I was the very first guy hired at MSN to launch their ad sales business. When I started, most MSN Channels (as they were called back then) had their own ideas of what advertising looked like long before the IAB existed to bring necessary standardization to our germinating little industry. As I hired and built out the team, it took us a while to figure out that we actually were losing money selling to advertisers below several thousand dollars a month. Recently I heard Microsoft Ad Sales has now lifted that threshold to $50K/mo. Cost of sales were simply too high to support smaller budget advertisers, and there were thousands of them contacting Microsoft to buy advertising. As the industry matured and standards settled in, innovators crowded in adding layers of complexity to the business and the Demand Side Platform (DSP) was born.
A DSP is simply an aggregator of advertiser demand and, through a common set of tools, large volumes of inventory could be managed on behalf of advertising clients. The purchase model however at the time continued to be the traditional I.O. or Insertion Order. I recall this as I had many negotiations with DSPs who would gather up demand from big budget accounts, and leverage these large sums to drive better pricing with their checkbooks. As the DSP gained traction in the industry, their tools evolved. Agencies execs (as well as institutional advertisers) are a smart and demanding bunch, and DSP quickly staffed and moved to full-scale managed services platform for these blue chip advertisers.
In the past few years a new marketplace emerged called Programmatic (which is essentially the arrival of the premium publishers to the existing exchange market bringing it much needed credibility), and changed everything. This nugget of an idea which no one could explain 18 months ago has spread like wildfire across the industry. E-Marketer forecasts that a full 83% of all display inventory in the US will be sold through programmatic channels by 2017. This sweeping change in the market transformed accessibility to display media and leveled the playing field.
This explosion of access should have resulted in the democratization of display making it available for anyone; large or small. Unfortunately this didn't happen. Turns out the tools and technology these DSPs built weren't designed for the smaller budget advertiser. SMBs weren't even on their radar at the time. Many DSPs had teams of people working on 'managed services', with big budget clients requiring a platform built for volume, and demands requiring a tailored execution. While effective for the '1 to few model', it wasn't built for '1 to many' without hiring lots of people, and they were back to the cost of sales problem I faced 15 years earlier at MSN. There are over 25 million SMBs in the US; 99% of all businesses. 98% of them are local, and in total drive 45% of the US GDP. Small business is a big deal, but the DSPs couldn't afford to help them. They don't have the correct technology or business model and SMBs require a completely different solution.
iPromote began working on its platform technology around the same time as others, and years before the exchange market was ever established, but built it with the single vision to make display accessible to every advertiser. iPromote too opened its checkbook to buy inventory for clients through the old I.O. model, but rather than the national brand soft drink or auto manufacturer, it was the local jeweler, or neighborhood dentist. iPromote's aggregation of demand wasn't from a few big accounts, it was from thousands of local accounts. So while other DSPs were built for the big guys, iPromote was built for the other 98%. With proprietary technology, it is purpose built as a local platform; efficient, precise, and immensely scalable. iPromote's dedication to the local advertiser isn't a sales strategy or marketing piece, it is technology to the core.
I'd like to say timing is everything, but in this case, vision was everything. Quite simply, iPromote chose a different path from the first line of code it ever wrote.