Online Display Ecosystem

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

Agenda
Introduction (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

Publisher
Publisher - Typically the website or group of websites owned by a single company. Categories - Arts/Ent | Auto | Business | Career | Education | Family |
Health | Food | Hobbies | Home | Law | News | Finance | Society | Science | Pets | Sports | Style | Tech | Travel | Real Estate | Shopping | Religion

Publishers typically are either digital only (Travelocity) or cross platform (Conde Nast)

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

HuffPo wins an RFP from EBay EBay signs an IO from Huffpo

Ad Side Advertiser Ad Server Ebay Atlas

Pub Side Ad Server

DoubleClick For Publishers

Publisher HuffPo

How Remnant Ads Work (Ad)

Best Buy Signs with Best Buy wants to target tech geeks in urban areas
Buying Channels / Data
Ad.com AdX Appnexus +BlueKai Appnexus Ad.com Google Display more...

Advertiser

Ad Side Ad Server
Atlas

Optimization / Verification
Dapper DoubleVerify

Publisher

Best Buy

HuffPo

How Remnant Ads Work (Pub) Huffpo Signs

Huffpo is not sold out... some of the ads need to be filled...
PubMatic (RTB) Ad.com AdSense more...

Pub Side Publisher Ad Server

DoubleClick HuffPo For Publishers

Sell Side Platform

DSP / Ad Net

Advertiser

PubMatic

Appnexus

Best Buy

The Online Ecosystem in Detail

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

Taking Sides
Advertiser
Agencies | Ad Server | Creative Optimization | Media Planning | Trading Desks | Demand Side Platforms | Retargeting | Media Management

Publisher
Ad Server | Supply Side Platform | Publisher Tools | Ad Operations

Both
Ad Networks | Horizontal, Vertical, Targeted/AMP, Performance Exchanges | Ad Verification | Measurement

Advertisers
Agencies | Ad Server | Creative Optimization | Media Planning | Trading Desks | Demand Side Platforms | Retargeting | Media Management

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 IOs 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 RFPs, price inventory, attribute conversions

Agency Trading Desks

With 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 DSPs 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 RFPs buying inventory, managing 100-1000s of IOs, 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 2000s - 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 Platforms

Supply Side Platforms are focused on helping the publisher to maximize CPMs 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 100-1000s of IOs, trafficking, billing, etc. Operative recently bought Solbright

Advertiser & Publishers

Ad Networks Horizontal | Vertical | Targeted/AMP | Performance Exchanges | DMP | Ad Verification | Measurement

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

Exchanges
Exchanges 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 Models
Revshare | CPM | CPA | Flat Fee | Fee + Usage | Cost of Media

Business Models
Revshare - Ad Networks & SSPs CPM* - AdServers & Exchanges Flat Fee* - Analytics & Publisher Tools Flat Fee + CPM* - Data Aggregators Cost of Media - DSPs & Creative Opt. CPA - Advertisers buy this way
*May have setup fees and/or monthly minimums

CPM Estimates
Direct CPMs for Display $5-100+ CPMs depending on the publisher Often included as part of sponsorships Remnant CPMs $.10 - $10 CPMs to advertisers Revshare 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 Kevin@MoPub.com (510) 299-5500