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PubMatic Default Optimization 2009

PubMatic Default Optimization 2009

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Published by: PubMatic on Jul 01, 2009
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02/28/2011

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TechnologyWhite Paper 
Automating an End to Ad Network Defaulting
Technical Level of White Paper:Technology Outlined:
Default Revenue Optimization
Technology Benefits:
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Table of Contents
Executive Summary.......................................................................................................... 3De
ning Ad Network Defaulting........................................................................................ 3The Fact – Ad Networks Default.............................................................................. 3Why Ad Networks Default........................................................................................ 4• Current Online Advertising Trends Indicate Even More Defaulting to Come........... 5How Publishers are Currently Dealing with Defaults........................................................ 5The Ideal Approach to Default Management – Dynamic Default Optimization................. 7• Bene
ts from Implementing Dynamic Default Optimization.....................................8• Examples of Publishers that Have Used Dynamic Default Optimization................. 8Fitting Dynamic Default Optimization Into the Overall Frameworkof Ad Revenue Optimization............................................................................................. 9Conclusion...................................................................................................................... 10About PubMatic............................................................................................................... 11
Published by PubMatic, 2009
2
TechnologyWhite Paper 
Automating an End to Ad Network Defaulting
 
Executive Summary 
Up to 80% of online ad space goes unsold from direct sales
¹
. Online publishers that want tomaximize the revenue they get from their unsold ad space generally work with ad networksto
ll that space. Savvy publishers typically choose to work with multiple networks in partbecause of a problem known as defaulting. Defaulting, sometimes referred to as pass-backs,occurs when an ad network is unable to
ll an ad impression on a website with a payingad. Often, a non-paying public service announce-ment or a blank spot is shown. Many webpublishers chain several ad networks together to reduce the chances that a non-paying ad isserved, but these methods are far from perfect.This white paper describes in detail what defaulting is, why it happens, why the current methodof daisy chaining is inef 
cient, and how to solve the problem. The information in this whitepaper is based on over two years of data collected by PubMatic’s team of 30+ engineers thathave worked towards solving this problem; defaulting leaves billions of dollars in revenue onthe table each year that could have otherwise been collected by publishers and ad networks.
De
ning Ad Network Defaulting
 
The Fact – Ad Networks Default!
Ad networks are becoming increasingly selective about the type of impressions theymonetize. If an impression doesn’t match the desired criteria of an ad network’s advertisingcampaigns, then it either shows a public service announcement, a blank spot, or returns theimpression to the publisher. All three of these actions are known as defaulting, as the adnetwork has chosen not to display an ad for which the publisher will be paid.By working with over 5,500 publishers and 300 ad networks, PubMatic has found that adnetworks default 56% of the time on average and as much as 87% of the time
²
.
1
Interactive Advertising Bureau / Bain Digital Pricing Research, August 2008.
2
PubMatic study of online publishers conducted in April 2008.Published by PubMatic, 2009
3
TechnologyWhite Paper 
Automating an End to Ad Network Defaulting

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