The Teads Founder Reflects on the History of the Development of Contextual Targeting [インタビュー] -Exchangewire Japan

From the perspective of the open web, there is hardly anyone better suited to talk about the vision of the coming cookieless era. How does Mr. Quesada, the founder of Teads, a pioneer in contextual targeting, see the current situation where Cookieless has become a buzzword? He interviewed him during his visit to Japan, including an analysis of the current state of the Japanese market.

(Interviewer: Masatoshi Nagano, ExchangeWire JAPAN)

Platform after 16 years of history

-Please introduce yourself.

My name is Bertrand Quesada, co-founder and CEO of Teads, a global media platform. He has been in the digital marketing industry for 23 years and founded Teads’ predecessor company in 2007. The Japan office was opened in 2015 as the first expansion in the Asian region.

– Please introduce your company’s business again.

At the time of its founding, it was positioned as a marketplace that connected advertisers with bloggers, who were de facto influencers at the time. Until then, PR companies had played the role of connecting advertisers and bloggers, but there was a limit to the number of projects that could be realized through referrals. So we set up a place where both can meet more efficiently. After that, as you all know, many bloggers expanded their activities to SNS.

Before long, video advertising began to be actively used in the digital marketing industry. However, there was no video ad space on the websites of media companies, mainly newspapers and magazines, and the problem of lost opportunities began to emerge. Therefore, we have provided SSP to leading media companies around the world and built a mechanism to distribute outstream video advertisements in the inRead®︎ format to approximately 2 billion consumers.

In the Japanese market, we currently reach 73% of Internet users. In addition to buying and selling ad space, it has been reborn as an advertising platform by adding various optimization support and data analysis functions related to online advertising.

―What kind of differentiation are you trying to make as an advertising platform?

If Google is a way to know what kind of searches are being done in the world and what kind of things are “liked” on Facebook, what kind of user is Teads? It is a platform that allows you to know what kind of content is reading. We pride ourselves on providing highly beneficial information to advertisers.

In fact, in the Japanese market, 80% of the advertisers and advertising agencies that do business with us directly purchase ad inventory held by us through Teads Ad Manager. It can be said that these advertising people have judged Teads to be superior compared to other ad distribution platforms.

Most recently, we’re stepping up our efforts with e-commerce and retail media, in addition to lower-of-funnel performance areas and distribution to connected TVs.

―I get the impression that contextual targeting is mostly used in the upper and middle funnels, but does it work in the performance realm as well?

Generally speaking, for an ad to perform well, it must first be delivered at a scale. It is also important to use data and machine learning to find the best combination of quality, advertising and users. Any contextual targeting solution that meets these two requirements will also work at the bottom of the funnel.

What is Context Dominance?

―With the abolition of third-party cookies, attention to contextual targeting is increasing.

Our past proof-of-concept experiments have shown that contextual targeting based on good data leads to lower cost-per-click (CPC) and higher click-through rate (CTR) than cookie-based targeting. The data used in contextual targeting is more accurate because it is what the user sees in real time, as opposed to cookies, which are effectively historical information and contain a lot of outdated information. I would say yes.

In addition to these benefits, the deprecation of third-party cookie support on major platforms has made contextual targeting even more important. iOS devices, which account for 50% of advertisement display in the Japanese market, are already cookieless, and there are media companies that have almost halved their earnings over the past few years, despite the fact that the number of advertisement display times has not changed significantly. increase.

As you know, the business model of distributing content for free on the Internet is supported by advertising revenue. Profitability has declined due to the abolition of third-party cookies, and in a situation where walled gardens are not sufficiently returning profits to media companies, a solution like ours that can be used without cookies is very significant. thinking about.

The functions we provide to advertisers are not limited to contextual targeting. We offer a variety of solutions, such as the Cookieless Translator, which converts data that includes third-party cookies into cookieless data, a highly secure function that complies with the protection of personal information.

―What kind of responses will media companies be required to take in this difficult environment?

At the same time as attracting as many users as possible through the provision of high-quality articles, we will continue to be required to distribute highly relevant advertisements according to the characteristics of each user.

However, publisher sites are no longer the only place where publisher content is read. Today, various platforms such as SNS are also supply destinations for content. In today’s society, in order to “deliver high-quality articles to many users”, extremely complex know-how is required. Teads would like to support the monetization of media companies by solving various issues through platform development.

―How do you perceive the environment surrounding advertisers?

Advertisers are also desperate for efficient and effective solutions as they face a variety of challenges linked to changing international political and economic situations such as Ukraine and China. Teads continues to make every effort to meet such demand-side demands as much as possible.

We don’t just blindly sell video ads. We offer carefully selected video ad slots with high viewability and completion rate.

Advertisers are also becoming more conscious of brand safety. This is because, as a result of the creation of an environment where anyone can publish content on SNS, etc., it has become increasingly difficult to ensure brand safety. We ensure the safety and quality of campaign distribution through multiple layers of screening and verification.

Current status and prospects of the Japanese market

―What is your impression of the Japanese market?

Rather conservative, I have the impression that it takes a certain amount of time for new technologies and concepts to permeate. For example, when we opened our Japan office, no one in the Japanese advertising community reacted to the terms brand safety, viewability, and ad fraud that we had been working on since then.

On the other hand, I think the interesting thing about the Japanese market is that once a technology or concept begins to spread, it is standardized like an avalanche, and it is thoroughly mastered.

―What kind of technologies or concepts do you expect to penetrate the Japanese market in the future?

Awareness of “attention”, which is an indicator of how much users actually see advertisements, should increase. Until now, the online advertising industry has overestimated CPM, or “how cheaply you can buy ad space,” and neglected the quality and effectiveness of ads.

According to viewability tool Moat, the average viewing time for video ads served by Teads is 10 seconds or more. On the other hand, the average viewing time of videos on SNS is only about 1 second. What kind of message can be conveyed in one second? As the concept of attention permeates, I think that awareness of the quality and effectiveness of advertising will increase dramatically.

―In recent years, there are quite a few businesses that handle contextual targeting.

Since 2007, when our predecessor company was founded, we have been working on contextual targeting for a long time. Through the operation of platforms with various functions, we have refined each solution while listening to the voices of advertisers, media companies and users around the world. There is a world of difference between just developing a contextual targeting technique and having experience solving multiple problems with it. No other company has developed its technology for text and contextual understanding globally and has accumulated know-how over 16 years.

For a company with a track record like ours, there is no need for arbitrary differentiation strategies. At the end of the day, advertisers and publishers choose platforms that actually work, rather than detailed descriptions of differentiators.

We will continue to fulfill our role by accumulating achievements and success stories.