Summary:

Google’s pending $400 million purchase of supply-side platform AdMeld has shown, there’s a lot of interest these days services that aim to p…

Kirk McDonald

Google’s pending $400 million purchase of supply-side platform AdMeld has shown, there’s a lot of interest these days services that aim to protect publishers’ revenue as more ad dollars flow through ad exchange systems. But publishers are still tentative. As a vendor, the best way to prove to publishers that you understand their interests is to hire one of their own as an emissary. With that in mind, PubMatic has made a key hire: former President of Digital for Time Inc. (NYSE: TWX) Kirk McDonald as its first president.

For McDonald, the move comes after he left Time Inc. in the middle of former CEO Jack Griffin’s wave of changes and department restructuring. He had been with the publisher for three years, including a stint as chief advertising officer for Fortune|Money Group. Over the course of the two decades McDonald’s worked in ad sales, he’s held executive posts at at CNET, Ziff Davis and Condé Nast. Just before working at Time Inc., McDonald was at Microsoft’s targeting unit DrivePM.

That experience will all go toward convincing premium publishers they should go with PubMatic. Both PubMatic and rival The Rubicon Project, as well as the recently funded Yieldex both say that publishers have expressed increased interest in their services since Google (NSDQ: GOOG) made its bid for AdMeld. The concern on the part of some publishers is that since Google owns a demand-side platform, Invite Media, working with AdMeld could contribute to Google’s dominance of display.

In an interview, PubMatic’s CEO Rajeev Goel said that “GAAP revenues have been up by 51 percent from Q2 to Q3,” though he didn’t offer specific dollar figures.

The one area that holds the most promise in convincing publishers to sell more inventory through RTB has been the emergence of “private marketplaces,” which allow sellers more control about who can bid on their ad placements. PubMatic has been rolling out its own private marketplaces since the summer, as have Rubicon and AdMeld.

“Publishers will need more automated solutions to help them manage advertising inventory, audience data and content inventory which all seem to be growing in abundance,” McDonald told paidContent in an e-mail. “Especially on the ad sales side, RTB and private marketplaces will be essential in active selling strategies moving forward and publishers should only be concerned if they are handing over control to a third party to represent their inventory or their data. With a strong partner for automation tools, publishers will be able to have more dynamic control of sales channel for sponsorship, integrated programs and their reach display inventory.”

Essentially, the focus for companies like PubMatic is going to be less on tools and more on service. “This is new ground for most publishers, so more tools doesn’t immediately translate into more help.” McDonald said. “It sometimes means more confusion and more hyped promises. The challenge for the publisher today is sifting through the clutter of an already crowded eco-system of point solutions. When we spoke earlier this year I mentioned that what’s needed is a true system integrator to help the publisher make sense of a lot of rhetoric.”

In addition to focusing on the service side of the business, McDonald will also be scouting out and evaluating acquisitions, Goel said. In May, PubMatic acquired ReviNet, in part for its relationships with premium publishers like The Christian Science Monitor, Dallas newspaper owner A.H. Belo (NYSE: AHC), and The Sporting News

“We’re contacted by three or four startups every month about doing a deal,” Goel said. “And we’re evaluating two or three prospects at any given time. Specifically, we want to buy something that’s in adjacent business areas to us, can help drive customer traction or provide geographic expansion.”

Goel also will rely on McDonald to help chart the company’s evolution.

Aside from the Google/AdMeld deal, PubMatic and its rivals have been evolving over the past three years, when they started out as “yield optimizers,” whereby they offered to help boost prices for publishers’ unsold inventory.

In a blog post this summer, Jay Sears, GM of ContextWeb Exchange, provocatively suggested that the SSP model was “dead” as these companies were simply “exchanges,” now that optimization had moved to the buy side.

In his view of the way SSPs are changing, Goel told paidContent, “The role for us is increasingly as a tech provider and as a trusted advisor to publishers,” he said. “We find increasingly, we adopt the tech or build it ourselves. We built out our data management platform. Pubs don’t want a different set of standalone tools. They don’t want to go somewhere to protect their pricing and then to another company to have their data analyzed. They want to integrate their media and data analyzed in one tool. That’s where the business is focused now.”

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