Market Implications & Recommendations

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As buyers realize the benefits of RTB including cost efficiencies, reduced ad waste, scalable reach, transparency, and control, ad spend will quickly transfer from traditional display advertising to RTB platforms. The ability to cherry pick the placement of targeted, exclusive ad impressions is an attractive value proposition for ad buyers as it improves campaign effectiveness and strengthens agency relations with brand advertisers. Since just 2009, ad agencies have quickly adapted to the RTB process. More and more, ad buyers are realizing improvements in online display ad campaigns when they are purchased in automated, real-time markets. As even more ad buyers become comfortable with RTB for online display ads, they will apply these ad buying systems to online video, mobile, and social media.

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Better yield management and increased CPMs will encourage publishers to allocate more remnant and premium online inventory to the RTB ad market. Publishers also look to monetize ad inventory via SSPs and ad exchanges as a way to reduce the sharing of revenue with ad networks. However, they must balance employing RTB ad sales strategies with protecting their own direct sales divisions.

The next frontier is extending sell-side RTB services to online video, mobile, and social media markets. Facebook’s newly launched ad exchange is a driving force through 2017 as the social network serves approximately one-third of U.S. display ad impressions. The Facebook Exchange opens up a large source of display ad inventory to the RTB market. Several other firms are set to capitalize on this burgeoning market as well. Major online video advertising firm, SpotXchange launched an online video RTB solution in 2010 and Nexage, a leading mobile ad exchange, offers RTB technology for mobile buy-side and sell-side platforms. In early 2012, Google expanded its RTB footing with the integration of AdMob’s mobile ad inventory with the Doubleclick Ad Exchange. While agency demand for cross-platform ad synergies drives the development and adoption of RTB sell-side platforms for emerging media, Parks Associates predicts these markets will remain small, with growth contingent on the maturation of the online display RTB ad market.

Market Implications & Recommendations 40 parksassociates.com Despite the advantages of RTB, industry stakeholders will face obstacles in pursuit of market expansion.

New media consumption, multi-device adoption, and ad technology advancements produce complex business environments. Their markets are difficult to comprehend and navigate. Agency executives consistently struggle to understand the inner workings of new forms of digital media and their impact on media campaigns. The lack of understanding creates uncertainty, and often breeds distrust, among ad buyer communities, which results in the reluctance to experiment with emerging advertising platforms. A major fear among the demand-side and sell-side players is that automated media buying technology and processes will replace human touches. The people versus the machine concern may slow RTB ad inventory from entering the marketplace as well as the redistribution of media budgets from traditional online display to RTB ad markets. While agencies argue RTB technology will not replace ad planners and buyers because of deep rooted personal and network connections, history shows that machines will at the least shift many responsibilities of today’s employees. Many RTB-enabled systems require only one or two employees to do work typically performed by 20 people. These cost efficiencies may incent agencies to reduce head count in favor of adopting automated ad buying/planning technology infrastructures.

Until recently, some online publishers were leery of RTB technology platforms based on the belief that RTB sell services (e.g., SSPs and ad exchanges) potentially damage direct sales efforts. Some publishers fear the automated RTB process devalues ad inventory and degrades content owner and/or publisher brand equity. On the other hand, many publishers are growing more comfortable with RTB ad exchange methods and are placing more unsold and premium ad inventory into RTB systems to capture larger market shares. Based on Parks Associates’ interviews, it is unlikely that RTB will compromise internal sales units. Executives predict that remnant ad impressions will continue to be sold via RTB (via indirect relationships with buyers), but maintain that the bulk of direct, premium ad inventory will be sold by direct sales teams. The bottom line is that RTB supplements publisher ad revenues and these third-party ad seller relationships are essential, as even the most successful publishers are unable to sell out all ad inventories at any given time.

Campaign effectiveness is directly tied to how, when, and where an ad is viewed by consumers. More than ever, agencies have to deal with the issue of ad viewability and its impact on campaign effectiveness. Ad agencies struggle to verify viewable ad impressions as well as the length of time the ad remained in the consumer’s view. For instance, some online display ads are served below the fold (i.e., shown at the bottom of the computer screen) and users are unable to see the ad without scrolling down the webpage. In these

Market Implications & Recommendations 41 parksassociates.com instances, an agency still pays full price for the ad(s). Consequently, agencies usually place restrictions on

below the fold ad placement to eliminate wasteful ad spending. Such challenges still exist for RTB-based ad buying and selling processes. The need for quality control of RTB placements increases due to automation. DoubleVerify launched a product, AdView in May 2012 to address this industry challenge.47

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Ad Agencies

Educate your personnel in the nuances of emerging ad platforms and technologies in order to benefit from advanced advertising technology and prove agency value for major brands. The alternative to investing in this education is vulnerability to agencies that do understand the platforms and technologies.

Educate clients about the value of RTB, experiment with new media and technologies, and adapt their business models accordingly. This helps keep both the agency and its clients on the high performance edge of possibilities.

Work closely with ad monitoring and verification solution providers, such as DoubleVerify or adsafe, to ensure RTB campaign accountability. Going forward, the pressure from the agency client side to hold agencies accountable for every single ad impression purchased will intensify. Over-charging and over- counting of ad impressions, or worse, mismanagement of client’s media funds will result in lost contracts and even termination of business relationships.

Guarantee appropriate brand exposure and offer accountability for every ad impressions bought and served to gain new clients. All these tasks require agencies to make informed buying decisions, therefore partnerships with ad monitoring and verification solution providers are critical to agency’s future success.

Publishers

Explore private ad exchange opportunities but at the same time maintain adequate ad inventory to meet agency demand via direct sales channels or third-party ad networks/exchanges. Private ad exchanges are an attractive option for publishers seeking to eliminate sales channel conflicts but for the near future will

AdView is a technology that monitors and verifies the viewability of an ad impression to preserve brand exposure and improve ad viewability

According to the IAB and Making Measurement Make Sense (3MS) guidelines, an ad is considered viewed when at least 50% of the ad is displayed on a user’s browser window for at least one second.

Market Implications & Recommendations 42 parksassociates.com private exchanges, publishers must keep strategic partnerships with third-party ad exchanges and SSPs

intact to maximize ad sales – leveraging all available ad sales channels to fill 100% of ad inventory, 100% of the time.

Ad Networks

Redefine business roles and overall functionality within online display advertising by adding RTB

technology components to embrace market evolution. Integrating RTB services for both the buy-side and sell-side enables ad networks to better promote current service offerings and enhance product value for ad agency and publisher partners. Ad networks that continue to rely on old business models and technologies will find themselves displaced by RTB ad platforms.

Resource Book A-43 parksassociates.com

RESOURCE BOOK

Appendix A Company Profiles: Media buying desks

MEDIA BUYING DESKS

Ad Agency Product & Description Platform Integration

Xaxis: Proprietary audience buying

technology platform used by WPP’s GroupM agency partners, Maxus, MEC, MediaCom, and Mindshare

Universal and media agnostic

Company Notes

 Founded in 2011

 Digital audience buying platform for online display, online video, mobile and social  Broad portfolio of audience buying capabilities that have been independently

developed and optimized in various parts of GroupM and WPP Digital including B3, targ.ad, GoldNetwork, GroupM DSP, and the GroupM Marketplace

 Executed 4,000+

campaigns for 700+ clients in 13 markets around the world including North America, UK, Europe, and Australia

 Received Most Compliant Platform Award by DoubleVerify

Accuen: Digital media acquisition

platform that combines media, data, technology, and strategy to buy targeted audiences

 Social media platform, BLiNQ Media

 AOL’s AdLearn Open Platform (AOP)  TubeMogul, online

video ad network

Company Notes

 Founded in 2009

 Agencies within Omnicom Group are not required to use Accuen; however, it is strongly preferred.

Audience on Demand (AOD): Centralized online

display audience

management marketplace and systems integrator, which includes bid management technology and data partnerships. AOD is used by Publicis Groupe’s VivaKi agencies - Starcom MediaVest Group, ZenithOptimedia,

Razorfish, and Digitas.

 Google Doubleclick ad serving and ad exchange

 AdMob for in-app mobile advertising

Company Notes

 Founded in 2008

 Live in nine countries including the U.S., U.K., China, Spain, Sweden, Australia, France, Netherlands and Germany

 78+

billion ad impressions served on 13,500+ campaigns on behalf of 300 advertisers

 Received Best in Audience Targeting Award by TARGUSinfo  Received Most Compliant Platform Award by DoubleVerify

Resource Book A-44 parksassociates.com

Ad Agency Product & Description Platform Integration

Cadreon: Media buying desk

with three core service areas - Audience Discovery, Audience Acquisition, and Audience Verification

 AOL’s AdLearn Open Platform (AOP)  Visible World – advanced TV ad technology platform Company Notes  Founded in 2009

 Mediabrands Audience Platform is a standalone business unit within the IPG Mediabrands family, which includes the digital practices of Reprise Media, Cadreon, Ansible Mobile, and Spring Creek Group

 Operates from 6 different cities over 4 different countries  50+

billion ad impressions served

 Received Most Compliant Platform Award by DoubleVerify

Audience Optics™: Independent media buying and optimization platform that

integrates strategy, technology, and execution to help agencies in exchange-traded media and audience targeting. Platform combines the capabilities of a demand side platform (DSP) and a data management platform (DMP)

Company Notes  Founded in 2010

 Delivered its 3,000th fully-managed media campaign in Q4 2011

Audience Investment Management (AIM):

Proprietary real-time bidding for display, video and mobile advertising with data management, custom audience targeting and proprietary modeling solutions

adap.tv, adBrite, AdMeld, Google DoubleClick, AppNexus, OpenX, Nexage, Right Media, Yahoo!, RMX, Rubicon and Improve Digital

Company Notes

 Founded in 2009

 Independent advertising technology funded by Groupo ISP (Barcelona, Spain)  Offices in the U.S., U.K., Spain, Netherlands, Mexico, and Brazil

 In 2010, received the DPAC Award for Best Targeting Technology  In 2011, recognized for Most Effective Online Campaign by Institute of

Practitioners in Advertising (IPA) London

Resource Book B-45 parksassociates.com Appendix B Company Profiles: Demand-side Platforms (DSPs)

DEMAND-SIDE PLATFORMS (DSPS)

Company Product & Description Platform Integration

AppNexus technology designed to power both

buy- and supply-side platforms

Microsoft Advertising Exchange, Google Ad Exchange, Rubicon Project, OpenX, Admeld, Pubmatic, BrightRoll Exchange (BRX)

Company Notes

 Founded in 2007  RTB launch in 2010

 Only ad server built specifically for the real-time advertising business

 In 2010, announced integration with BrightRoll Exchange to offer RTB for online video

DX3: Digital marketing management platform

providing campaign management, audience management, attribution management, cross channel media buying, targeting, and advanced reporting  DX Mobile DX Brand  DX Video  DX Social Wide-range of inventory, technology, and service provider partners

Company Notes

 Founded in 2007  RTB launch in 2009

 Recently acquired Mexad, a leading European demand-side platform service provider with local digital marketing expertise in Germany, UK, Spain, France, Italy and Brazil  Received Most Compliant Platform Award by DoubleVerify

Bid Manager: Self-service, universal real-time

bidding buying platform for online display media

Integrates across every ad exchange and online aggregator including DoubleClick, Yahoo, Google, AdBrite, Microsoft and Right Media

Company Notes

 Founded in 2007  RTB launch in 2010

 Acquired by Google in June 2010; part of the DoubleClick division  Received Most Compliant Platform Award by DoubleVerify

TerminalOne: Industry’s first DSP providing full

service solution for media buying, data management, and analytics

Wide-range of inventory, technology, and service provider partners

Company Notes

 Founded in 2007  RTB launch in 2010

 Offices in New York, Chicago, Boston, Los Angeles, London, San Francisco Signed a joint-venture agreement with Publicis Groupe to provide services for Switzerland, Germany and Austria ad markets

Resource Book B-46 parksassociates.com

Company Product & Description Platform Integration

The DESK: Integrated buying suite enabling marketers to buy all types of online media

from a single platform

The ADSERVER: Stand-alone tracking and reporting platform providing a holistic view of

the purchase funnel, all the way from impression, to click, to conversion.

Company Notes  Founded in 2009 _{ RTB launch in 2010}

 Turn Media: Manages budgets, audience segments, context-targeting strategies, and frequency caps across all channels from a single application.

 Turn Audience: Targeted data management platform (DMP) that connects with leading DSPs  Cross Channel: Creates audience segments

across video, online display, and mobile

 Wide-range of inventory, technology, and service provider partners  Integrated with AT&T

AdWorks

Company Notes

 Company founded in 2004  RTB launched in 2009

 Available in North America, South America, Latin America, and Europe

Origin Digital Marketing Hub

 Origin Media DSP: Utilizes targeting and analytic capabilities provided by Patented Decision Engine (POE) to expand and optimize audience segments

 Origin Data Management Platform (DMP): Enterprise DMP integrated with POEdecision engine; executes complex logic and export instructions to multiple digital channels, including ad servers, content management servers, chat systems, email systems, and DSPs to coordinate target messages and restrictions in real time

 Origin Analytics

Wide-range of inventory, technology, and service provider partners including Atlas, BlueKai, Eveonline, CCP Games, Delta.com

Company Notes  Founded in 1999 _{ RTB launch in 2010}

Full Service: Full CRM data integration, strategy

development, Boolean retargeting, trafficking, management, reporting, and optimization services tailored to campaign goals

Self Service: Access to entire platform including

DMP to reporting suite

Data Management and Analysis: Custom solutions

including CRM-DMP integration services,

proprietary treatment & control testing, and server- side cookie stores for mapping audience and 3rd party data

Google, Rubicon, Admeld, OpenX, AppNexus, AdBrite, PubMatic

Resource Book B-47 parksassociates.com

DEMAND-SIDE PLATFORMS (DSPS)

Company Product & Description Platform Integration

Company Notes

 Founded in 2005  RTB launch in 2009

 One of the first bidders integrated into the Google Ad Exchange in 2009  Over 10 billion ad impressions managed daily

Resource Book C-48 parksassociates.com Appendix C Company Profiles: Data Management Platforms (DMPs)

DATA MANAGEMENT PLATFORMS (DMPS)

Company Product & Description Notable Industry Alliances

 Contextual Data  Brand Protection Data  Audience Interest Data

eBay, Admeld, TubeMogul, AppNexus, Bizo, Dedicated Media, adBrite, Pubmatic

Company Notes Launched in 2006

BlueKai Data Management Platform:Open platform for publishers, marketing organizations, and ad agencies to evaluate private 1st party data, create audience segmentation, and reach target audiences.

BlueKai Data Exchange: Enables partners to buy and

own data to boost ad targeting across media. Publishers can also participate as data sellers to increase revenue.

24/7 Real Media, adBrite, Adap.tv, BrightRoll, Collective, DataXu, Dedicated Media, FreeWheel, Fox Digital Media, Interclick, Insight Express, MediaMath, Meebo, Omnicom, Tremor Video, TubeMogul, YuMe, Expedia, Forbes

Company Notes Launched in December 2007

maX

Adaptive Audience Intelligence: Data collection,

analysis and optimization methodologies; recognizes the characteristics of best performers and builds a robust model of targets and updates attributes in real time

DataLinX Platform: Enables publishers and data

owners to manage access to data through a system of configurable “plugs” and helps reduce the website impact of pixels by monitoring site latency and leveraging pixel-free integrations

Premium Data: Premium online behavioral and

purchase intent data verified by comScore

Adap.tv, BrightRoll, AppNexus, Google Display network, Collective, Interclick,

MediaMath, PubMatic, Turn, Videology, Invite Media, Alliant, Bizo, Nielsen, Forbes, Acxiom

Company Notes  Launched in 2007

 Offline and custom modeled data sets across 350 million online consumers worldwide

Crowd Control: Allows clients to organize and evaluate

target audiences to monetize data and find the right audience for online marketing campaigns.

Alliant, Acxiom, Bizo, TARGUSinfo, BrightTag, LiveRail, AppNexus, adBrite, Adap.tv, Audience Science, Interclick, Xaxis, Videology, Turn

Company Notes Launched in 2008

Adobe Audience Manager (formerly Demdex):

Enterprise-level technology that manages advertising data to action multisource visitor profiles into complex

Acxiom, Bizo, datalogix, eXelate, TARGUSinfo

Resource Book C-49 parksassociates.com

DATA MANAGEMENT PLATFORMS (DMPS)

Company Product & Description Notable Industry Alliances

multi-partner advertising distribution

Company Notes  Demdex launched in 2009 _{ Adobe acquired Demdex in 2011}

Ad Advisor, OnDemand Insight: On-Demand Identification, On-Demand Verification, On-Demand Scoring, On-Demand Location

Dealix, Leads360, LeadPoint

Resource Book D-50 parksassociates.com

SUPPLY-SIDE PLATFORMS (SSPS)

Company Product & Description Clients

PubMatic’s Ad Auction Engine: Real-time media-

selling platform

The Huffington Post, eBay, United Online

MSNBC, TV Guide

Company Notes

 Founded in 2006  RTB launch in 2009

 Offices in the US, Europe, and Asia  Purchased MobiPrimo in March 2012

Platform access to Demand Side Platforms (DSPs), agency trading desk, and ad networks

Offers real-time analytics

The Weather Channel, NBC Universal, Answers.com FOX News, IDG TechNetwork Discovery

Company Notes

 Founded in 2007  RTB launch in 2009

 Headquarter in New York City with offices in San Francisco, London, Berlin, and Toronto

 Acquired by Google in 2011

 First supply side platform to introduce the private exchange and integrate mobile support

For sellers: Inventory sold to external demand sources at real-time in auctions held on

Right Media's exchange. External supply sources can make inventory available on a single impression basis

For buyers: Inventory purchased from external supply sources on a single impression

basis using Right Media's prediction algorithm. External buyers can use their own bid valuation technology to decide whether to bid on the impression placing their bid into an auction.

Company Notes Founded in 2006

RTB launch in 2012

AppNexus technology is designed to power both buy- and sell-side business models and works with top-tier data and technology partners including ad networks and demand-side platforms

Microsoft Advertising Exchange, Google Ad Exchange, Rubicon Project, OpenX, Admeld, Pubmatic, BrightRoll Exchange (BRX)

Company Notes

Founded in 2007

RTB launch in 2010

Only ad server built specifically for the real-time advertising business

REVV: Real time trading platform for publishers ABC, Forbes, NBC Universal Time Inc., The Tribune Company

Company Notes

 Founded in 2007  RTB launch in 2010

 Headquarter in LA, with offices in New York, Seattle, London, Paris, Hamburg and

In document INDUSTRY REPORT. Real-time Bidding: The Online Ad Exchange (Page 40-54)