MicroAd CEO Discusses Strategy and The Future of Programmatic in APAC

MicroAd’s recently launched supply side platform, MicroAd COMPASS, aims to provide a groundbreaking solution for APAC publishers . Kentaro Watanabe, MicroAd CEO, reveals that their new SSP will support increasing demands in the growing RTB market and optimize publisher revenue. See his full interview with Digital in Asia below.

DIA: As a top performer in the Japanese market, what do you see as the opportunities and challenges expanding across APAC? And what is your core strategy in approaching new markets?

KW: As compared to Japan where the market of programmatic advertising is relatively more mature, most of other APAC countries are still at the early adoption phrases, which happened in Japan about 3 – 4 years ago. The challenge is that most people are still not familiar with or even not aware of the programmatic advertising and we have to enter into the market by educating the market as the fundamental step. Nonetheless, we also see this as a vital opportunity since the market is not saturated yet with only limited number of players at this point as we are aiming to be the market leader in the region.

Our strategy is localization of product to support the different demand in the new markets. In particular, display ad formats such as Click-to-Expand, Pre-roll and other media rich ads are preferred and more popular in Southeast Asia than in Japan, we provide support for various ad formats to cater for the local preference and need.

What’s your take on the buzzword of “Programmatic”? What do you see are the biggest challenges to programmatic?

The term “Programmatic” has been increasingly widespread because of the fundamental shift, the evolution and rapid growth of programmatic advertising. This is especially true in Japan and we also believe that the market trend will also be as drastic in Southeast Asia region.Forcast graph

At MicroAd, we are trying to utilize data more effectively, but not constraint to only online advertising. As we have achieved significant success and market satisfaction for direct-response advertising where the results can be measured by CPA, we are now expanding to provide optimal solutions for branding, e.g. we has just tied up with a shopping-reward card company in Japan to extend our operations streams (more details).

How big a role do you think private marketplaces will play in the future of programmatic?

Private marketplace (PMP) itself is just digitization of trading form. What is critical here is to foster the advertisement value and media value; also, whether the platform providers (SSP, DSP, DMP) are able to create value for this market.

To build a profitable model for media, we think that effective and advanced utilization of data and data visualization of media value to the advertisers are essential. Yet, some publishers are concerned that they may not be able to earn up to the amount that traditional IO could provide, through the programmatic SSP. In this sense, they are using multiple platforms simultaneously to test for the best results; moreover, a few giant publishers are trying to build their own platform.

What do you think about Deal ID?

Deal ID is the standard protocol used for programmatic ad platforms. It is an important piece for publishers to evaluate value of their ad inventories in programmatic trading where market making tends to fall into buyer-centric perspective.

In reality Deal IDs are still in early stage for both advertisers and publishers, and have yet to be fully exploited. There are not many companies utilizing it yet. However, there have been some attempts in this field and we are seeing positive results. We are seeing its growth in 1 – 2 years and we are ready for it.

How does the MicroAd SSP work with the MicroAd DSP? And how else do you connect to buyers?

MicroAd COMPASS, our SSP, is equipped with comprehensive ad management tools for the publishers to maximize their ad revenue. It is connected with our DSP, MicroAd BLADE, which is used by more than 8k advertisers across APAC for effective display ad management and programmatic ad inventory purchases.SSP n DSP

Among our overseas subsidiaries, MicroAd BLADE has been connected with Google Display Network as the main supply of ad inventory. However, as the demand is increasing rapidly, the launch of MicroAd COMPASS is to provide further inventory for the advertisers.

In Japan, MicroAd COMPASS is also connected with other DSPs to offer more advertisements and more competitive prices for the publishers. We are currently under the discussion with the DSP partners regarding the connection for overseas operations and the partnership will be announced subsequently.

Do you see mobile as a separate channel or is it integrated? How do you see the mobile exchange space changing in the next 3 years in APAC?

It is common to hear that mobile user behavior is different from PC and that the mobile usage and advertising are on the rising trend in APAC. We believe that mobile ads market will witness a dramatic growth rate, even surpassing the PC ads.

Our platform integrates the ad management of PC and mobile ads into a single interface, but publishers/advertisers are able to have different settings for different devices.

What is your future focus?

Currently, MicroAd COMPASS is focusing on serving the major publishers, such as news website, E-commerce site, portal sites and so on. Our target is to reach 20 to 30 major publishers in each countries and a total of 200 publishers across the region within 1 year. At this point of time, we have started the SSP service in Vietnam. We will continue to expand into other countries in which we have set up a subsidiary (Taiwan, Indonesia, South Korea, Philippines, India, Singapore, China, Hong Kong).