct to consumer sport services, direct to consumer services like Hulu that are ad supported.
So, I don't think everything will be ad supported, but I think there will always be a market for that. Consumers really appreciate the value trade when it's done right. If the advertising is not annoying and not intrusive, and if the publishers are able to continue to invest in developing great content and the brands are getting value, it creates of what we think of the virtuous cycle, everybody is winning, and we think that that will be a big part of the media landscape in the future as well.
Elyse Southwell: I love that, everybody winning. Why is everybody talking about transparency?
Michael Rubenstein: Because it's a huge problem in the internet and probably in the world right now, and the way that advertising has evolved on the internet is most of it or a huge portion of it is running through these very large companies who aren't offering a lot of transparency. We're offering a very different view of the world for buyers and sellers of advertising. We're offering a value proposition of total transparency, radical transparency of low fees and low cost and of high quality.
And we think that that really is what is more and more I think being asked for by, for everyone and it's a problem that we're really intent on addressing.
Elyse Southwell: How does blockchain bring transparency to the digital supply chain?
Michael Rubenstein: Well, blockchain is really a method of decentralizing what today is a very centralized process, and I think that it aligns very very well with our value proposition in what we offer. We announced a week or two ago that we're testing blockchain technology with major brands like AT&T and third party vendors who are specializing in the development of blockchain for the advertising ecosystem, and we think again that this creates a win-win.
If advertisers are able to have more visibility into where their ads are appearing, and if they're able to ensure and track to see that the ad dollars that they're spending are ending up as working media, meaning it's ending up in the pockets of creators and publishers that can then go to fund that virtuous cycle, it's good for the marketplace, and right now that's not really happening. Publishers are struggling, it's not a good distribution of the spoils, and we think that that can be fixed.
Elyse Southwell: What are advertisers seeing around brand safety or feeling around brand safety?
Michael Rubenstein: Well, there has been a lot in the news obviously about brands not being happy about where their ads have been found on the internet, and we go back to the transparency point that we made before, transparency and quality. Transparency and quality have not been hallmarks of advertising on the internet to date the way it's evolved and the companies that have mainly profited from it, but we do believe that there is a way for that to happen, and that's why we are adopting a policy such as auditing of the quality of the content that appears in our marketplace and investing a tremendous amount of time and energy behind that.
The verification technologies like blockchain to ensure that people are getting what they pay for, and technologies to make sure people for example can see that their ads are being viewed by human beings. You'd think that at this point in the internet that's how all of the advertising buying would happen and it isn't. And so again, we really are fundamentally driven by this idea that advertising in the internet could work better than it does today and that's what fuels us.
Elyse Southwell: So, you touched on a few hot topics that have been in the news and one of those most certainly are fake news and of course digital ad frauds, so what are your thoughts on that?
Michael Rubenstein: It goes back to the transparency point. If brands had more visibility into where they were placing their ads, we don't think that they would have that problem. And so we've made proprietary investment in our platform and working with third parties in the advertising world to assure brands of the quality of the placements. We think that ultimately the dollars belong in the pockets of quality publishers, news media companies, but that's how we support a vibrant internet with high quality journalism and great content, and it's not just AppNexus that feels that way, the brands do as well.
You mentioned to me earlier the Keynote address that Keith Weed gave at the IAB annual forum this year, that really resonated well in the advertising marketplace. The brands also who are underwriting the content on the internet don't want to fund divisive content.
Elyse Southwell: That's right and that was one of the things that he spoke about in that speech. So, I mean you're obviously investing in your own technology, but you also are really bettering the industry as an industry leader, that's correct, right?
Michael Rubenstein: I believe so, yeah.
Elyse Southwell: All right.
Michael Rubenstein: We're making massive RND investments into our technology and our platform, and we really have what we think of as an empowerment philosophy, meaning the investments we're making are in service of helping other companies build stronger businesses through advertising online. So, our investments really benefit our customers.
Elyse Southwell: What do you, the president of AppNexus, predict for the ad business within the next 5 to 10 years?
Michael Rubenstein: I'm predicting a tremendous amount of growth and continued dynamism in this market. I mentioned some of the things before, video becoming addressable for digital advertising, truly addressable in the next several years, the explosion of devices and new services that are catering to consumer wants and needs. I'm expecting advertising to really just become something that's more ubiquitous than it is today and something that is really really addressable for companies like AppNexus.
Elyse Southwell: Nasdaq themes are ambition and entrepreneurialism; do you have any advice for entrepreneurs out there?
Michael Rubenstein: Well, I think that ambition and entrepreneurialism are great. But one thing we spent a lot of time on at AppNexus since the earliest days are really thinking about and baking into our actions, a sense of purpose and mission and values, and I think that those are an important third leg of that stool to build a great and long standing company. We really have thought a lot about things like the empowerment philosophy that I mentioned before, how advertising can contribute to creating a better internet which really given how central the internet is to the world today can really have an impact on the world.
If journalism is able to find a more sustainable business model of which advertising could be one key part of it, then we feel like we've had a positive impact, and I think that that sense of purpose and mission and values is something that really animates us and has really helped us to succeed.
Elyse Southwell: So great. Michael thank you so much for being here and thank you all for watching, I'm Elyse Southwell and this is Nasdaq Disruptors, have a great day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
