Chris Kane, Jounce Media, teaches us about How to win in OpenRTB as a DOOH publisher

Intro Music:
Welcome everybody to the OOH Insider Show, a podcast like no other, hosted by the one and only Tim Rowe. Get ready to have some knowledge dropped on you and to be entertained because nothing's more valuable than food for your brain. So sit back, relax, we're about to dive in as the best industry podcast is about to begin.

Tim Rowe: Welcome back to another episode of OOH Insider. In case you missed it, look back, check last week's episode. It was all about content adjacency. How can we solve for the content challenge of DOOH in the CTV conversation? Looking ahead to next week, we're going to do a full deep dive on news and topics that are adjacent to DOOH. Get you set up for 2025. But today's conversation is with Chris Kane, Jounce Media. And we're going to be talking all about. SPO, Supply Path Optimization, OpenRTB, the digital .home networks that are winning disproportionately to others. Why? Why is that the case? Chris Kane, thanks so much for being here.

Chris Kane: Great to be here.

Tim Rowe: Thanks for inviting me. Absolutely. So maybe we just start high level. What is, what is SPO? Why does it matter?

Chris Kane: Sure. SPO is my, my simplified version of supply path optimization is that it is a whole host of techniques and initiatives that buyers are implementing. to make really deliberate choices about which RTB auctions they submit bids to and which RTB auctions they choose to sit on the sidelines. And there's a whole bunch of motivating factors behind it. But the big picture is you can create better return on your marketing investment if you are making very thoughtful choices about which auctions you want to participate in.

Tim Rowe: Make sense. Thank you for the explanation and setting the table for us. One of the big challenges I think with DOOH and your research highlights it is the ambiguity of DOOH. It's not quite classic OOH. It's also not quite CTV, which is largely it's, it's, it's a big screen TV. It's a, it's a large format connected TV. adjacent to professionally produced content. Why is that such a challenge for DOOH?

Chris Kane: Well, I think there's, I will get there very quickly. But this is a much broader thing that exists across the whole supply landscape. There's such fragmentation of our TB traded supply, that it's just really, really hard for buyers to wrap their arms around, kind of like a human level understanding of what they're buying. Which, by the way, is not the case in all digital media. I think people have a pretty good handle on what the Instagram experience is. It's just so gigantic. You can spend your time as a media buyer to get some basic familiarity. What is that ad product? You just can't do that on the open internet. You just can't do that with the whole breadth of web supply, mobile app supply, CTV supply. And it's also really hard to communicate these subtle but important differences through RTB auctions. There's just a lot of nuance that is very hard to stuff into some, you know, JSON blob that gets sent from a SSP to a DSP. And so anyway, to then get to your question, among many other categories of supply, there is this large and growing pool of inventory. that is not classically CTV supply and is also not classically DOOH supply. Marketers are spending a material amount of money on that today. They are spending more and more over time. And it's just not clear at all to me, or I think to the whole ad tech world, What is the right way for the buyer and for the seller to treat request auctions for an .home connected TV screen? What do you do with that? What budgets should be eligible for those auctions and what budgets should not be eligible for those auctions?

Tim Rowe: Those are hard decisions and I'm sure every, every organization's approaching it differently, which as an industry kind of makes it hard to solve for. But I thought your research, it pointed out something that I don't know that a lot of DOOH folks know. Where's the majority of the open RTB DOOH demand. Where's it actually coming from?

Chris Kane: Well, so, okay. Man, there's like a bunch of ways that you come at this. Uh, if you're trying to size the demand. You could think of this by sort of like buying platform. Maybe that's the easiest way to start. Um, and so in that framing, basically all the money, 75% of the money lives in Google, the trade desk and Amazon. Like that's, that's 75% of DSP money lives behind those platforms. There's lots of other platforms beyond that. Some are managing more than a billion dollars a year, but we're talking about such a giant market that like basically there's three bidding platforms that really move the market. And then within each of those bidding systems, Google Ads, DB 360, Trade Desk, Amazon DSP, within each of them, then you get tens of thousands, hundreds of thousands, millions of advertisers who are configuring campaigns in lots of different ways to buy different cross sections of supply. And so you'd have like a web retargeting campaign or a mobile app install campaign or a CTV awareness campaign. And somewhere in there, you can also buy digital .home supply. Sometimes you can buy digital .home supply because you configured a campaign to buy digital .home supply. There are also situations in which you set up a campaign to target connected TV supply and you buy .home screens. And there's like a pretty reasonable and active debate at the moment of like, is that last thing that I said a problem or is that a feature? What do you think? I think it's a really, I think it's a very reasonable debate. Um, I spent some time thinking about this. A lot of people spend time thinking about this. I think reasonable people come down on different sides of that debate.

Tim Rowe: How, not that we're going to answer it in this conversation, but how do you start to think about solving for. such a disparate conversation, two very different sides of the equation. How do you, any advice for us as an industry?

Chris Kane: The impractical but easy answer is buyer choice. If we're talking about a connected TV screen in a bar or in an airport or in a dentist's office, there's a very reasonable but I think totally impractical argument that says give buyers choice. Let buyers make that decision. And it's like the last thing a DSP buyer needs is more decisions to make. Sure. You know, like, that's just, yeah, sure, there will be some like, super sophisticated, a handful of super sophisticated media buying teams, who decide that it's worth their while to like, build a deep understanding of these large pools of OOH screens. But that's not the market. You know, the market is tens of thousands to millions of less sophisticated buyers who think of this as the DSP's job. This is what I'm paying my DSP to do. They got to abstract away all of these nuanced, esoteric decisions and just do the right thing. And so DSP has got to make the judgment call. There's a product person at Trade Desk. There's a product person at Google Ads. There's a product person at Amazon DSP who's making the call. What's the default? How are we going to handle inbound auctions for a connected TV screen owned by a company that deploys these connected TV screens in OOH places. Some, some guy, some woman made it just like a judgment call. And they probably didn't make the same judgment call at those different major DSPs. But the default behavior of the DSP is, is what matters.

Tim Rowe: Really interesting. The networks that are winning disproportionately to the industry, what are they doing differently?

Chris Kane: Well, so there, okay. So we wrote, uh, very brief context. We were in the research business. We write a bunch of research and we sell it as a subscription. Every month we publish a research report. There was a report we published earlier this year that tried to like really wrestle with the issues you and I are talking about. And in that report, um, the main thing that we highlighted is this ambiguity of like, you know, should a connected TV campaign by an OOH screen is not relevant. for very large portions of digital .home supply. And so just like to speak in specifics, like this is not a consideration that is relevant for clear channel outdoor. This is not a consideration that's relevant for gas station TV and many, many others. And the reason those two companies and dozens of others that are like, and the reason this is not relevant is they only sell their inventory as far as I can tell, through see these sort of like digital .home specialized SSPs, Vistar, Place Exchange, BroadSign, Hivestack. And because of that, DSPs just treat all that supply as OOH. And you wouldn't sort of like, it wouldn't be like logistically possible to co-mingle that supply with the CTV campaign because it's coming through unique sets of SSP pipes that the DSP kind of knows or is instructed to treat as DOOH.

Tim Rowe: Like pre-filtered.

Chris Kane: Right. Like when most DSPs built their integration with Place Exchange, Like the product manager at the DSP who was like pushing the buttons to set the defaults. Like, Oh, we just like, we'll call that like this pipe only feeds us DOOH supply. So like, just make it available to DOOH campaigns. And like, I think that's appropriate and reasonable. The thing that is nuanced that you were driving at is there are other screen owners. Who work with the, you know, the classic SS DOOH SSPs and also work with the omni-channel SSPs. They'll also run auctions through Magnite or Zander or a bunch of others. And that's where this become, that's where this ambiguity exists. Cause I've got these inbound requests coming from, you know, an omni channel SSP for a large format screen. It's declaring information, thinking about like your podcast last week about the content that's on screen, because there is content that's on screen, you know, and it's like, it's just described to the DSP in a way that. looks exactly like CTV supply and arguably is CTV supply. And then there are some DSPs who've said like, okay, when the inbound request that looks like this comes from Pluto TV, call it CTV. When the inbound request comes from some other company that we think is a screen that we've made a judgment call is not the same as CTV route it to the DOOH campaigns. But anyway, that's where this, this, this ambiguity exists. And to then finally get to your question. The companies that only work with DOOH SSPs are kind of irrelevant for this conversation. And also as a little bit of a by the way, issue a very small number of bid requests to DSPs. But there are other .home screen owners who will partner with all the incumbent SSPs for digital .home and all the omni-channel SSPs. And, and this gets like pretty deep into ad tech details, we'll also work with a bunch of ad networks who then resell through the classic SSPs. And so for one available ad opportunity on an .home screen, a DSP might receive two or three bid requests from let's say ClearChannel, but 40 bid requests from another screen owner. And so. The availability of supply gets totally swamped by a handful of companies that are issuing lots of duplicate auctions. I don't view that as a bad thing at all. This is very much the normal way of operating in the web, mobile app, and CTV categories. It's not the normal way of operating, though, in the digital .home space. And so it's a relatively small number of companies, four or five companies represent just like the giant majority of OOH supply that's available to DSPs.

Tim Rowe: Wrapped up in that bid duplication. How, how does that, how is that a part of the equation? Is that what's happening?

Chris Kane: It's an availability bias and we call it. Okay. Yeah. There's this thing that we've been studying for a long time that we call volume bias, essentially availability bias. If you had just like play like a ridiculous example with me, early days of header bidding on the web is when this started to become relevant. If you had a web publisher who did not have header bidding, they would make simplifying some details. Each time they had an ad available, they would send one bid request, one auction to a DSP. If you had another publisher that got like real, they moved real fast and adopted header bidding through all of the sophisticated ways. When one ad was available on that website, a DSP might receive 10 bid requests from 10 different SSPs. And so what winds up happening, I use the word swamped before, like that first publisher gets swamped by the second publisher. And just like there are many more bites at the apple that that second publisher can take to just like get back a bid from a DSP. And so it winds up happening is because the bid stream gets kind of distorted when one publisher is creating duplicate auctions and another publisher is not, DSP's participation and therefore spend winds up shifting to the publisher that runs lots of duplicate auctions. This is is relevant a bunch of ways, but basically for the purposes of spend allocation, this is immaterial on the web, in mobile app, even in the CTV space, because everyone does it. This is the norm. I don't know if it's the norm for your audience, who I know is a very .home-oriented audience, but this is business as usual for many, many years on web, mobile app, and CTV. Every web publisher, every mobile app developer, every streaming service now runs tons of duplicate auctions through tons of SSPs. And that's problematic in a handful of ways, but at least everyone is like approximately equally represented in the bid stream. And so you don't get this like weird distortion of DSPs. But in the DOOH space, this whole thing that we're talking about, about auction duplication is not normal. It's not good or bad. It's just not common, you know, and so like, 40 of the top 50 screen owners just like don't do this thing. They don't run tons of duplicate auctions for each impression, but like 8 or 10 of them do. And so you get 8 or 10 screen owners that represent like 90% of the bid stream, not because they're 90% of available supply, just because they're creating tons of auction duplication like CTV companies do and mobile app developers do and web publishers do.

Tim Rowe: If I can reframe it for the OOH audience that's coming into the programmatic conversation, they're just available in more stores. Is that a fair way to sum it up? You can buy them from more places.

Chris Kane: Yeah, the shell, like the shells are stocked with supply from a handful of companies. And like you can get supply from other DOOH screen owners, but it's like on a small shelf in the back of the store.

Tim Rowe: So how, how then maybe there's, there's DOOH publishers listening to this now. How should they be thinking about programmatic? Maybe they haven't plugged in any supply yet, or maybe they are a little further down that roadmap. How should they be thinking about. Which platforms to plug into, I plug into all of them. How should I think about my inventory relative to this conversation?

Chris Kane: It's a hard question. I mean, I think it's really important for me to just sort of overstate that. I don't feel like I really understand the OOH space. I really understand the DSP category, but I don't really think I understand the DOOH space. And I don't have a good handle on how important DSP demand is to DOOH screen owners for further. Um, everything that we're talking about. I think is completely irrelevant for media company screen owners who source DSP demand through one to one private marketplaces. If you're in the business, if you're Programmatic monetization strategy is go bang the doors at the big agencies, sell one-to-one private marketplaces and have that executed through RTB auctions. Everything that I just said is completely irrelevant to your business. Sure. But if you care about discretionary spend, basically open auction demand, now this stuff matters a lot. And you will not get anywhere close to your fair share of discretionary spend, open auction demand. if you are not making your supply highly available. And what that means, unfortunately, is running around the industry and signing literally dozens of partnerships with all of the major SSPs across the digital .home category and the omni-channel category, and probably also signing partnerships with ad networks who will run even more duplicate auctions through reselling SSPs. That has become what's normal in all these other environments, and I think that has a real chance of becoming what's normal in the DOOH space. I don't love that for what it's worth, but that seems to be the direction that, you know, market forces are going to tug screen owners.

Tim Rowe: Just say, I want to maybe double click into that. You said you don't love it. What don't you love about it? And do you have a, obviously the market is the market, but in a perfect world, how should it work?

Chris Kane: Well, there's, there's two things not to love about that setup. There's at least two things not to love about that setup. One is it really crushes the unit economics of DSPs and SSPs. Like for, for media companies working with, you know, whether you work with a single SSP or a dozen SSPs. does not change your operating costs. I mean, maybe it creates a little bit of like operational overhead for you, but like, you don't, it doesn't cost you any money to run an auction through an SSP. Sure. But it costs that SSP money, you know, like they got to pay for all of like the, the, the server activity and the associated energy that goes along with running that auction. And it costs the DSP money to receive that bid request and evaluate whether they should bid. And so you wind up creating lots of operating expense for SSPs and DSPs. That does not unlock any new access to inventory. You're just sort of driving up the operating costs of these ad tech companies. And that just makes it very hard for ad tech companies to have, you know, viable economics. So that's not a thing that screen owners should probably spend much of their time worrying about, but it's something I spent my time thinking about and has some, I think, pretty profound effects or impacts for like the durability of independent ad tech. That's like a big deal in my world. The other one, which is maybe more relevant for your audience, this is not great for the overall economics of screen owners, particularly when you work with ad networks that solicit DSP demand through reselling. Or to say that differently, this, what I'm going to say will not happen, which is a hypothetical. If every publisher in the world, web, mobile apps, CTV, DOOH, held hands and said, we are going to sell our supply through a single SSP. You can choose which SSP you want, but you get to pick one. In that future world, the same amount of money would leave DSPs and more of that money would get paid to publishers. Like the publisher world would collect more money if the supply chain worked like that. The publisher world makes less money when publishers choose to run auctions through high fee SSPs or multi-hop reselling supply chains who take a big ad tech cut. But each individual media company is rewarded for defecting. And so everybody eventually defects. And so I don't, you know, the market's the market. This is where it's pulling us all. But those are probably the two big reasons why I don't like it.

Tim Rowe: I think that those are good reasons to not like it. Unit economics was not something that I'd consider, but stated so simply, I don't know how, how anyone could argue with that. We all want to make more money and the brands want to put more of their money towards obviously operating media spend that's working for them in the market. Um, I don't know that. I don't know that we will solve for that, but I appreciate the perspective and you'd be willing to being willing to share it. A question that I had, you, you mentioned ad networks and that being commonplace on the web. Can you give us an example how that works and how you see it, how it's working for digital .home networks? Can you explain that?

Chris Kane: Sure. Yeah. I mean, so, you know, like a screen owner gets approached by a company who says, we think we can bring you incremental demand. And you're like, well, what are you? And they're like, well, we're not an SSP, but we sell very large campaigns to advertisers. You know, we currently work with the biggest advertisers, and we work with all of your peers, and we'd like to include your supply when we sell these big campaigns to the biggest advertisers. It's like, okay, like, that sounds fine. And to some degree, everything that I said is true. And in some cases, it's entirely true. But so what winds up happening is, you know, a media company, DOOH screen owner, builds this sort of technical integrations, a relatively simplistic thing, essentially traffic an ad tag from this ad network in your ad server. And whether it's for every impression or some subset of available ad spots, you give this ad network the opportunity to buy it from you. And often they do buy it. But the way that they buy it is they receive this request from the screen owner. They then initiate a whole bunch of RTB auctions through SSPs. Those SSPs send bid requests to DSPs and DSPs bid back. Sometimes DSPs bid back because this ad network sold a campaign, private marketplace to a marketer in that DSP. Sometimes those DSPs bid back because they've got a marketer who wants to participate in the open option. The ad network's never heard of this company, but they found a willing buyer and they can create liquidity and facilitate that trade. And I think in both of those situations, this is money that the media owner might not be able to get on its own. And so I think it's a perfectly reasonable choice for the media company. There's two watch outs. One is there's a dilution of ad spend. If a marketer spends a dollar through this sort of supply chain, like the DSP, there's an SSP, there's the ad network who pays the DOOH screen owner. If the marketer pays a dollar, maybe the screen owner gets 50 cents and they potentially could have gotten more than that if they had sold this through a more direct supply chain. That's one consideration. The other is back to the beginning of our conversation. Some of these ad networks are really in the CTV business. And when they sell campaigns to brands and agencies, they have a slide deck that has a whole bunch of living room experiences in the slide deck. And they make either an implicit or sometimes an explicit statement that says you are buying living room supply. That's not to say that DOOH supply is worth less than that. It's just not the same product. And they wind up blending in DOOH supply or these OOH screens. in a way that feels like a bait and switch to the marketer.

Tim Rowe: It feels very, feels very icky to not be having the transparent conversations about what it is. So I think conversations like this are, are essential to it. Chris Kane, what is the question that I haven't asked yet that I should have asked?

Chris Kane: Well, I think, you know, I think you're, you're, uh, you, I thought you were about to ask it. Um, You know, I think that is pretty icky. And if I'm a screen owner, it's sort of like, I guess I'll, I don't know how to ask the question. I'll just answer the question. It's sort of, I think it's sort of like you're damned if you do and damned if you don't, if you're a screen owner, you know, it's like, man, if I get approached by a CTV ad network to sell my OOH screens and I say, yes, I'm now part of this like icky thing.

Tim Rowe: Sure.

Chris Kane: If I say no, I've now just seeded market share to my competitors that I know are working with that company. And it's like, you lose on both sides. And I don't know what the answer is, but I think this is probably an important thing for every digital .home streamer to kind of wrestle with. And, and at least not drift into a non-decision, you know, like make an explicit call, have a management team meeting, grapple with this, make a decision and live with it. But I think a lot of digital .home screenwriters may not even like realize this is like a, an important choice to make. And then they wind up accidentally drifting into the choice of participating in a certain part of the supply chain that they actually aren't comfortable with. or, on the other side, leaving money on the table that they will regret in the future. Great perspective.

Tim Rowe: Thank you for sharing that and adding it. Chris, we're going to be right back with a little bit of news. Before we get there, give folks the Latin long. That's what we use for real world. Give them the Latin long. Where do they learn more about Jounce and maybe get their hands on this research?

Chris Kane: Jouncemedia.com is our website. We provide a handful of free resources that I think your audience might find useful. We do not provide free access to the report we've been talking about. That's part of our paid subscription service, but the free resources are good. Start there.

Tim Rowe: Excellent. And the paid resources are well worth it. Chris, we'll be right back with a little bit of news. Don't go anywhere. Great. Hey, would you like to measure your digital .home campaigns just like everything else that you do? Measure things like web lift, conversion, foot traffic, row ads, all in one place? If so, I'm gonna encourage you to check out Accretiv Outcomes. Because with Accretiv, you'll be able to understand which formats and markets are working the hardest for your ad dollar. And beyond that, you'll be able to retarget the exposed audiences across premium CTV inventory with direct mail, even with email. It's a complete solution for brands and publishers, so check it out at accretivads.com. Now, back to the show. Welcome back. Staying on the topic of video. Two pieces this week out of eMarketer. The first about commerce video driving retail growth. Thought this was interesting. Obviously more advertisers shifting towards video formats that are designed to convert attention. 40% of the open web, I believe is unaddressable. Now it's going to be 70% by 2026. So it's more and more important to be able to determine which tactics are, are carrying water. But 70% of advertisers are choosing the format. 95% are saying it drives more sales yet three quarters of consumers are still annoyed by these ads. Chris, is it good? Is it bad? Or are people just always going to be annoyed by ads and brands just have to do what they have to do to make money?

Chris Kane: Details matter a lot, right? You know, there's there's consumers will always prefer an ad free media experience. And I don't think it's realistic to sort of think that your ads are going to delight consumers. I think that's the thing people like to say at conferences. Ads are interruptive. That's the worker interrupt. That's right. That's just what it is. If this whatever the media type is, if it if it drives sales, you should spend more money on it. If it doesn't drive sales, you shouldn't spend more money on it. As long as you have a basic human level understanding of what the ad experience is and, you know, feel like it, it aligns with like some basic brand standards.

Tim Rowe: Dovetails nicely into, into the retail media piece from you marketer that most advertisers measure retail media success through performance metrics, ROAS, conversion, sales. As DOOH and CTV have their own kind of measurement challenges, Chris, how do you think that we solve for this as the world gets less and less addressable? Does it just become about how many dollars did I spend and here's how much I made? Or is there some, is it DCRs? What, what, what do you think actually solves the challenge of addressability and the demand for outcome-based measurement?

Chris Kane: sincerely worried about this thing in like a very macro sense. There is a growing amount of marketing investment that has some provable return on real world business outcomes and a shrinking share of spend that is tasked with sort of like rather loose goals, like reach and so on, because the CFO is not going to tolerate the stuff that can't get through. Or to say it differently, like when budgets get cut, like they did during COVID, you're going to cut the thing that you have the lowest confidence performs. And if there's one thing the walled gardens have done well, it has built confidence. It is building confidence with marketers that a dollar in creates more than a dollar out. And the open internet has done an absolutely miserable job of this. Um, and so, you know, that's true for many segments of, of non walled garden media, including I would argue DOOH. Although again, I don't know that area as well. Certainly that's true on the web. Certainly that's true for large portions of connected TV. And, um, If we've learned something from Apple's app tracking transparency and the way that Meta responded to it, it's that you can successfully convince marketers that a dollar in is worth more than a dollar out, even when you don't have a deterministic link between the ad and the sale. And we got to figure this out if non-Waldgarten digital media is going to continue to capture budgets and return to growth.

Tim Rowe: Couldn't think of a better place to end it. Chris can't thank you enough. Thank you for being here. Thank you for sharing as much as you have. See everybody next week.

Intro Music: Thanks Chris.