This is a very free record of our conversation with Ivan in the Tekwill cafe. But, since Ivan read it before publication, it was approved by him and could very well have happened in any parallel reality.

Comrade Stalin! What do you smoke?

I’ve recently revised the “Comedy“ release “Stalin and Beria”. I’ll insert the video below so that you don’t look for it. If you start watching it from the third minute, it’s really funny. Stalin (Martirosyan) tells Beria (Kharlamov): “I need a new pipe. I’ll smoke one, and our designers should put chess, an alarm clock and an organizer in the other. Otherwise I’ll shoot everyone. I also want to take pictures and make movies with this pipe, comrade Beria”. When Beria realizes that the execution is inevitable, Stalin adds: “I also want to open the windows with mouse...”. Screwing out with all this the brains out Kharlamov-Beria.

Comrade from the Internet, what do you smoke?

I remember about Stalin-Beria for only one reason. Whenever it seems to us that we are at the peak of technological progress and will always lead it, it’s worth moderating pride. If only ten years ago a guy in sneakers would have come in the office of a large advertising company, shown a bank card with the rest of the money, and said: “I need such an advertisement. As to show it only to men aged over 40 who are interested in BMW and parachuting, they must use an iPhone and show ads in the rain, not at night, but during the day”, then the director of the agency, if he would have listened to the guy until the end, had asked only one question: “Boy, what do you smoke?”

In 2019, no one asked what was smoking someone with such demands for advertising, but simply was making money on them. And the title includes the words “until tomorrow comes” to make clear that these are the game rules now, and what kind of rules will be tomorrow will become clear only tomorrow.

So, we’ve talked with Ivan about the game rules in the global online advertising market “today”.

Let’s start from the beginning. How did a guy from Chisinau get to work in the global advertising market on the Internet?

Firstly, not from Chisinau, but from Cahul.

I don’t think that an online advertising academy has already been opened in Cahul...

After 9th grade, I moved to Chisinau, graduated from the College of Computer Science, became a technical programmer, conquered ULIM, banks and financial institutions, and went to work at “Banca de Economii”. Then it was even a billion poorer and worked.

What year?

2012

And was the work at the bank boring?

Not all the time. I was a system administrator in charge of security in the south of Moldova. At 19 years old it raises your self-esteem pretty well.

However, did you left the bank until the moment the billion passed through it?

Yes, I did. I was fed up a little with the work of clerk, I made a sharp turn and started organizing an electronic music festival in Cahul, I‘ve been doing this for quite long time. But once my friend Marin, who was then in Berlin, called me. His message was something like this: “I’ve found an interesting job, buying and selling Internet traffic. We need more employees, come and try too... ”

Given the fact that the final part of our conversation will be about the online advertising market, have you exchanged Cahul for Berlin?

Yes, I have. I’ve left everything and went. Of course, we worked “for The Man”, but we gained experience. This resulted in a holding of five companies; I’m one of the managers who runs the holding. The main company is headquartered in Germany, one of its subsidiaries is located in Moldova.

So, what are you engaged in?

Programmatic media buying or arbitration of Internet traffic...

This is where we broke off, and I asked Ivan to take a piece of paper and a pen and draw for me a model of a market where someone manages to make money by arbitrating Internet traffic. So now the pictures and many abbreviations will be explained, but we can’t do without them.

So. The earth revolves around the sun, the online advertising industry revolves around Real Time Bidding, (RTB). It‘s very simple. This is a real-time ad auction.

Imagine an RTB hall in the form of a stock exchange hall with real people. Let them wear multi-coloured T-shirts with inscriptions. Who is in our hall?

Supply Side Platform (SSP) is a platform for web publishers and applications through which ad networks or individual sites can sell their advertising space (seller).

Demand Side Platform (DSP) is a platform that facilitates the purchase of online ads, and also serves as the main tool for the effective search of the best sites (inventory) for advertising, in accordance with the parameters necessary for the advertiser (buyer).

Data Management Platform (DMP) is user data provider.

Cost per mile (CPM) is a price model, cost per 1000 (impressions) contacts with the audience.

Publisher is a website or application developer.

More precisely, no. There is no publisher in the hall, it has nothing to do there, its interests are represented by the SSP. There is no buyer in the hall, for example, UBER. And even there are no large affiliate partners - companies that take money and wishes from UBER, the attention of which users should be bought. And even the Agencies are also outside the brackets; they’ve already gave an instruction for the DMP.

So, SSP, DSP, DMP are in the hall. And this is what happens. Moreover online, that is, in several seconds.

A visitor visits the publisher’s website (Publisher).

The browser sends a request for displaying ads to the visitor on the SSP.

Based on the visitor’s data (collected from the browser’s cookies), geolocation, time of his/her visit, and parameters of the available advertising space (size, banner type), the SSP classifies the request according to the maximum number of parameters to form a lot for sale at the RTB auction. For example, it’s known that the publisher’s site visitor, a man from Chisinau, is interested in Halloween.

The SSP transmits information about the request and the user to the systems of advertisers (ad networks). Interested advertisers bid on the lot through the DSP. For more information about the visitor, the DSP request data on the DMP stock exchange of targeting data, which help to complete the visitor’s portrait and determine the value of the lot more precisely. For example, the DMP completed the visitor’s portrait with age information: 18-24 years old

The SSP selects among the bids received the highest one, thereby determining the winner of the auction and discounts it. For example, to the minimum necessary one to win the auction or to the second maximum bid (algorithm of the “second-price auction”). Let’s suppose that three bids of the CPM model were received for the lot: $ 0.50, $ 0.70 and $ 1.5. The auction is won by the advertiser who made a bid of $ 1.5, but the lot is bought at a cost of $ 0.70.

The winner’s advertising materials are transmitted to the SSP, which in turn passes them to the user's browser.

A visitor of the publisher’s site sees an ad of the advertiser that won the lot. In our case, the advertiser, for example, could be some kind of Chisinau night club announcing a Halloween party.

And don’t forget that all this happened while you loaded your page in the browser, or rather in just 0.2 seconds.

Here's what was drawn on a piece of paper from a coffee at Tekwill. Being slightly overwhelmed by this information, I asked Ivan a couple of last questions...

Ivan, how much of the online advertising market passes through this technology?

There are no exact statistics. But we are talking about tens of billions of dollars that are gradually crowding out the old sales channels of online ads.

What kind of t-shirts does your group of companies wear?

We have advertising agencies and the Demand Side Platform in Germany…

Let's do like this ... If this material “goes well” and Google Analytics shows that not only two people read it, I, who checks how the text is administered, and you, who come to check which photo I’ve chosen, we’ll continue. The topic is fascinating, you “stuff” in it, it will be a pity not to continue and not to learn how you can earn on floating by billions. Even very small percentages…

Pavel Zingan