John Battelle, founder/CEO of Federated Media, saw the rise of programmatic coming from a mile away. Back in 2010, he realized that the number of people directly involved in selling largely undifferentiated display media was going to decline dramatically. At the same time, data about publishers’ inventory was increasingly in the hands of the buyers, but not the sales force. In fact, that data was more likely than not owned by middlemen, leaving the publisher with no control.
Given this situation, Battelle reasoned, publishers needed an automated platform to give them back control of their data.
It turns out, that’s exactly what happened, in particular with smaller publishers.
Federated Media realized that it was going to be much harder to sell inventory to a buyer based on traditional publishing sales tactics. “It was clear to me that the only way that you could truly differentiate advertising inventory was if you had the data to prove it was actually uniquely differentiated,” explains Battelle.
With the rise of DSPs in 2010, Federated Media decided to acquire its own supply-side platform and exchange, Lijit Networks. “It mitigated the downside risks of the business we were in, which was selling direct-sold media that was increasingly being valued by data we did not have control over,” explains Battelle. “I knew those trends were coming, and Lijit Networks was the obvious candidate for us. It was also a match in terms of the kinds of publishers that they were working with because they were, and still are, mainly small sites with less than 100,000 page views a month. So we’re talking about the long tail. It was a sort of a programmatic version of the independent Web.”
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