Trading Negotiation Tools

The last five years have seen some interesting happenings in the advertising technology market. New ways of automating the sales process began to form direct connections between buyers and sellers and both sides realized these connections enabled them to react more quickly to changing market conditions and make more beneficial decisions than they could before. In short, both sides capture more value. There is a distinction that bears mentioning about the new ways of automation, there are two distinct types of technology, those that make people more effective and those that replaced people. Once decision making processes can be modeled and replicated by an algorithm, a machine can perform the task. In today's guaranteed/reserved advertising environments, people determine what to buy and how much to pay. Technologies such as RTB exchanges and private market places are purely execution facilities. In other words, the technology is told what to buy and the maximum price.

So what is missing? Tools that turn media buyers and salespeople into bionic super-teams, trading negotiation tools. When looking at media, it is clear that media is very different than the stuff being traded on Wall street. This difference is underpinned by what we call the owner-performance paradigm. As an asset, media's performance is nearly completely determined by the buyer. Other assets are nearly always the opposite. The performance of a stock is not impacted by who owns it.  On the other hand, media is a blank canvass, the ROI is  entirely driven by buying from the right publisher, targeting the right audience, and delivering the right creative. Screw up any of those in a big way and the ROI is zero.

So, what are trading negotiation tools? Let's start with the definition of a negotiation "to discuss something formally in order to make an agreement". RTB, private marketplace auctions, and programmatic direct solutions are not negotiations. Any environment where one side sets a price and the other can only accept or reject, without a counteroffer, is not a negotiation. What most fail to understand about the current landscape of adtech is that there does not exist any technology that empowers the negotiators. This is the fundamental reason for sales teams push back against the implementation of such technology.

To unleash the full power of markets, buyers need to have the ability to evaluate alternatives and make substitution decisions.  In private marketplaces this is an impossibility.  What makes people so important in the process of buying guaranteed/reserved media is their understanding of substitutability. The fundamental nature of real time bidding is single threaded. The single threaded architecture means that every impression is either bid on or not. Instead, a better approach is to understand the broad nature of what is available and make "or" decisions instead of "yes/no" decisions. None of the current transaction automation platforms - DSPs, SSPs, ad exchanges, private markets, trading desks, etc. support the negotiation process, they simply remove negotiation.

Turning the sales force in to a bionic super-team is very different from turning them into unemployed people. Our technology builds bionic super-teams.