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Online advertising 101
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Online Display Ecosystem
A detailed introduction to the online advertising display space... Banner ads 101
AgendaIntroduction (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
AdvertiserAd Side
Ad Server Pub Side
Ad Server Publisher
Ebay Atlas DoubleClickFor Publishers HuffPo
HuffPo wins an RFP from EBay
EBay signs an IO from Huffpo
How Remnant Ads Work (Ad)
Ad SideAd Server Publisher
Atlas HuffPo
Best Buy wants to target tech geeks
in urban areas
Best Buy Signs with
AppnexusAd.com
Google Display more...
Buying Channels /
Data
Ad.comAdX
Appnexus+BlueKai
Optimization /Verification
DapperDoubleVerify
Advertiser
Best Buy
How Remnant Ads Work (Pub)
Pub SideAd Server Publisher
DoubleClickFor Publishers HuffPo
Huffpo is not sold out... some of the
ads need to be filled...
Huffpo SignsPubMatic (RTB)
Ad.com AdSensemore...
Sell Side Platform
PubMatic
DSP /Ad Net
Appnexus
Advertiser
Best Buy
The Online Ecosystemin Detail
20 Categories, 100’s of companies & billions of dollars...
Taking Sides
AdvertiserAgencies | 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
AdvertisersAgencies | 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 IO’s 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 RFP’s, price inventory, attribute conversions
Agency Trading DesksWith 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 DSP’s 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 RFP’s buying inventory, managing 100-1000’s of IO’s, 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 2000’s - 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 PlatformsSupply Side Platforms are focused on helping the publisher to maximize CPM’s 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 100-1000’s of IO’s, 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
ExchangesExchanges 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 ModelsRevshare | CPM | CPA | Flat Fee | Fee + Usage |
Cost of Media
Business ModelsRevshare - Ad Networks & SSP’s
CPM* - AdServers & Exchanges
Flat Fee* - Analytics & Publisher Tools
Flat Fee + CPM* - Data Aggregators
Cost of Media - DSP’s & Creative Opt.
CPA - Advertisers buy this way
*May have setup fees and/or monthly minimums
CPM Estimates
Direct CPM’s for Display$5-100+ CPM’s depending on the publisherOften included as part of ‘sponsorships’
Remnant CPM’s $.10 - $10 CPM’s to advertisersRevshare 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