PubMatic: initial impressions

I’ve been thinking a lot about publisher monetization lately – and since the last time I played with publisher monetization, a lot of startups have been launched. Today I looked at PubMatic, a well-funded startup that’s been available in alpha (now beta) since August 2007. PubMatic optimizes advertisements to maximize yield for the publisher, both through modifying text link colors on the fly (for AdSense) and through an ‘ad auction’ between competing ad networks.

Sign-up was relatively painless. There’s no minimum impression cutoff or need for a human to approve your account, which is very nice. During the sign-up, you’re asked to enter your account credentials (login and password) for PubMatic’s list of preferred ad networks – AdSense, Yahoo Publisher Network, ValueClick, Komli, BlueLithium, AdBrite, BurstMedia, Advertising.com, Tribal Fusion, and Casale. A good list – I’d heard of every one of these but Komli. PubMatic provides links to each should you want to sign up for an account there and then – although signing up for an account may not be instantaneous and may require minimum traffic requirements. It looks like PubMatic’s earning some affiliate fees here from new account sign-ups.

I had an AdSense account, so I got started with it. I’m always wary about sites that ask for other sites’ credentials – and even though PubMatic uses 256-bit encryption to pass along the credential, this isn’t enough information. What happens to my password after I sent it? Is it stored in a database or just used once and thrown out? In what form is it stored? How do I know it’s secure? Are the servers in a secure facility? Is employee access to the database limited and monitored?

Anyhow, my AdSense revenue is small potatoes, so in the password went. My account was then ‘linked’. After the linking process comes the terms of service – since I’d already provided my Google AdSense credentials, this feels out of order to me. The terms of service are pretty standard, although here I do find out that PubMatic is a business unit of the ad network Komli. Also interesting in the terms – you can’t put PubMatic ads in error pages or ‘thanks for registering’ pages. Also a clause that reads “PubMatic will bill you for services provided by PubMatic in relation to the depth and breadth of services provided.” (In the beta period, it’s free.)

On finishing sign-up you’re given the opportunity to start generating ad tags. This is straightforward enough – chose a size, choose which networks will run against it, choose ad position. For text ads, PubMatic will optimize your colors – if you’ve got enough impressions to do something statistically significant, which I don’t. (I therefore passed on the opportunity and used my standard palette.) I’ve set up PubMatic on the little 468×60 adsense block below each of my posts. Simple enough to swap out tags on my WordPress theme.

Of course, with this initial setup, PubMatic’s just acting as an AdSense wrapper, which isn’t so useful. Optimization services need multiple things to optimize. So I created an account at AdBrite – a preferred network on PubMatic – and linked it to my account by giving PubMatic my new AdBrite login and password. I also added an ad network that wasn’t a ‘preferred network’ by pasting in an ad tag from the network and entering an eCPM. This is exactly how any auction system that deals with third-parties works – since PubMatic doesn’t have the login credentials and can’t scrape the third-party site (or in the best case query the third-party’s API), it’s up to the publisher to make sure the eCPMs reflect reality, or the auction won’t be accurate.

Editing my already-created tag to make sure AdBrite and the third ad network could compete with AdSense was simple, and I was pleased to see I didn’t need to retag my site to add additional partners. Regrettably, I’m not going to get enough traffic here to accurately determine how well Pubmatic works. But it’s easy enough to see how it works by watching the HTTP headers. First the PubMatic ad tag sends a user ID cookie to PubMatic and retrieves a bit of JavaScript. The JavaScript writes back an IFRAME with a URL containing all the variables needed to fetch the winning ad tag, which is called by the usual document.write function. It also writes a tracking beacon to confirm the ad is seen, and for self-promotion places an ‘optimized by PubMatic’ div tag, with absolute positioning, directly beneath (but not within) the IFRAME containing the ad. The IFRAME prevents the advertiser’s ad from touching the publisher’s DOM, which is handy – although from the JS it’s pretty obvious PubMatic can serve plain old script tags as well. Nothing that surprises me here, apart from the unobfuscated JavaScript.

Overall impressions: hard to say, since the true value of Pubmatic depends on the sophistication of its optimization, and that’s something I can’t determine. I’ve got no doubt that it can, given a statistically large enough sample, come up with the correct color scheme for your text ads, which is useful. However, I’m very curious about the optimization done between display ad networks. Is Pubmatic simply monitoring the performance of each ad network daily or hourly and adjusting the eCPMs based on that? (Which, don’t get me wrong, is a lot better than nothing.) Or is Pubmatic doing something more sophisticated to account for differences in performance between ad networks? The ad network Komli ran a contest in India, in which they said

Komli is currently using a set of algorithms for maximizing the yield of online ads, collectively called ‘Yin-Yang’. There are a lot of interesting alternative approaches to Yin-Yang that have yet to be tried. Komli is interested in determining if any of these alternative approaches can beat Yin-Yang by making better predictions.

That sort of active search for better algorithms sounds promising. But any ad optimization service that’s relying on third-party ad network tags is going to have to work around some serious constraints caused by lack of real-time, granular reporting from the ad networks. Looking forward to seeing how PubMatic develops.

Full disclaimer: I work for Yahoo – and worked for Right Media before Yahoo bought it – but in order to avoid real or perceived bias have refrained from mentioning the competing product we offer or comparing any features of it to PubMatic here.