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Gary Goodman is the CEO and co-founder of MediaEquals, an online platform set up initially for trading offline media with plans for an online display channel by early 2010. Backers include Richard Eyre, the chairman of the IAB, John Farrell, the former president and CEO of Publicis Groupe SAMS Worldwide and Andrew Walmsley, the co-founder of i-level.
We interviewed Gary about the platforms’s ambitious plans and how his experience in offline and online marketing have informed the company’s approach.
He also explains why the marketplace is not a threat to existing online advertising exchanges.
Why hasn't anyone previously been successful in setting up an online trading platform to replace antiquated methods of buying and selling traditional media?
Companies have dabbled in this space before developing media exchanges for traditional media sectors. The problem with exchanges is that this suggests there is a level playing field where buyers can compete on equal terms for media. The consequence has been that media owners have only used these services to sell distressed and narrow interest inventory, and agencies have not supported them.
Additionally, a simple “auction style” exchange is not acceptable to buyers or sellers, because the commoditisation it would cause has been seen as a threat to the agencies, rather than a supportive facilitator.
Our strategy is different. We are not trying to change the way business is done. Our technology enhances existing relationships through smarter communication and our focus is the bread and butter of what is bought and sold rather than bits and pieces. To do this we are centralising all media in one place, across platforms. Our trading platform enables everyone to focus less time on haggling and administrating and more time delivering better media solutions.
What impact do you expect MediaEquals to have on the display online advertising space? Will ad networks and exchanges view you as a competitor?
My feeling is that direct response advertisers are well serviced by the existing networks and exchanges. They effectively bring together a long tail of buyers and sellers to reach an online audience.
There will no doubt be quite a bit of consolidation in the market. The winners will be those networks and exchanges that can best optimise campaign performance from the real-time data they hold.
What we do is actually very different from how the ad networks and exchanges operate. We are all about improving the process of how media is bought and sold rather than creating a secondary market. Our focus is smarter negotiation tools rather than automation of the buy. We are all media rather than just online. We also can service online branded campaigns alongside other media channels, rather than just direct response.
What are Google’s current plans in this space?
Of course I’m not sure of Google’s future plans but they have tried this space before. They recently decided to close their press and radio exchange in the US and have just launched their own new ad exchange for online display media, following its acquisition of DoubleClick a couple of years ago.
There are actually numerous companies in this area of online media exchanges. All tend to focus on servicing a long tail of online publishers and buyers. Some of the other companies in that space include Right Media (owned by Yahoo!), AdBrite, AdECN, Adjug and ADSDAQ.
Our differentiator is that we can provide markets for everything our publishers have to sell, across all media platforms.
How has your experience of both "traditional", offline marketing and the online marketplace shaped the development of MediaEquals?
I started working as junior media planner buyer for Universal some 18 years ago. This was at a time before the internet and Microsoft Excel had just been introduced into the agency to manage media plans, replacing the graph paper and pencil. Our buying team of six shared one computer between us. I spent six hours a day on the phone, checking availability, optioning space and haggling to get the best rates. I spent the other two hours a day uploading what had been agreed on DDS DOS interface and resolving disputes on what had been agreed.
The next 14 years were spent client-side. Over this time the media landscape had radically changed. As a client I was demanding more compelling, data-driven media solutions. When I came back to the media world it was as an online publisher five years ago. Despite the fact that now there was a PC on everyone’s desk, I was amazed to see how everyone was still buying, selling and administrating media for clients in exactly the same way as before.
Where are you at with getting the key buyers and sellers using the platform, and how long will it take to reach a critical mass which will make it impossible for serious players not to use MediaEquals?
Our vision is to represent the world's most important media owners and principal agency groups, so our focus is only the serious players for now. The top six media agency groups account for just over 50% of all media bought. The top 30 global media owners account for approximately 57% of total media. Within these, the top 10 media owners account for over 35% of all media sold.
For a $400bn market there are actually a handful of companies that have real influence to enable a trading platform like MediaEquals to reach critical mass. I am not saying it is easy and as with every new business the key is focus on doing something well and building from that base.
Initially this has been on national and consumer press for the UK, to be followed by premium online early next year. Publishers currently using our system include Bauer Media Group, Guardian Media Group, IPC Media, BBC Magazines and Metro Newspapers. For each media brand we have loaded everything they sell on the platform and agencies are now rolling out clients and campaigns to use the platform to trade.
Our goal is now to have all major press publishers and media buyers trading on MediaEquals over the next six months.
I think both publishers and media agencies are realising that change is not just desirable, it is essential. Our trading platform has been developed with the help and direct involvement of media owners and agencies. This “ground-up” approach has been an essential requirement to ensure we deliver a service our customers find useful.
Can you tell us about the community-type features you are building which will help buyers and sellers to communicate and network effectively?
Much like Bloomberg has done, we are creating a community of buyers and sellers to enhance their relationships through an online community. For now this enables you to send private messages to each other alongside a briefing or negotiation, upload personal and company profiles. The aim here is to enhance relationships that have previously been restricted to just offline ways to keep in touch.
You can also set up sales teams and buyer teams and buyer groups that can trade in private trading rooms. We are also building an online chat functionality that will be fully audited to link to support these ongoing trading conversations. Publishers can also able to broadcast special deals in real time to specific buyers across the network. More narrowcast than broadcast then.
Your plan is for buyers and sellers to trade other types of media in the future. Why have you started with print and what is the next stage of the plan for incorporating other types of advertising such as outdoor, TV and online advertising?
Our goal is to be the home of all media. Our technology has been developed to hold and classify everything the market wants to buy and sell across all media categories and all audience segments. For our launch, national press and consumer press were a natural starting point as these are the core areas under most pressure.
Our premium online media channel will be available early next year. This will enable publishers and buyers to package up and agree cross media deals and focus on premium online display inventory or specific audience buys. Out of home and broadcast (radio and TV) will follow later on next year.
If offline and online display ads are being bought and sold by the same people at the same time, what impact do you think that could ultimately have on the perceived value of different types of media and the way that cross-media campaigns are integrated?
The majority of ad spend still remains in traditional media including press, television, radio, cinema and outdoor, although the online advertising market is growing and is projected to reach 12.1% globally in 2009. We believe a marketplace for all media is the future. A platform where people can buy offline, online, broadcasting and outdoor through integrated media campaigns will be key as we move into the next era of media trading.
Many of these traditional media channels will be digitalised over the next few years. We are already seeing it. Kindle is emerging and outdoor digital screens and interactive TV both already enable ads to be served in much the same way as online. So whilst the buying currency is still pages and spots in some media formats it is likely that audience will be the main currency for everyone moving forward. We are a media-neutral network and our tools can service all buying currencies as they evolve across our network.
The key differentiator will be those publishers and agency groups who can harness a competitive advantage of delivering cross-media campaigns, and optimise these for the clients most effectively.
To support this the industry need a central place to trade - a media neutral or even “equal” platform - where these cross media deals can be negotiated, agreed and administered.