STATE OF VIDEOMobile and Connected Devices

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Agenda• SpotX – Who are we?• What is affecting the video supply side?• How is the buy side adapting/evolving?• Challenges in Video Advertising?

• Holistic video monetization platform for publishers

• Founded in 2007, 350+ employees globally• First to market with video RTB in 2010• Majority stake investment from RTL Group

in 2014• Integrated with 60+ DSPs via OpenRTB –

38 are Deal ID compliant

Powering 600+ Publishers

7+ billion ad decisions per day

Reaching 600+ million unique users every month

Serving impressions in 190+ countries

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2011 2012 2013 2014 20150:00

1:12

2:24

3:36

4:48

6:00

DigitalTVRadioPrintHr

s : m

ins

Average Time Spent per Day with Major Media by US Adults

*Source: eMarketer & Pacific Crest, MediaPost

Supply Landscape is Shifting As Consumers Spend More Time With Digital

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In 2015, 4.9 million households that once paid for TV services no longer do, a jump of 10.9% over the last year

*Source: eMarketer & Pacific Crest

People are Cutting Ties (and Cords) with Cable TV Providers

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Shifting Audiences – Time SpentTo compare time spent - normalized Nielsen Total Audience Report across 4 media channels into Cumulative Engagement Hours:• Live + DVR Time shifted• Multimedia Devices (Roku, Apple TV etc)• Video on a PC• Video on a Smartphone

Sources: Nielsen, Total Audience Report, Q1 & Q, 2016

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Shifting Audience - DemographicsWhile shifts may seem significant (e.g. 745mil monthly TV engagement hours among the under -25 population) TV still represents 7.2 billion monthly engagement hours among this population

Sources: Nielsen, Total Audience Report, Q1 & Q, 2016

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CTV is Increasingly MainstreamConnected TV adoption has been steadily on the rise driven by the widespread availability of web-enabled televisions and a generation of inexpensive plug-in and set-top extensions

By 2018 over 75% of US households will have a Connected TV

Percentage of households with connected devices

55% gaming console 26% connected TV31% multi-media device

*Source: eMarketer, IAB and Digiday

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Mobile & CTV Opportunity

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How is the buy side evolving?

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Digital Ad Spend to Surpass TV in 2017• Total digital ad

spending will increase 15.4% in 2016

• Mobile ad spending will grow 38.0% to $43.60 bil

• Mobile represents 63.4% of total digital ad spending in the US this year.

Source: eMarketer Marhc 2016

2015 2016 2020

Non-pro-grammaticPro-gram-matic

12Source: MAGNA GLOBAL

The global programmatic market penetration will grow from 35% in 2015, to 57% in 2020

2015 2016 2020

Non-Pro-grammaticPro-gram-matic

2727

31

15

42

19

65% 59%43%

35% 41%57%

Global Programmatic Penetration (%)Global Programmatic Spend ($bn)

Growth of Programmatic

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Why Private Marketplaces?Buyers• Increased transparency

and control• Reduced risk• Access to relevant &

targeted audience

Sellers/Publishers• Handpick which buyers can

access the private exchange = control and exclusivity

• Higher priced campaigns, increased fill

• Power to leverage audience data (e.g. 1st party) to enhance inventory value and increase CPMs

At SpotX - Q4 2015 to Q3 2016, PMP campaigns grew

from 38% to 49%

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Curated Marketplaces• Source and aggregate

premium supply into inventory packages

• More efficient with with Deal ID across multiple publishers

• Pubs have complete control against pricing, targeting, and segmenting

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Curated Marketplaces• High participation from

buyers – billing & targeting efficiencies

• Pre-filters premium supply packages to buyers (Highly Viewable, Vertical, Audience etc)

• Publishers able to command CPMs 2X greater on Curated Marketplaces than OMP

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Challenges in Video?

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Challenges facing VideoDeath of Flash• Browsers will stop supporting flash• Majority of OMP creative still flash basedSlow adoption of VPAID 2.0 standard• Popular given ability to support interactivity, viewability & fraud detection

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Challenges facing VideoAd Blocking• Growing adoption & Revenue Impact• Publisher Solutions (SSAI, Blocking Content)Standardization• Some environments don’t support cookies & Device ID• SpotX initiative to standardize Bundle ID & Device Type across Connected TVs

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Summary• Supply continues to skew toward digital environments -

most notably mobile & multimedia devices• The buy side is catching up with digital ad spend surpassing

TV in 2017 & digital video predicted to see significant growth

• Industry changes (i.e. death of flash, standardization) favorable to promote advertising revenue growth across mobile & CTV environments

Questions?