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STATE OF THE INDUSTRY

Publisher Trends: Brand, Audience, and Real-Time Bidding Online Survey Conducted March, 2011

[Based on Presentation by Eric Klotz, VP Marketing, PubMatic Digital Publishing Summit, Park City, Utah, 03.28.11 ]

DEMAND FOR AUDIENCE TARGETING HAS NEVER BEEN GREATER.
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DEMAND FOR PREMIUM PUBLISHER BRANDS HAS NEVER WANED.
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Premium Brand

Premium Audience

Years ago the two were synonymous
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Premium Brand Premium Audience Over time they became disconnected 5 .

Publisher Fears About Audience VS.! AUDIENCE •  Audience Targeting was historically publisher brand agnostic •  Advertiser demand for Audience Targeting is growing •  Some fear that Audience Targeting will diminish brand value 6 .

It’s Not Brand or Audience – It’s Both +! AUDIENCE •  Advertisers want better transparency (as do publishers) •  Premium brands will always prefer premium content •  Advertisers and publishers want trusted relationships 7 .

THERE IS ONE THING THAT ISN’T CHANGING SOON: 8 .DESPITE CHANGES IN TECHNOLOGY AND PERCEPTION....

9 .ADVERTISERS STILL CONTROL THE BUDGETS.

Study Objectives Finding the greatest demand for buying Finding the greatest opportunities for selling 10 .

The PubMatic + Digiday Study Survey Respondents: 644 Conducted Online March 2011 71% 29% 11 .

Buyers Were Broken Down By Representing Single Advertiser Representing Multiple Advertisers 12 .

Publishers Were Broken Down By Currently opening inventory for RTB Does not currently open up inventory to RTB 13 .

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Demand for Audience Targeted Campaigns Grow. and Definition of “Audience Targeting” Evolves 15 .

Demand for Audience is Growing 97% ACROSS ALL ADVERTISER AND AGENCY RESPONDENTS will use audience targeting in 2011 will have more than 1/2 of their total online spend include audience targeting 47% 16 .

Demand for Audience is Growing 87% 48% will have inventory sold with audience targeting (user level attributes) will have more than 1/4 of their inventory be audience targeted 17 .

which is most important? 90 72% Audience 70 30 10 30 70 29 71 28% Brand 18 .Right Content vs. Right Audience If you can only pick one.

Missing Opportunities 66% 3% have an increase in RFPs that include specific audience segment targeting of publishers have never seen any RFPs that include some audience segment targeting 19 .

Missing Opportunities 47% 30% 23% have had to turn down RFPs due to inability to target the requested segment have not are unsure 20 .

Defining Audience Selling / Targeting Traditional Publisher Definition DSPs / Ad Nets Definition AUDIENCE •  •  •  Publisher collected data Based on limited information Not sold in real-time •  •  •  Robust 3rd Party Data Enhanced targeting mechanisms: creative optimization & 3rd party contextual targeting Sold via Real-Time Bidding 21 .

Defining Audience Selling / Targeting 74% of advertisers prefer to use DSPs and ad networks to target audience Today’s definition of audience targeting includes 3rd party data because that is what the advertisers want 22 .

Publisher Brand: Advertisers Want Both in a Single Campaign 23 .It’s Not About Audience vs.

Brand Safe Environments What is your preferred method for purchasing audience campaigns? #1 Response: Direct from the Publisher “Brand safety and relevant content alignment is of utmost importance to our clients.” Respondent quote from study 24 .

Intermediaries What are the benefits of working with a publisher vs.” Respondent quote from study 25 .Publishers vs. an ad net or DSP? “More transparency and more trustworthy partner. they have a vested interest in being truthful and keeping direct clients loyal.

Combining Brand Value + Audience Targeting will Help Publishers to Meet Market Demand 26 .

Private Marketplaces Today’s definition Premium Brand Premium Audience with 3rd party data Making them synonymous again 27 .

Breaking the Technology Barrier They control RTB budgets They want direct access 28 .

Private Marketplaces: Publisher Sold & Controlled RTB Two-way conversation Two-way transparency Private Marketplaces 29 .

Buyers Want Directly Sold RTB If publishers could sell RTB directly. what would likely be your preferred method of buying audience targeted inventory? ACROSS ALL ADVERTISER AND AGENCY RESPONDENTS RTB far outweighed Non-RTB for audience buying RTB from the publisher received significantly more votes than any other method including RTB from ad nets or DSPs 30 .

DSPs / Ad Nets Least Important Most Important ACROSS ALL ADVERTISER AND AGENCY RESPONDENTS Brand Safe Guaranteed Placement Greater Transparency 31 .Advantage for Buyers Biggest incentives to buy RTB campaigns direct from publisher vs.

Increasing RTB Spend Would having direct access to RTB from a publisher likely increase your overall RTB budget? Likely Not likely 72% 28% 74% 26% 62% 38% 32 .

Increasing RTB Spend Why would you increase RTB spend for publisher direct RTB campaigns? “Having control of exactly which publisher I was running on .with the increased benefit of RTB allowing more efficiency with a quality audience” Respondent quote from study 33 .

RTB is Still Very Young Advertisers are adopting RTB faster than publishers 62% HAVE USED RTB Supply vs. Demand 20% OPEN INVENTORY TO RTB 34 .

Growth of RTB ad formats 2011 21-30 % of online budget across all buyers (Based on most popular responses) 11-20 None 1-10 Video Mobile Rich Media Online Standard Online 35 .

Growth of RTB ad formats Not quite born 2011 Early Teen Infant Toddler Ad format life stage Video Mobile Rich Media Online Standard Online 36 .

mobile.Lots of Opportunity for Publishers 2011 2015 Majority of standard units bought via RTB •  OpenRTB (.info) creating standards across online. and video •  Programmatic ad buying will increase especially as inventory grows 37 .

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now more than ever. have the ability to combine both to meet market demand Get the first mover advantage now 39 .•  Demand for advanced audience targeting is growing •  Advertisers want the best of both audience targeting and premium brand association •  Publishers.

WE TAKE SIDES! ADVERTISER! PUBLISHER! .

CA 94301 New York. 444 High St. NY 10013 .com California Office: New York Office: 100 Vandam St.PubMatic.com www.com Demand partners contact: adnetworks@PubMatic.com For General Information: info@PubMatic. Third Floor Fourth Floor Palo Alto.Learn More About Private Marketplaces Contact Us: Phone: (646) 706-7171 Publishers contact: sales@PubMatic.

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