The Ad Server Is Playing A Leading Role At Magnite

As more media becomes digital and more buying is done programmatically, the humble ad server is becoming the Swiss Army knife of ad tech.

Data-driven buyers and sellers want a faster, more direct supply chain. Adding functionality to the ad server is the way Magnite is approaching the challenge.

“It’s the backbone of our strategy,” Michael Laband, group senior VP for revenue at Magnite, toldThe Measure. “It’s completely built around the different ways we can empower media owners to manage their different inventory, for ad pods and carriage agreements.”

Laband says that at Magnite, the separate technologies involved in being an ad server and a supply-side streaming platform are effectively being combined. 

To some degree, this is the result of industry consolidation. Magnite itself was built through the acquisition of a number of ad tech companies including SpotX, Tremor, Telaria and the SpringServe ad serving unit. 

But it's also a functional change as advertisers want to be as close as possible to sources of supply and be able to employ numerous data sets to inform their campaign planning and activation.

Those trends have contributed to the compression of the ad tech supply chain.

“Publishers are saying I need a holistic ad tech stack that’s able to appease the needs of where the business is rolling,” he said. 

For Magnite, that naturally meant combining ad server and streaming platform operations.

The thinking was “why don’t we just start the process of consolidation and build a better mousetrap that allows us to effectively go to a media owner and say, 'here’s a place where you can interact with all aspects of the buy side,'” he said. 

Magnite serves connected TV clients including Roku, Samsung and LG. The goal is to make it easier for buyers to find targeted inventory and enable publishers to get more of the ad dollars shifting from linear to digital.

“One one of the biggest reasons why we continue our partnership with SpringServe is the ability to seamlessly connect to so many demand partners,” said Kelly McMahon, senior VP, Global Operations at LG Ads  “It’s been really great for expanding our footprint and partnerships with other companies through SpringServe’s technology."

SpringServe manages the inventory of LG’s free streaming service, LG Channels. In addition to inserting commercials, the server tracks contractual terms with content suppliers and exclusivity arrangements with advertisers. 

“It’s not just an ad server. It’s more modernized for what we use it for at our free streaming service,” McMahon said. 

At the same time, LG has integrated its first-party ACR data into SpringServe, enabling audience-driven sales based on what viewers are watching and what ads they’re seeing. 

“Having our first party-data integrated into SpringServe has been really key to making sure we're serving the most relevant ads and also being able to offer clients full service LG capabilities through programmatic,” McMahon said. “So we’re using the ad server as the starting point where we can add audience and then whether that be a PG [programmatic guaranteed] deal or PMP [private marketplace] deal, or even direct-sold like a managed-service deal,” she said.

Magnite announced its consolidation plan early in the second quarter. It launched a beta version that provided publishers with a unified interface with a single place to log in.  Magnite then focused on creating a smooth workflow that allowed publishers to manage inventory, build smart ad pods and yield as much monetization as possible while respecting business rules, such as brand and category exclusivities.

The capability is now generally available to clients. 

“It's still an evolving process,” Laband said. “There's more workflows we have to continue to enhance and this brain of the technology that we've built allows us to do that. It’s a pretty interoperable solution that works with these different aspects of the buy side.” 

One of the big trends for device and set makers in the CTV business is creating ad formats that appear on their home screens. That’s increasingly becoming a programmatic sale and Magnite is working to make its clients’ home page inventory available through its ClearLine technology. 

At this point LG still has its own ad technology that’s doing the decisioning and managing inventory for its home screen ads, McMahon said. “But we can see that changing as these ad units become available programmatically.”

Other formats, like pause ads, are also becoming programmatic. 

“Publishers are saying ‘make sure the pipes are all set up for this,’” Laband said. 

As Magnite adds capabilities, publishers are calculating how much of an ad tech stack they need in house. Major media companies, who have the resources (money and data), want to own a proprietary ad stack.

“In some cases, they want to build out the ad server itself, like Netflix has their own platform,” Laband said. 

But many publishers would rather leave most of the technology to a partner that has more expertise in that area and use Magnite to handle the plumbing. 

“You’ve seen other companies acquire technology or try to build it themselves and then sunset it,” McMahon said. “I think the advertising community wants to lean into fewer tech partners.”

Looking ahead, Magnite wants to be able to handle more live inventory as football season approaches. “We’ve always really focused on being a leader in live monetization. We do tons of live across the virtual MVPDs.” Laband said.