Episode 09: Jonathan Mendez (Yieldbot)
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This week I chat with Jonathan Mendez, founder and CEO of Yieldbot. We dig into the difference in what currency buyers are spending on and what publishers get paid on and how that affects publisher earnings. I also have another family member interrupt my intro and outro (hint: listen carefully).
We start off talking a bit about header bidding and the unique position a company like Yieldbot has found itself in. (one note: We used to work with Yieldbot but do not currently so as far as I can tell I’m not benefiting by being nice to them in any way… I’m just an intrigued by their model).
Sketchy Publisher Moves
It’s kind of funny because now I’m not sure how transparent publishers are about this. We talk about transparency and how we’re trying to move to a real transparent marketplace, which is in everyone’s benefit. It’s hard to know when [publishers refreshing an ad] is going to occur.
We then (briefly) get into some of the things publishers are doing to eek out extra revenue that are at best borderline and the things Yieldbot (and savvy buyers) are doing to mitigate against them.
Publisher Currency vs. What Buyers Want
Their [the publisher] business model does not align with the business model of their customer.
This is the meat of our discussion. We dig into what I’m calling the bifurcation of currencies in adtech. By that I mean buyers are buying and optimizing based on performance data- cost per click, cost per completed view, cost per install… etc. Whereas publishers solely get paid based on CPM. So that means some place, prior to reaching the publisher, a currency conversion is occurring and I cannot imagine a scenario in which that doesn’t end up diluting publisher earnings.
Jonathan makes some really great points talking about how this hurts publishers and what we can start to do.
“This gets back to my theory that DFP and Google’s display is a diabolical ruse to keep this kind of marketplace so that their performance marketplace can make money.”
Anyway the whole talk is really interesting and a topic I haven’t seen discussed much. So for you pubs out there… is this much-ado about nothing or should we actually be talking about this?
Feel free to let me know how dumb I am on twitter/reddit/email/real life.