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A Programmatic Primer: Introduction to the World of Advertising Technology

Matt Prohaska CEO & PRINCIPAL

February 15, 2017

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Who Is Prohaska Consulting?

• “Solving Digital Complexity”• Advise Publishers, Ad Tech, Investors,

Industry Groups, Agencies, Brands• Display, Mobile, Video, Search, Social,

Email, Native, Radio, TV/Video, OOH/DPB, IoT

• Team of 90+ experts globally• NA, EMEA, LATAM, & APAC• Expertise includes Sales, Ops, Marketing,

Strategy, Research, Biz Dev, Analytics, Product, Tech Dev

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Before We Get Started, Anyone Feel Like This?

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Why AdTech Is So Important?

Current Focus

For Both Buyers & Sellers

Previous Focus

Efficiency+

TargetingLower CPMs

Speed

Efficiency

Lower CPMs

Speed

Targeting

Quality

The definition of efficiency changes from lower cost to

eliminating waste by paying the right price for each impression

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Defining Programmatic Advertising

• Programmatic is an automated, technology driven, data informed method of buying, selling, & fulfilling advertising

• Replaces the traditional use of manual RFPs, negotiations, & insertion orders to purchase digital media

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200 MILLISECONDS: THE LIFE OF A PROGRAMMATIC RTB AD IMPRESSIONReal-Time Bidding (RTB) Explained

“Jane Doe” clicks on URL. Publisher content begins to load.

Publisher may find information it has stored on Jane Doe, possibly in its DMP.

Publisher sends available info to its ad server asking if an ad campaign is available to target Jane Doe. If so, an ad is served.

If no campaign targets Jane Doe, the server seeks to match the impression programmatically, seeking response from selected traders, ad networks and SSPs.

If impression isn’t cleared, server may seek to clear it in programmatic direct via private exchanges. If not cleared, request is sent to an open ad exchange, seeking liquidity.

If impression isn’t cleared, server may seek to clear it in programmatic direct via private exchanges. If not cleared, request is sent to an open ad exchange, seeking liquidity.Source: Mediacrossing

Each bidder processes bid requests, overlaying with added user data and marketers’ target and budget rules. Each bidder evaluates requests, selects creative and sends with optimal bid price to ad exchange.

Ad exchange selects winning bid from bidder responses through 2nd price auction.

Ad exchange sends winning ad URL and price from winning bid to Publisher’s ad server, which tells Jane Doe’s browser which ad to display.

Jane Doe’s browser pulls ad from winning bidder to ad server and sends matching ad to browser. Browser displays web page including matching ad.

Winning bidder’s ad server receives ad tag data on Jane Doe’s initial interaction experience.

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SHOWING THE PLUMBINGProgrammatic Buying

Social DataTools

DATA Data Suppliers DMP Data

Exchanges

Metrics

Audience Metrics

Web Analytics

Post Evaluation (Ad Effectiveness)

Affiliate NetworkSales House

Ad Network

Publisher

Ad Server

Ad Server

MediaAgency

Advertiser

AS OF TODAY ;-)Agency Trading Desk (ATD) Players by Holding Co.

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Holding Company Agency Examples Trade Desk

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Buyers Landscape - DSPs

Self Serve Platform

Programmatic Network

Managed Service Platform

• Self Service vs. Managed-Service• Holding companies reducing usage

of managed service• Significant pressure on Ad Networks• Transparency challenges

• The Ad Network Evolved• Rocket Fuel, Criteo, Xaxis,

Quantcast, Exponential• The New Holding Company?

• MediaMath → Helix (Adroit), Kepler, Huddled Masses, Big Lens

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DMP: Data Management Platform

Data Type Meaning1st Party Your audience

2nd Party Your partners’ audience

3rd Party Others’ audience

Features What it doesTag Management Used to collect data into the database

Data Classification Organizes and protects data

Segmentation and Modeling Builds segments and lookalike models to expand your pool of targetable data Example: takes your 1 MM existing targets and finds 4MM similar

Media and Data Integration Connects your data to DSPs, SSPs, Exchanges, and 3rd party data providersEnables you to merge data in from other sources

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Brand Research

Offline segmentation, Digital ad impact..

CRM Database

Transactions, Segments, products, etc…

Campaign Data

Clicks, impressions, Interactions, conversions…

Audience Data

Demographics, Web, and Search Behavior…

Segmentation

Application of Data

Audience Modeling

Analytics

Huge Variety of Data Sources

Social

Mobile

Display

Search

Online/OfflineSubscriptions

DATAMANAGEMENT

PLATFORM

Source: Xaxis A Data Management Platform

DMP: Data Management Platform

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Understanding the Publisher’s DMP

PublisherX.com Audience Extension (BT)

PublisherX.com/Autos

PublisherX.com Network Audience Extension

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Your Trading Desk

• Converting Ops teams to Inventory Buyers

• Control cookie pools, frequency, margin• Self-service or managed-service• Potential replacement for integration

between DMP & bidders• Including Marketing/House “spend”

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Understanding the Publisher’s Ad Server

User

1. Page Request

2. Page with Ad HTMLPublisher Web Server

Publisher Ad Server

3. Ad Request

4. Ad

• Little major change in 20+ years• Key to setting up inventory waterfall• Critical to integrate with rest of tech

stack• Pressure on Ad Servers coming from

Header Bidding

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SSP: Supply-Side Platform (The Exchange)

EXCHANGE

TRANSPARENCY

PERFORMANCE

BUYERS

BUYERSSELLERS

SELLERSRICH MEDIA

VIDEOMOBILE

BANNERS

AUDIENCEREAL TIME BIDDING

SAFETY

• Where the buying and selling happens

• Originally built for buyers to handle publishers’ (f.k.a.) “remnant” inventory

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Open vs. Private Marketplaces: Retail Analogy

Open Private

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SCOREBOARD OF KEY DIFFERENTIATING FACTORSHow To Decide Who To Work With

• Business Terms• Product flexibility• Multi-Channel usage• Access to unique/all supply/demand• UI – user interface• Client Service

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TV, Radio, OOH – 2nd Mover Advantage?

C

DSPs

Networks

SSPs

MVPDs

Unwired Networks

National Broadcasters

Cable Networks

View

ersA

dver

tiser

s Ad Insertion Systems

Consumer DMPs and Networks

Creative Management Platforms

Measurement/Analytics

C

Station Groups

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Plus

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Reminder: Mastering This Won’t Happen Overnight

Thank You!

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matt@prohaskaconsulting.com

Matt ProhaskaCEO & PRINCIPAL

+1 917.597.6568

@MattProhaska, @TeamProhaska