online ad ecosystem ga 8.22.11

Online Display Ecosystem

A detailed introduction to the online advertising display space... Banner ads 101

AgendaIntroduction (15 min)Demo | Lumascape | Industry

Online Advertising (15 min) Advertiser | Publisher

Technology (15 min)Direct | Remnant

Ecosystem in detail... (30 min)

Questions? (15 min)

Introduction

Google thinks the whole market is going to expand fast. Mohan estimates that the entire global display field is between $20 billion and $25 billion today. By 2015, he thinks it will double in size to $50 billion, and eventually grow as large as $200 billion annually.

Source: CNN Money

How is an ad Served?

Almost no site is sold out

So sites use 3rd parties

To help them sell ads...

Which is simple & easy right?

Wrong!

Hundreds of companies make up...

The Online Adverting Ecosystem

Online Display Advertising

From the Advertiser to the Publisher: 2 ways

Advertiser The Advertiser - Brands that buy ads to promote or sell the product/service etc...

The Agency - Most large Ad Buys utilize an agency to buy ads on their behalf

Agency Holding Companies - The 4 companies that own most agencies & control 80%+ of media spend across TV, News, Mag, Radio & Digital

Goals Advertiser Side - Goal to get highest performance / exposure to the ‘right audience‘ “Reach the right people at the right time in the right place at the cheapest price”

Publisher Side - Goal to make the most money (highest CPM) from their ads, while still maintaining advertising integrity.

Price is what causes the most friction

How are ads bought? Direct - Advertiser/Agency Buys Direct from the Publisher

Remnant - Advertiser/Agency Buys via a 3rd party (ad network/dsp) to run on the publisher

Almost all ads are bought via a process that includes a RFP (Request for Proposal) and then an IO (Insertion Order)

Some companies have moved to an Open IO

How Direct Ads Work

AdvertiserAd Side

Ad Server Pub Side

Ad Server Publisher

Ebay Atlas DoubleClickFor Publishers HuffPo

HuffPo wins an RFP from EBay

EBay signs an IO from Huffpo

How Remnant Ads Work (Ad)

Ad SideAd Server Publisher

Atlas HuffPo

Best Buy wants to target tech geeks

in urban areas

Best Buy Signs with

AppnexusAd.com

Google Display more...

Buying Channels /

Data

Ad.comAdX

Appnexus+BlueKai

Optimization /Verification

DapperDoubleVerify

Advertiser

Best Buy

How Remnant Ads Work (Pub)

Pub SideAd Server Publisher

DoubleClickFor Publishers HuffPo

Huffpo is not sold out... some of the

ads need to be filled...

Huffpo SignsPubMatic (RTB)

Ad.com AdSensemore...

Sell Side Platform

PubMatic

DSP /Ad Net

Appnexus

Advertiser

Best Buy

The Online Ecosystemin Detail

20 Categories, 100’s of companies & billions of dollars...

Agencies

4 Major Agencies control the majority (80%+) ad spend

WPP | Publicis | IPG | Omnicom

The agency holding companies represent hundreds of smaller agencies & advertisers...

Ad Side Ad Servers

When buyers buy, they want the control of using their numbers - they control this by using their ad server

Advertisers almost all advertisers sign IO’s using their ad server numbers

DFA (doubleclick) & Atlas control the majority of ad side serving...

Creative Optimization

Recently companies have emerged to help advertisers to change creative in real time for better response... Previously if a campaign was performing bad it had to be paused

Teracent & Dapper were recently acquired but there is a lot of innovation still happening here

Media Planning

These companies have come along to help media buyers buy ads, create RFP’s, price inventory, attribute conversions

Agency Trading DesksWith the rise of Real Time Bidding - The agencies have consolidated their real time buying efforts into trading desks

Often these trading desks work with multiple DSP’s to gain access to large amounts of inventory in real time

Many holding companies are requiring a percent of each spend go to the trading desks

Demand Side Platforms

Demand Side Platforms are focused on helping the advertiser to buy inventory at scale and in real time. This has also resulted in more sophisticated targeting & real time changes

Invite media which sold for $70 million is the only large exit so far...

Retargeting Companies

Retargeting companies are focused on helping advertisers to identify clients who may not have bought & bring them back.

Dotomi was acquired by Valueclick for $295M & Criteo is claiming over $200M annual run rate

Media Management Systems

These companies are focused on services to help advertisers with creating RFP’s buying inventory, managing 100-1000’s of IO’s, trafficking, billing, etc.

DDS & MediaBank are making moves into online advertising

Publisher Ad Server | Supply Side Platform | Publisher

Tools | Ad Operations

Pub Side Ad Servers

With DFA becoming the standard in the early 2000’s - DFP (Doubleclick for Publishers) became the predominant publisher ad server

Many estimated put Google as controlling 70%+ of the publisher ad serving

Google has DFP, AOL has Adtech, Yahoo has APT, MSFT has Atlas

Supply Side PlatformsSupply Side Platforms are focused on helping the publisher to maximize CPM’s from RTB & Ad Networks. They also function as a protection layer for publishers against low quality ads, excessive pixel dropping, and more

AdMeld was bought by Google for $400M, PubMatic bought Revinet and is likely next...

Publisher Tools

Publisher tools are focused on making life easier for publishers... some help with yield optimization for direct, others track discrepancies & more...

YieldEX helps publishers allocate & forecast direct sales (especially important with advanced targeting)

Ad Operations Support

These companies are focused on services to help publishers with managing 100-1000’s of IO’s, trafficking, billing, etc.

Operative recently bought Solbright

Ad Networks: Horizontal

Ad Networks have been around since the beginning of online advertising and they help ad buyers to get access to large amounts of inventory that would otherwise be too small

Real Time Bidding has disrupted the ad network model quite a bit

Ad Networks: Vertical

These ad networks are focused on a specific vertical, group of publishers or direct selling publisher inventory

Many of these networks as publishers to exclusively work with that network or to ask for ‘1st look’ at inventory

Ad Networks: Audience

These ad networks are focused on a specific audience or the ability to access specific audiences. They often try to get inventory from publishers at a flat CPM and then sell different advertisers into that inventory based on audience matching.

Lotame announced last week they were no longer going to be an ad network and focus on helping publishers with audiences.

Ad Networks: Performance

These ad networks are focused direct response advertisers, often trying to pay publishers on a CPC or CPA.

Many of these networks are text based and work with lead generation / DR advertisers. They typically only care about performance and will accept almost any publisher

ExchangesExchanges function to serve both publishers and advertisers in a auction (sometimes in real time)

Google picked up the doubleclick exchange (AdX) which is the largest exchange (also integrated in DFP)

RightMedia is still a significant volume of inventory but with the move to brand, evolution of appnexus and lack of RTB many clients are leaving

DMP / Data Aggregators

Data aggregators for the most part are focused on buying data from publishers and data sources so that they can then package that up to advertisers

Bluekai & Exelate lead the ‘intent’ data creation helping advertisers to target on new variables like ‘auto intent to buy’

Rapleaf has faced public scrutiny over personal privacy data

Verification / Privacy

These companies are focused on Protecting advertisers to make sure they are running in ‘safe environments’ & within the IO.

On the other side companies like MediaTrust & Evidon are helping publishers against ad side viruses & pixels

Measurement & Analytics

These companies help both advertisers & publishers to understand things like on site analytics, value of a user, conversions, stats, page views & uniques etc...

comScore is the most widely used source for media buyers to find the sites that match the audience segments they are trying to reach

Business ModelsRevshare - Ad Networks & SSP’s

CPM* - AdServers & Exchanges

Flat Fee* - Analytics & Publisher Tools

Flat Fee + CPM* - Data Aggregators

Cost of Media - DSP’s & Creative Opt.

CPA - Advertisers buy this way

*May have setup fees and/or monthly minimums

CPM Estimates

Direct CPM’s for Display$5-100+ CPM’s depending on the publisherOften included as part of ‘sponsorships’

Remnant CPM’s $.10 - $10 CPM’s to advertisersRevshare to the publisher ranges from 90% - 50% or less

T-Shirt Questions

What is the size of the US display market according to Neil Mohan of Google?

What is the largest acquisition of the companies discussed today?

Which company did MSFT invest $50M in this space?

T-Shirt Questions

$20B

$6B Aquantive/Atlas by MSFT

Appnexus

Questions?

Contact Information

Kevin Weatherman Dir of BD at MoPub [email protected] (510) 299-5500

mailto:[email protected]

online ad ecosystem ga 8.22.11

Documents

huffpo ad

majority of ad

ad server advertisers

large ad buys

retargeting companies

ad serverswhen buyers

party ad networkdsp

hundreds of companies