The Current State of Programmatic as Told by So-net Media Networks DSP

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Programmatic advertising touches a lot of hot topics for advertisers and brands—artificial intelligence, big data, video, and more.

We sat down with Lena Sakaguchi, Merchandiser for So-net Media Networks (SMN), to discuss those trends and more. SMN, a SONY Group company, develops marketing technology in Japan and is listed on Mothers Tokyo Stock Exchange.

She touches on a lot of the trends in advertising today and discusses not only how SMN works to support today’s trends, but also how they’re tackling the future.

Can you tell me a little bit about your background, and how you became a Merchandiser at SMN?

so-net lena“I joined So-net Media Networks in 2006 and started working at in the ad network department called “Valueclick,” which used to be what we called our service. I experienced the sales and operations side of ad networks for two years before I joined the project team to launch our own DSP.

I was the original member of the team that launched “Logicad,” and I have been here ever since. In the beginning, I was in charge of this new product and our system integration as part of the product planning team, but my role changed over time to include partner relations as part of the media buying team.”

In your words, what is SMNs’ purpose, and how do you envision the future for the company?

“We have technological strength which comes from our parent company Sony Group. We provide a variety of marketing technology services in order to achieve our ultimate goal.

We want to be a strong partner for marketers with Logicad, based on three key technologies—artificial intelligence (AI), big data and financial engineering.

SMN obviously has a lot of growth areas and opportunities. What piece of your business is the most exciting to you over the next year, and over five years?

“We’ve already seen great results with Logicad, our DSP, which has the world’s fastest data processing speed, as well and VALIS-Engine, our AI, which is based on the technology developed at Sony’s laboratory.

We also provide a digital marketing platform called VALIS-Cockpit, which is based on VALIS-Engine technology. It provides marketers high visibility into data analysis, supporting the advertisers’ need to optimize their digital marketing planning and operations—and to maximize the results from their marketing performance.

In the future, we’re working towards further improving the technological strength of VALIS-Engine, and achieving even higher ad optimization in terms of targeting, communication and design.

We believe that we will be able to create win-win-win environment for advertisers, marketing technology companies (such as ourselves), and consumers by doing so.”

The industry is in the midst of setting new standards for transparency. How do you work to tackle misaligned behavior and stay transparent?

“From the beginning, Logicad technology highly respected transparency and security standards in order to protect brands—we disclose and provide man-monitored inspections for all site domains.

Nowadays, we integrate third-party solutions to strengthen our standard, and to provide a brand-safe ad fraud solution and viewability measurement solution. We want to be a trustworthy DSP partner not only to help brands, but to provide the best campaign results.”

How have you addressed some of the concerns around brand safety?

“First, we were the first DSP in Japan to provide our Ad Fraud Detector service with a third-party solution in Jan 2016.

We eliminated fraudulent ad buying—our ad fraud service is free for our ad partners.

Next, we developed a safe environment for advertisers through our “brand safe function,” which blocks the unsafe sites and “private marketplaces (PMPs)” that enable delivery to premium sites. Currently, 20% of media buys come through a PMP deal, and the demand is growing.”

What benefits do advertisers gain from the partnership between Taboola and SMN??

“Taboola has an excellent recommendation system and a lot of attractive inventory. Logicad has strength in its powerful distribution logic and operations to maximize the results of those ad campaigns. It was a challenge at first for Logicad to integrate with a recommendation system such as Taboola, but we strongly believed our integration would bring great results.

As a result, click-through-rate (CTR) on ad campaigns through Taboola is especially high—it is more than twice as high as Logicad’s average.”

Can you talk a little bit about programmatic video, and its value for advertisers?

“We launched Logicad video ad service in January of this year.

While it’s still developing each day, we are seeing strength in this market—there is a huge potential for the intersection of big data and video advertising.

We currently have audience extension technology and targeting technology that both use our AI called VALIS-Engine. This technology provides extra value to video ad distribution, and it could even be possible that we could retarget the user who watched a video ad. This supports the advertiser’s multi-level targeting—and I think this seamless ad experience is the part of the programmatic ad.”

What are your predictions for the future of programmatic advertising? Where do you think industry is headed in the next one to five years?

“The ad technology industry moves rapidly. It is not easy to tell five years from now, but I would say online to offline (O2O), out-of-home media (OOH) or sound out of home programmatic and audio RTB will be the next ad trends for our industry. Also, I would expect to see various new ad formats too.

Although, it is true that there are still lot of unsolved problem such as cross-platform tracking and data privacy, we want pursue customer value, and be a part of the healthy growth of the ad industry.”

SMN has been a valuable partner of Taboola since 2017.