The Leadership Letter

Real correspondence from the people running real companies — and what it reveals about leadership.

When Your Moat Shrinks, Know Exactly What You're Still Worth

A dominant market position isn't the same as a defensible price — and knowing the difference before your customer does is the whole game.

Jonathan Bellack (Director, Product Management, Publisher Ad Platforms) wrote on Jan 30, 2017: 'I think it's going to be hard to prove those values. How do we prove that other systems have a lot of malware and we don't, if we won't reveal all the details of how we do malware detection?'

Aparna Pappu responded: 'The value we add is DRS, RPO, EDA, Selective/Efficient callouts, Malware protection — in my mind this is HUGE and worth 15% itself — we need to do a FAR better job of calling out the impact of what we do here.'

Bellack also noted: 'If everyone else is at 20 we can justify 20. We never originally intended to have AdX as a premium over other exchanges, that was market price. Now that Index is at 10% and AppNexus is offering 5% at least as a promotion, the question is whether we can defend a 50% or 100% premium (15-20% vs 10%). I do not think it is feasible to try to defend a 3-4x premium (15-20% vs 5%) on third party AdX buyers.'

From IAB intelligence shared by Bellack: 'Hearst TV estimates that if he turned off AdX he would lose 30% of programmatic revenue, because every other SSP is second-string... Rumor that the DSPs are very serious about trying to get out of exchanges and work through header tags.'

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Court Exhibit
United States v. Google LLC (Ad Tech)
1:23-cv-00108 (VAED), Doc. 1195-5, filed 2024-08-22
February 1, 2017
Public domain
View the primary source →