Insights into the European native advertising scene through the lens of Europe’s biggest native ad player [interview]
Ligatus is Europe’s biggest native ad platform, powering native ad revenues for leading European publishers across 10 countries (most recently the UK), with a staff of 180+ people and an impressive list of brand advertisers using the platform.
Ligatus’ growth has tracked the increasing dominance of native advertising in the European media ecosystem, as users increasingly block ads due to bad advertising user-experiences and major social platforms like Facebook double-down on native ad formats aligned with the growth of mobile usage - and poor performance of display ad formats.
Hackers.Media sat down with Ligatus COO Julien Mosse to get a glimpse behind the scenes of this European native advertising powerhouse to get a better understanding of the European native ad market and the secret behind Ligatus’ success.
Q: For those that have never heard of Ligatus, who are you and what do you do?
A: Ligatus is a full-stack native advertising platform. By full-stack we mean that our solution provides both supply and demand-side technologies. Back when we started in 2003 our technology was initially focused on the publisher-side, providing the best way to monetise a publisher’s site beyond Google AdSense; back then we were called ’text-link + image’ - before the term native advertising had been invented! Over the years we have advanced our publisher technologies, through organic development and via acquisition.
In the last few years we’ve put a big focus too on the demand-side, and recently acquired the German DSP technology company LiquidM. This acquisition means we now have best-in-class technology on both the supply and demand sides.
Q: Talk through your history, and how you’ve grown over time.
A: We started life back in 2003 when the term native advertising didn’t exist, and publisher monetisation was dominated by Google AdSense. We rebranded ourselves Ligatus in 2005, and were acquired in 2008 by Gruner-Jahr (G+J), the Bertelsmann-owned publishing company. Since then we’ve grown in many ways - product, geographies, people and revenue. We’ve always been headquartered in Cologne, Germany but after the G+J acquisition grew rapidly across new European territories; initially we focused on France, Austria and Netherlands, and then we expanded into Spain, Belgium, Italy, Turkey and Switzerland - close to adding a new territory every year.
Our most recent country launch is the UK - which we are launching into this week!
Along with geographic expansion, we’ve also developed the product in line with market needs and technological advancement. Programmatic has been a big focus for us over the last few years, especially with the launch of Programmatic Native and RTB2.3. To keep up with technological development we’ve made various strategic acquisitions, including LiquidM (a mobile-first DSP) on the demand-side, and Veeseo (a technology designed to optimise content recommendations) on the supply-side.
On the people front we’ve grown to 180+ people now, across 7 offices - operating across 10 countries, and working with 1400 publishers delivering 37 billion impressions a month. Although these are big numbers, we are keen to always emphasise that size isn’t the key for us, but rather quality. When we talk about quality we mean we guarantee a brand safe environment, no clickbait, no fraudulent or poor quality websites, nor misleading ads. Our mission is to provide a positive advertising experience for advertisers, publishers and users.
Q: This week you launch in the UK, your 10th European country. Could you explain the rationale around your European growth and why you’ve left the UK market for so long?
A: We consider culture, maturity of market and size as key factors when planning to launch into new geographies. An additional factor to consider is the dynamics of the global media market and suitability of our product. Historically Ligatus operated the classic network model, which required us to build supply and demand at the same time. In the context of UK in particular, this historically created a challenge for us, as a lot of UK traffic on premium sites is international, largely from the US, which we couldn't monetise. Now that Ligatus' product has evolved and with our new programmatic offering, we're now in a position to launch in the UK - building up our UK business on the demand side with our primary focus on generating international campaigns for our existing supply.
Our market entry in the UK represents another important milestone in our international business development. There is a fundamental need for many domestic and international advertisers in London to utilise the kind of offering Ligatus’ will bring to the industry. Following many successful years of development and partnerships in other key European markets, we genuinely believe Ligatus UK will be a huge success and allow programmatic, performance and brand advertisers access to opportunities that currently do not exist in the market.
Q: What are the biggest challenges you face today?
A: An important challenge for us is the huge quality gaps that exist in our market. Ligatus has a high end positioning which means we offer a selective and complete brand safe network to our advertisers and their agencies. In an era of clickbait and fake news we are convinced that premium customers need a selective network with clear editorial guidelines, like in the distribution world. Unfortunately, most of the other native ad players are put in the same box, so we need to educate the market. Many advertisers are not aware of the damage it creates to their brands! On the publisher's side, it is the same. They lose credibility and damage the user experience when working with a clickbait ecosystem. We are also selective when it comes to the type of advertisers we work with to offer a brand safe environment for our publisher’s too. Which is also a strong USP for brand advertisers who need a safe commercial environment.
Other important challenges we also see in our industry are ‘Ad-blockers’ and ‘data protection’.
The Adblocking challenge is different per territory and also different per type of publisher. For example, adblocking is a bigger issue in Germany than it is in the UK; and it’s a bigger issue for publishers who publish technology titles compared to publishers of female titles. One important position we take when it comes to adblocking is that we will not finance adblock companies that cut off main advertising streams from premium editorial publishers. i.e. we don’t make deals with the big ad blockers. Instead we have a two stage approach. The first stage is ‘education’, educating publishers that they should optimise their ads around respecting the experience of the user. The second stage is ‘technology’; we have our own technology (via a partner) that allows us to unblock ads, and replacing blocked ads with Ligatus’ native ad formats. An important thing to note is that we don’t replace all blocked ads with new ads, as this would contradict our view that publishers should respect a user’s experience. Our anti-ad blocking technology works 90/95% of the time.
Data protection, and the question of what data is held and where it is held is a huge concern for publishers in Europe. We’re certified by EDA which gives our publishing partners confidence that we won’t abuse users’ data. Additionally, most of our servers are based in Europe, with only some of LiquidM servers being in the US; and we comply with all EU privacy guidelines.
Q: What next for Ligatus?
A: We want to further establish ourselves in the UK, build up the supply side there and after successfully building up the demand side for the existing countries, then make a move to the US. If you want to be a global player, you have to be there, and keep on scaling further even Asia or MENA where we are already starting operations out from our Istanbul and Dubai.
We have a vision, an economic model and have always believed that our company is all about people and technology. We have great people, and we need to carry on investing in them. Our technology is very strong too - but as always, we’re constantly improving it. It’s difficult to say what Ligatus will be in 3 years, but compared to 3 years ago the company is completely different - so it’s exciting times!