Gemius Digital Beyond Borders 2015: How to Equip For The Successful Use of

Programmatic Marketing Kiev, 06/17/2015

Confidential | 2

Agenda

• Who is DataXu?

• Introduction to Programmatic Marketing

• Programmatic Industry

• How it Works

• Programmatic Adoption

• Success Stories

• 5 Factors of Success

• Q&A

Who is DataXu?

Confidential | 4

Leaders in Industry Innovation

Successful

#1 Fastest Growing

Advertising & Marketing

Company

Scientific

Data Science born

out of MIT and Used

by NASA

Seasoned

Founding team

still at the helm

“DataXu is the number

one offering in market”

Innovative

Operating in 50

countries

Global

Born as a software

company, not an ad

network

Aligned

Lighting the Way to Marketing ROI

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“Strongest Current Offering”

“By trying to solve marketer challenges that go

beyond digital media buying, DataXu has set

itself apart as a more complete solution for

marketers… [DataXu] has the most unique

tool for helping marketers plan offline and

online investments at the most granular level.”

-Forrester Research Inc

The Forrester Wave™: Demand-Side Platforms

(DSPs) Q2 2015

The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester

Wave™ are trademarks of Forrester Research, Inc. The Forrester Wave™ is a graphical

representation of Forrester's call on a market and is plotted using a detailed spreadsheet with

exposed scores, weightings, and comments. Forrester does not endorse any vendor, product, or

service depicted in the Forrester Wave. Information is based on best available resources.

Opinions reflect judgment at the time and are subject to change.

Introduction to Programmatic Marketing

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An automated marketing approach

that uses data, analytics, and real-time software

to deliver the most relevant message

to the right person

in the right context

for optimal return on investment.

Definition: Programmatic Marketing

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The Digital Lifestyle launched the age of the consumer

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Consumer behavior has gone “digital.”

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Juggling connected devices is the norm.

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Changes in Consumer Behavior:

Who is the Omni-channel consumer?

Sports

Sports

Morning Afternoon Evening

41% of device switching comes from users trying to

continue the same task.*

… but marketers lose track of the consumer when they switch devices

*Source: Facebook Programmatic IO Conference

The average person has 4 devices

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What Marketers Want

Conversion Path

in Real Time

See multi-device

conversion

and path analysis

Improved

Efficiency

Deduplication

of Channels

Link TV

Campaigns

Bridge

digital and TV

campaign data

Message

Control

Sequence

messages across

devices

Accurate

Frequency

Unified counting

across all

devices

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Channel-Centric Planning is Inefficient

Goals: Last-Click CPA

Vendor/Publisher: The Trade

Desk, AdRoll, Criteo, GDN

Goals: Brand Lift, Completed

Views

Vendor/Publisher : TubeMogul,

AdapTV

Goals: CTR

Vendor/Publisher :

Millenial, Fiksu

Siloed Channels make it difficult to switch budgets, optimize, and report

Goals: GRPs

Vendor/Publisher: MSO

100%

TV

10% 60%

Display

30%

Video

Mobile

TV Budget Digital Budget

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“People-centric” puts faces over places.

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Real-time Customer Engagement Today

Customer-Centric Messages across all formats & devices is essential

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Introduction to Programmatic Marketing

Demystifying Programmatic Marketing

Programmatic Industry

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The Ad-Technology Value Chain Ad Inventory

Sources

Demand Side

Platforms (DSP)

Holding

Company

Agency

Trading Desk

Data Providers

Ad Verification Technologies

Premium

Publishers

Ad Networks

Ad Exchanges

Supply Side

Platforms (SSP)

Agency

Agency Brand Customer

Advertiser

More:

1) Lumscape (“The Original”)

2) EU Ecosystem

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Ad Networks vs. Exchange vs. DSP

• Typically purchase inventory in blocks, at fixed

prices, not at an impression level

• Arbitrage inventory – buying low from publishers

and selling high to advertisers

• May purchase low-cost inventory on

exchanges and mark up by as much as 40%

• No impression-level decisioning

• No cost transparency

• Open marketplace that services buyers and

sellers in a bidding environment

• Can integrate with a DSP to layer 3rd party data

• Exchanges make up one part of several inventory

sources accessible via DSPs

• Charge a transaction fee for each impression

• Software platform used to access Inventory

Sources, Data Partners, and allow for

optimization, bidding, and reporting in real-time,

hundreds of thousands of times per second

• Decision algorithms allow campaigns to "learn"

and optimize

• Charge software licensing fees, either based on

usage or percent of spend

• Can provide completely transparent costs

and impression-level decisioning

Ad Exchange

• “Yield Manages” unsold direct inventory at lower

CPMs than direct

• Can send impression to an Ad Network

• Can send the impression to the “Exchange” for

bidding or private deals through real time bidding

(RTB)

• Optimization algorithms are applied to maximize

publisher benefit

• Charge a transaction fee for each impression

Ad Network

Sell Side Platform (SSP) Demand Side Platform (DSP)

How it Works

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The Programmatic Difference Traditional Execution • Plan and revise quarterly

• Buy blocks of impressions

• Fixed price dynamics

• “Averaged” audience insights

• Static

• Faith & Opacity

Programmatic Execution • Execute and optimize in real time

• Buy individual impressions

• Dynamic pricing efficiencies

• 1:1 consumer insights

• Dynamic

• Science and Transparency

$

$$

$$$

$$$

Advertisers Buyers Sellers Publishers

Consumer attention is a biddable asset.

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Real Time Bidding: How it Works

Denys & Yulia

go to olx.ua on

their devices

Request

ad from

publisher

ad server

Redirect

to ad

exchange

Send to

real-time

bidders • DataXu

• Bidder 1

• Bidder 2

Winner

(DataXu)

serves ad

Each

person sees

a unique ad

Yulia sees a L’Oréal ad

Denys sees a Kia ad Denys

Yulia

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Classic planning is based on fixed values

- Volume-time-booking

Budget Impressions Clicks

Real-Time-Advertsing is dynamic and only has the budget as fixed value

- Budget-(time)-booking

Conclusion: Real-Time-Advertising optimizes towards maximum ROI.

Important: Additional adserving costs (due to overdelivery) need to be taken into consideration.

ToDo: Mediaplans need to adapt to dynamic models.

dCPM/IMPS eCPC/Clicks

Budget

Traditional Planning vs. Programmatic

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Runtime in days

CPM in €

60% 50%

Network‘s effective CPM

Client‘s fix CPM Client‘s max. CPM

Effective CPM incl. DSP fee

Buying advantage

Runtime in days

CPM in €

Traditional Planning Programmatic Planning

Traditional Planning vs. Programmatic

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How Does The DSP Select The Ad?

Determine a brand’s unique attributes and

appeal in real-time, then optimizes a precise

match for every impression

Standard & Custom Variables

1. Excel in thin data environments to

maximize reach of decisioning models

2. Use champion-challenger system to

continuously improve performance

3. Out-of-the-box algorithm variations tuned

for specific use cases

• Concept

• Unit size

• Media type

• …

C R E AT I V E

C O N S U M E R

• Location

• Interaction with

advertiser’s site & ads

• Demographics

• Purchase intent

behavior

C O N T E X T

• Content category

• Publisher

• Exchange

• Time of day

• Day of week

• …

Why would one buy media this way?

Total price for bag of apples: $100? Price per red apple: $5 Price per green apple: $1

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• The digital media ecosystem has evolved to

enable more granular measurement

• Brands have learned that all impressions are

not created equal, even on the same website

• Paying a flat rate for large blocks of media

enables arbitrage and sell-side profit margin

• Buyers capture significant gains by evaluating

and purchasing impressions one at a time

• Transparent, impression-level decisions drive

efficiency and effectiveness for the brand

Why do brands buy media this way?

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Why would one sell media this way?

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Digital media is highly dynamic.

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• Digital media supply has rapidly outgrown

demand

• Fragmentation of consumer attention has

eroded direct sales leverage

• Digital media supply is dynamic and perishable

• Publishers are increasingly embracing

programmatic, and not just long-tail websites

• Innovative transaction models have emerged to

offer “premium programmatic” options

Why do publishers sell media this way?

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Programmatic: From Direct to Exchange

Private

Exchanges

Direct w/

Programmatic

Exchange

Media Direct Media

Guaranteed Direct

Publisher Contracts

Exchange cleared

with special

prioritization

Open Exchange

Media Buying Guaranteed Direct

Publisher Contracts

What are they?

Who can

participate?

How is it

accessed?

How is it

priced?

Who do you

pay?

Advertisers with

direct contracts

Advertisers with

direct contracts

Advertisers approved

by publisher Advertisers approved

by exchange

Via ad server tags Via ad server tags Via an exchange Via an exchange

What inventory

is typical?

Direct publisher

inventory

Direct publisher

inventory

Prioritized publisher

inventory

Exchange inventory

Fixed price.

Determined by IO

Fixed price.

Determined by IO

Auction with floor or

Fixed Price. First

look option

Auction priced

Advertiser pays

publisher for media Advertiser pays

publisher for media

and DSP tech fees

Advertiser pays

DSP for media and

any tech fees

Advertiser pays

DSP for media and

any tech fees

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Complete Media Buying Everywhere

Programmatic buying across 100% of your digital media plan.

• Chosen environment

• Chosen placements

• Audience Targeting

• Right ad

• Pre-negotiated price

• Chosen environment

• Audience targeting

• Auction Price with Minimum

• No guarantees

• Contextually relevant

• Audience Targeting

• Auction Price

• Display, mobile, social, &

video

Private

Exchange

Open

Exchange Direct

Buys

Display, mobile, & video

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Example of Inventory Partners

Display Mobile Video

Latest partner list: Who We Partner With

Programmatic Adoption

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Global Programmatic Category Spend

9 11,5 14,5

19 21 25,5 5

9,5

13,5

18

23

27,5

2013 2014 2015 2016 2017 2018

$21

$28

$36

$44

$53 S

pe

nd

(B

illio

ns)

$14

Source: Magna Global 2014, emarketer, 2014

US

Non-US

“The total programmatic market will grow from $13.6bn in 2013

to $20.8bn in 2014 and to $53.3bn by 2018 on a global basis.”

Magna Global: The Evolution of Programmatic Buying, September 2014

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Programmatic Status Quo: Global

Source: May 2014, Magna Global

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Programmatic is Scaling Rapidly: Europe

Source: May 2014, Magna Global

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1) Programmatic active in EU5 and Nordics for several years, still new in

CEE and Southern Europe

2) Agency Trading Desks start with regional hubs

3) Google Display Network and non-exchange Facebook are strongest

players

4) 1st party data critical as less 3rd party data available

5) Local 3rd party data providers expected

6) Mobile and video follow display growth quicker than in other markets as

technologies are developed

Programmatic Growth Considerations:

More: Gemius DİJİTAL HARİTALAR

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Customer Lifetime Value

Mobile Payments and Beacons

Perpetually Persistent IDs

Increasing Marketing ROI

Customized Enterprise Deployments

Programmatic Purchase of All Media

Programmatic TV

Programmatic Trends to Watch

Success Stories

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Targeting Tactics Work Together To Fuel Performance

Prospecting

Retargeting

New Leads Driven By DataXu Hand Raisers

Coming to Site

51% 46% 3%

Major Auto Brand seeking to retarget

consumers and acquire new leads

3% of users exposed to prospecting &

converted to leads right away

46% of users came to site through

prospecting & were converted to leads

over time by retargeting

51% of users came to site without

prospecting & were converted by

retargeting

Prospecting Plays a Key Role in Driving Conversions

Conversions

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Airline Client Case Study

Viewability Helps Travel Take Flight

Decrease Cost Per Booking (Purchase)

Optimize to viewable impressions in order to drive

true performance and engagement, while

maintaining reach and scale

Viewability* & Performance

47% Increase in

Viewability

36% Decrease in Cost

Per Booking

*Viewability measured by DoubleVerify

Challenge:

DataXu Solution:

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How Retail Clients Benefit From Programmatic Markting

&

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Campaign Overview

Briefing:

Prospecting

Increase online sales

Strategy:

Run of Network (RON)

Retargeting

Goal:

Reduce Cost-per-Order

„For many years we‘ve relied on DataXu’s technology and service to achieve

positive results for our clients. Especially with this campaign for a leading retailer,

DataXu exceeded both our expectations and those of the client!”

Stefan Doll, Head of Media, metapeople/metaapes GmbH

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Advanced Insights

On what day and at what time was

the creative performance the best?

What influence does the creative

format have in different regions?

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Successful results

Over several months, DataXu’s leading RTA-Technology and the experienced German

service team made this campaign a great success DataXu achieved a CPO that was 16%

under the client’s target CPO.

With the campaign, this leading German retailer saw a 26% increase in new customers.

The DataXu platform revealed deep insights into multiple campaign variables, e.g. what

creative performed best in what region or at what time.

In this case, the 468 x 60 ad size in the Nielsen regions 3a and 3b achieved the best

performance.

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How Entertainment Clients Benefit From Programmatic Marketing

&

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The Brief:

Amplify reach across

French internet users

Generate high levels

of engagement while

maintaining a low cost

per view

The Strategy:

Run of Network (RON)

Run on Sites (ROS) –

targeting audiences on

over 30 leading French

video publishers

The Goal:

Drive a high video

completion rate

„We‘ve been closely collaborating with DataXu over the past months. We‘re impressed by the

mix of performance and service DataXu offers, combined with a visionary approach regarding

omni-channel marketing. This video campaign was a great example of how DataXu helped us

to exceed our clients‘ expectations.“ –

Julien Duval, Associate Director, Labelium Inside

Campaign Overview

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Do some creatives work better in

certain regions?

How does the performance vary

during a weekday or during the

weekend?

Advanced Insights

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DataXu delievered more than 3 million Video Impressions

during the 4 week period & over 60% of users that started

the ad also completed it

92.63%84.92%

79.03%

60.37%

Watched 1/4 of Video Ad

Watched 1/2 of Video Ad

Watched 3/4 ofVideo Ad

Completed Video Ad

The Results

DataXu achieved a cost per view (CPV) of 0.01 €, which equals more than 220,000

video completions

Campaign insights can be as valuable as market research:

- High performance amongst 25-34 year olds

- Best results in the South–East of France during the evening hours on weekends

Confidential | 52

950,000

3,068,684

Competitor DataXu

DataXu achieved

an additional

2 million

Impressions

Benefits for the Client

DataXu was able to reduce the client‘s CPM rate by a third compared to

other providers:

Achieved more than 60,000 € budget savings or an additional 2 million Ad

Impressions for the same media budget

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Pixum Builds Brand Awareness With Digital Video

&

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Campaign Goals

Increase branded searches (rather than generic keyword

searches)

Lower overall cost-per-conversion

Generate new customers

Hypothesis

Digital video advertising will build Pixum brand awareness

The Brief

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The Methodology: Pulsing

Conduct comprehensive effectiveness

analysis

Campaign modelling based on

generated data

Run campaign across different

geographic regions

Employ different pulse (investment)

schedules

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Test the impact of video advertising on

branded search and website traffic using the

DataXu pulse method

Measure the number of page views,

searches for “Pixum”, actual software

downloads and sales

Analyse and compare regional differences

The Methodology: Pulsing

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Region 1 and 2 had similar outcomes, showing an overall growth in clicks

The video campaign led to increased search volumes, resulting in a

positive ROI from digital video advertising for Pixum

Region 1 Region 2

Region 3

The Results

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Total clicks increased as video advertising investment grew

The model shows that CPC is expected to decrease over time

-10%

-8%

-6%

-4%

-2%

0%

0 50 100 1500%

10%

20%

30%

40%

50%

0 50 100 150

Video investment (Euro/1M people in a day)

Organic

Paid

Click Volume Growth

In Region 1, organic clicks grew faster than paid

Confidential | 59

Determined optimal marketing investment

for all three test regions

Gained new customers

Detailed campaign analysis

Campaign Results

Programmatic Marketing in Practice: 5 Factors of Success

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1) Campaign Goal And Attribution Model

Source: Out with the Old

Take Aways: 1. Plan, optimize and measure

campaign success based on

actions directly tied to actions

2. Identify actions that

demonstrate significant interest

in your campaign

3. Value the View: Focus on

audiences that have a

propensity to convert

Confidential | 62

2) Data Strategy 1. Leverage 1st party data. It’s the advertiser’s data, not the media owner’s.

2. Data strategy example:

1. Learning Pixel:

1. Homepage

2. Landingpage

3. Shopping Cart/ Order Process

2. Conversion Pixel:

1. Soft Conversion

2. Final thank you page

3. Ask for learnings: How does your data influence your marketing investments?

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CONVERSION AWARENESS CONSIDERATION | |

Prospecting

Retargeting

OMNI-CHANNEL TARGET

AUDIENCE

Geofencing

3rd Party Audience Targeting

Contextual & Site Targeting

3) Enhance Performance At All Points During the Sales Funnel

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Geo

Targeting Retargeting

Device

Targeting

Prospect ing/

Look-a- l ike

Modeling

Audience

Buying

Contextual

Targeting

4) Optimization: Algorithm Marketplace

Algorithm Variations tuned

for specific use cases

Model & Predict behaviors to

reach more customers

Test and Learn to continuously

improve performance

Confidential | 65

5) Brand Safety BRAND SAFETY

LEVEL 4

$$$$

CLIENT

LIST

CLIENT SPECIFIED SITE LIST

LEVEL 3 DYNAMIC

SEMANTIC

WHITELIST $$$

DOES NOT ALLOW

UNCATEGORIZED,

ANONYMOUS, OR IAB

“NON-STANDARD”

INVENTORY.

LEVEL 2

DYNAMIC

SEMANTIC BLACKLIST

$$

REMOVES CONTENT

IN IAB

“NON-STANDARD”

CATEGORIES.

ALLOWS

ANONYMOUS

INVENTORY.

LEVEL 1

$

AD EXCHANGE FILTERS

BASIC BRAND

SAFETY

PROVIDED BY

EXCHANGES

BLOCKS MOST

OBJECTIONABLE

CONTENT

INCREASING BRAND

SAFETY

DECREASES REACH

AND INCREASES COST

OF MEDIA

Suspicious

Clicks

Quality

Scoring

Malware and

Virus Scans

Confidential | 66

• Guaranteed 97% fraud-free “real people” investment

• If you experience a fraud rate greater than 3%, DataXu will:

– Refund 100% of the DataXu fees associated with the fraudulent media >3%

– Refund 100% of all amounts recovered from the suppliers of that media

5) Ad Fraud Protection

World-Wide Omni-

Channel

Free No action

required

ДЯКУЮ Jost Löhnenbach

Head of Sales, New and Emerging Markets - Europe

jloehnenbach@dataxu.com

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