16 April 2014 - 12:00am | posted by | 0 comments

Telefonica to “shake up” programmatic market with launch of first mobile-only ad exchange

Left: Simon Bailey, Axonix COO; Right: Simon Birkenhead, CEO AxonixLeft: Simon Bailey, Axonix COO; Right: Simon Birkenhead, CEO Axonix

Telefonica is poised to shake up the programmatic market with the launch of its first mobile-only advertising exchange – the first from a mobile operator.

The platform, which is joint-funded by Telefonica and affiliates of Blackstone’s GSO Capital Partners, will be run out of a newly formed, London-based company called Axonix.

This will be run independently of Telefonica, spearheaded by Simon Birkenhead (pictured right), who has left his role as Telefónica’s director of global advertising sales.

Birkenhead told The Drum the launch of the Axonix exchange, which will go live mid-May, will “shake up” the programmatic mobile market, while giving it a significant competitive advantage when it comes to catering to the future needs of mobile consumers.

One of the major benefits for advertisers that use the platform will be the highly sophisticated layers of verified demographic and location targeting the company can offer, according to Birkenhead.

“This is really going to be quite a leap forward for programmatic for mobile because currently mobile advertising suffers from a lack of good quality data for targeting. Yet programmatic media buying is totally reliant on data for it to work.

“The whole idea is that an ad is sold and served in a real-time basis, so every time an ad impression is created there is a decision in real time over which advertiser will buy that slot, and that decision is totally reliant on data.

“In the desktop advertising space there is a lot of data – principally data around cookies – that is available, but in the mobile space there is a real lack of good quality data that has been verified. So for example if you’re L’Oreal you don’t want to pay for ads that are being served to males because it’s generally going to be wasted media budget.

“But at the moment in mobile advertising there are very few ways of having verified demographic data. There are lots of companies that claim to offer demographic and location data, but actually once you dig into the details it turns out they are actually just algorithms that create a probability that somebody might be male or female, whereas operators like Telefonica have verified demographic data so we can guarantee to advertisers that they are targeting the right people,” he said.

The move marks Telefonica’s overarching strategy to be the go-to destination for mobile programmatic advertising, ensuring that it is keeping in sync with increasingly mobile-centric consumers, particularly in Latin American markets where the trend is heading from traditional media straight to mobile, skipping desktop consumption, according to Birkenhead.

“As all media migrates to being mobile we will be in best place to satisfy that need…We are positioning ourselves for that evolution when everything becomes mobile.

“Some of our competitors are going to be left behind here because their platforms have been built around the desktop computer and they are now having to retrofit their technology to suit the mobile ad industry, whereas our technology [which is powered by technology bought by Telefonica and GSO that underpinned the programmatic advertising platform, MobClix] has been built for mobile from day one so we will already be a specialist in that space.

“They are all focused in an area [desktop] that is only ever going to decline, and may not even take off somewhere like Latin America. So we might lose out in the short-term desktop ad space – but in the long-term mobile space this is the place to be and we want to be positioned to be best in market for when that transition happens,” he added.

Axonix already integrates with 100 demand-side platforms (DSPs) partners and will be complementary to offerings such as Weve – the mobile marketing and wallet joint venture between Telefonica, EE and Vodafone.

Meanwhile it also is plugged into “tens of thousands” of app developer publishers, the details of which it can’t yet reveal, but that have transitioned over from Mobclix.

It will now turn its sights to exploring how to work with additional publishers and will be looking to hold talks with the likes of brands such as the Guardian and Mail Online to ensure the exchange can extend beyond in-app to all forms of mobile advertising.

Birkenhead said the launch of Axonix will help shift the image programmatic trading has in the mobile space from remnant to premium, as it can now provide the necessary data to guarantee publishers and advertisers robust, sophisticated audience targeting, which will help drive up pricing.

Telefonica’s global user base of 330 million people can rival those of Twitter and Facebook, but it has “better quality” data with which to monetise its audiences, according to Birkenhead.

He referenced Twitter’s $350m acquisition of MoPub last year – a move which signaled the microblogging site’s intention to better commercialise its data.

“Telefonica data is deeper and richer than Twitter’s – it does not have verified demographic information – it is using assumptions around who you follow on Twitter to assume what you are interested in – it’s all assumed data. What we have is richer,” he added.

Plans to recruit a further 20 roles in the London office are underway.

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