Digital Transformation Or Disruption?

Digital Transformation or Disruption?DSPs, Digital Advertising, and the Changing Role of

the Agency

Hosted By:

© 2010 DataXu, Inc. Privileged & Confidential

Agenda

• Introductions• Industry Overview• DSP Learnings & Key Requirements• RTB & Premium Inventory• Branding vs Performance • Success Stories• Q&A with panelists

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Participants

3

Mike Baker, CEO

Michael Jenkins, Sr. Communication Strategist

Steve Weeks, Sr. Manager of WW Advertising

Ben Trenda, VP of REVV Marketplace Development


Agenda

• Introductions• Industry Overview• DSP Learnings & Key Requirements

4

Mike Baker, CEO

The Evolution of Online Media Buying

Direct from Publishers

1996

Ad Networks

1998

Ad Exchanges

2005

DSPs2009


Demand Side Platforms

What is a DSP?

DSPs are media buying tools that help buyers aggregate, bid on, and optimize digital inventory across ad exchanges and yield management platforms.

Advertiser Benefits:

Improves display ROI

Reduces display cost

Generates data-driven consumer insights


The Role of a DSP

Advertiser

Ads Placements

PublisherAgency

Consumer data aggregators

Audience

Online videoexchanges

Online displayexchanges

Mobileexchanges


DSPs


Your buyers are moving targets

YESTERDAY’S CONSUMERS…

• Passive media consumers• Static in place and time• Analog and settled

YOU NEED TO…

• Go where your audiences go• Break through scale limitations• Span display, mobile, and video

TODAY’S CONSUMERS…

• Active content co-creators• Fragmented in space and time• Digital and nomadic


1st generation DSPs were a step in right direction

AUDIENCE BUYING

RETARGETING

BENEFITS:•Better ROAS•More control•More efficient•Represent buy-side interest

LIMITATIONS:•Fixed rule buying•Poor scalability of retargetingand audience buying•Cost effectiveness


AUDIENCE BUYING

RETARGETING

The biggest problem with 1st gen DSPs: SCALE

LIMITED by the number of cookies you can buy

LIMITED by the number of people who come to your site

AUDIENCE DISCOVERY

REACHES ALL CONSUMERSUse insights from your own data to scale across display, mobile and video


sd

DataXu’s Next Generation Platform

1.LEARNS FROM WHAT’S WORKING2.

BUYSMEDIA ACROSSCHANNELS AND FORMATS 4.

DECIDESWHAT CONSUMERS, CONTEXTS, CREATIVES, AND PRICE3.

MEASURES CONSUMER BEHAVIOR

Why Dynamic Decisioning Matters


Learning: Price Volatility Favors Dynamic Bidders

Results:Persistent price volatility is enabling advertisers to capture high value at low cost. Over 100% volatility --10 times higher than NASDAQ’s

Conclusion:Dynamic decision systems that adjust in real time can boost performance

Challenge:Decide, in real-time what ads to buy, adjusting to extreme price variation


Learning: Creative Optimization is Key

Challenge:Maximize campaign performance, targeting across Creative, Consumer and Context

Results:Deciding on right creative for each ad was most important on 48% of the campaigns

Yet, on a significant number of campaigns, it was either Context or Consumer

Conclusions:Best approach is to use the data, and automatically adapt

One-size-fits-all, rigid approaches are always doomed A global optimization approach balances all three domains

at once


© 2010 DataXu, Inc. Privileged & Confidential 15

Learning: Optimization offers efficiency at scale

Challenge:Optimize media buys to find the right media at the right price

Results:The cost of media for Audience Targeting is 3X more expensive than ROE• But effectiveness as measured by CPA was 2.7X

better for Optimized ROE than for Audience Targeting

Conclusions:Optimized Run-of-Exchange campaigns have a much lower cost of media• Audience Targeting leads to multiple buyers bidding for a relatively small number of

impressions• Retargeting lists are limited in size and unable to scale


Learning: Effective Campaigns are built on “Brand Genomes”

Challenge:Build a campaign that is “brand unique” instead of “industry unique”

Results:The “brand genome” campaign drove conversion rates 2-3X higher than traditional campaign strategies• Using a competitor’s genome did

little to increase conversions

Conclusions:To drive optimal campaign performance, your media strategy should be as unique as your brand


Agenda

• Introductions• Industry Overview• DSP Learnings & Key Requirements• RTB & Premium Inventory

17

Ben Trenda, VP of REVV Marketplace Development


What’s the Rubicon Project?the Rubicon Project is leading a revolution of the online advertising ecosystem through the innovation of a next-generation infrastructure and a powerful, open marketplace.

Leading Yield Optimization Platform

o Trusted by 350 Premium Publishers

- 33% of comScore 100 (U.S.)

- 88 of comScore 500 (Global)

- 12 of Top 15 Newspapers in the U.S.o REVV processes more than 60 billion ad

transactions per month (1 trillion+ to date)

o *Per Quantcast (#1 Rank)o 550M+ global uniqueso 600+ ad networks, exchanges, DSPso Non-Competitive (no advertiser access)o Transparent (not "black box")

Largest* Display Advertising Marketplace

Fastest growing advertising tech company:o Founded by ad server

pioneers in 2007− 250 employees− $60M funding− More than 1 trillion ads

served

o Key Acquisitions:- Fox Audience Network - OthersOnline: audience

affinity analytics - SiteScout: ad security

o Most Innovative Company, American Business Awards 2010


REVV & Publishersthe Rubicon Project has engineered a technology platform and marketplace to enable publishers to more effectively compete in today's highly-competitive market.

to access all demand

to yield optimize all inventory

Increased Revenueo Manage all sources of demando Yield optimize for highest revenue

− across all sources of demand, including RTB

o More effectively compete:- massive network effect vs. silo

Reduced Costso Eliminate unnecessary overhead:

trafficking, ad quality, management, reporting, billing, collections

Total Brand Protectiono Protect your user experienceo Protect direct sales pricing

ONE PLATFORM

ONE MARKETPLACE


RTB & Publishers

o Advertising revenue moving from offline to onlineo 2/3 of online display impressions sold on a non-guaranteed basiso RTB is nascent (“industry beta”): limited inventory, today small (but

fast-growing!) % of total spend

Notable drivers on the BUY side:

o 4 agency holding companies control > 50% of US ad spend Each has created a trading desk to fix the problems inherent in the

buying of digital media (duplication, opacity, quality, efficiency) Agencies working to move spend to trading desks Trading desks want to spend via RTB Trading desks limiting ad network access to this spend DSPs aggregating agency, advertiser & network demand

K E Y T R E N D S


RTB & Publishers

K E Y T R E N D S Notable drivers on the PUBLISHER side:

o It’s tough being a publisher today… Inventory volume is up, CPMs are down Advertisers want to buy audience, not just inventory 2 million active advertisers (how to reach them all!?) 2/3 inventory sold on a non-guaranteed basis (via ad networks,

exchanges, DSPs) – how to optimize all those sales channels?

o So publishers are watching the media buying landscape carefully:

Programmatic buying will be increasingly important Agency-originated non-guaranteed spending starting to become

concentrated within trading desks— can’t afford to ignore Advertisers/agencies asking for access to publisher non-guaranteed

inventory within programmatic environments


RTB & Publishers

O P P O R T U N I T I E S & R I S K S

RTB can give publishers…

o Revenue - new source of demand

o Quality - high quality brand campaigns not always

available through ad networks

o Efficiency – the right ad to the right user at the right time,

at the highest possible price

o 360° Yield Optimization – RTB within the context of total

demand access can drive overall yield

But it can take away, too…o User Experience Issueso Direct Sales Revenue/Channel Conflicto Data Leakage


Questions Publishers Ask

1. Pricingo How do I leverage RTB to protect & build my pricing (not erode it)?

2. Control:o How can I control global sales rights management on my inventory?o Who should have access to my inventory? When? Where?o How should I manage my advertiser & agency relationships?

3. Flexibility:o Is there technology that will enable me to offer priority access to

inventory (non-guaranteed) to certain partners on the fly?

4. Visibilityo What inventory should I make available for RTB? (sites, zones, ad sizes, user

sessions, etc.)o How can I get the same insight into my inventory, audience and revenue

that the buy-side has?

5. Data and Safety o Do you have the right technology and contractual controls to protect my

inventory, sales and data assets?

I N S I G H T & C H A L L E N G E S


What’s Next: RTB in 2011

o Private Marketplaces

o Preferred Price Floors

o First Look/Right of Refusal

C O N T R O L , V I S I B I L I T Y A N D F L E X I B I L I T Y

To achieve publisher goals, RTB needs to deliver both significant revenue impact alongside transparent controls that ensure publishers and critically, their advertisers, garner real ROI.


What’s Next: RTB in 2011

P r o t e c t e d R T B : I T ’ S A L L A B O U T C O N T R O L Protected RTB optimizes real-time bids for inventory alongside all sources of demand, ensuring that every impression is sold for the highest possible price, regardless of the buying mode of the sales channel, all with critical protections in place to ensure user experience, direct sales and data are protected.

These tools can be used ininnumerable ways to buildstronger and more direct,programmatic relationshipswith advertisers.


The Results To Date

publisher A

Total revenue lift before RTB

publisher A

Total revenue lift after RTB

C P M 20% CPM

INCREASERTB alone drives immediate lift (3–5x CPM) while protecting publisher revenue against channel conflict, pricing arbitrage & data leakage…

…and additional yield growth of 20% across ALL non-guaranteed inventory when Protected RTB is enabled in concert with all optimization sources


Agenda

• Introductions• Industry Overview• DSP Learnings & Key Requirements• RTB & Premium Inventory• Branding vs Performance • Success Stories

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Michael Jenkins, Sr. Communication Strategist

Steve Weeks, Sr. Manager of WW Advertising

Operating in silos: The Past

• Raise awareness

• Site direct buys focused on high target audience composition

• Premium rates

• Messaging focused on product benefits

• “Learn More”

• Sell product

• Network buys focused on increasing campaign reach

• Remnant inventory

• Messaging focused on product features

• Drive to “Try/Buy now”


“Brand” Efforts “Response” Efforts

Few opportunities to apply cross-

campaign insights in real-time

Cross-campaign interaction: The Present


Adobe.com

Interests

Actions

Purchase Process

Community

Leverage data to deliver relevant, timely messages

to in-market consumers

Brand Efforts Response Efforts

Excite, engage & entice. Grow marketable universe.

Case Study: Adobe Creative Suite 5 Launch


The Goal:

Raise awareness, pique interest and drive revenue of CS5 – all starting on Day 1 of launch.

The Strategy:

• Create a variety of unique media touch points to surround target and drive users to site in our branding efforts

• Tag Adobe.com to track interest and consideration or consumers.

• Utilize site/user data to deliver relevant messages at scale in response efforts


Brand efforts drive interest and traffic…

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Adobe.com

Interests

Actions

Purchase Process

Community

Brand Campaign

The site and it’s content, in addition to banners, are the canvas

Foster community through social enablement (not just social media)

Consider all media – not just digital – and it’s ability to drive consumers to the web

Excite, Engage & Entice

…and response efforts will capitalize on insights.


Purchase process messaging

(i.e. offers for trialists)

Matching product to sub-targets

(i.e. After Effects for video enthusiasts)

Broad, efficient media +

granular targets & messages

Leverage site data to develop relevancy

Incentivize when necessary

Deliver relevant, timely messages

Adobe.com

Interests

Actions

Purchase Process

Community

Response Campaign


CTRs averaging 0.7%; as high as 9.3%

14% of response campaign impressions utilize

remessaging

Remessaging drives 41% of response campaign trials and

59% of purchases

The Results

Adobe.com

Interests

ActionsPurchase Process

Community Response

CampaignsBrand

Campaigns


Agenda

• Introductions• Industry Overview• DSP Learnings & Key Requirements• RTB & Premium Inventory• Branding vs Performance • Success Stories• Q&A with panelists

34

• Educational Webinars (Virtual) – Mobile Campaign Measurement – Your Questions Answered

Wednesday, January 12, 2010 Noon EST

• Professional Development Classes (NYC)– IAB Classes on Professional Presentations, and the Digital

Ecosystem starting mid-January… stay tuned!

• IAB Annual Leadership Meeting – Palm Springs, California February 27 – March 1, 2011

IAB Updates: www.iab.net

Credits, Future Webinars

Earn Credits for attending IAB WebinarsIndividuals earn one (1) hour credit for each webinar attended through the IAB. For further information on the IAB Digital Advertising Certificate, please visit: www.iab.net/events_training/certificate

Member Led Seminar SubmissionsIf you are a member of the IAB, we encourage you to submit proposals for

future webinars. There is no cost to members for these sessions, and we hope they will provide a valuable forum for members to showcase their latest insights, research, and technologies.

To submit a webinar proposal, email [email protected], or visit www.iab.net/member_webinar_submission

http://www.iab.net/events_training/certificate

mailto:[email protected]

http://www.iab.net/member_webinar_submission

Q&A

• Please type your questions into the Questions tab on the right hand side of your screen

Digital Transformation Or Disruption?

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Transcript of Digital Transformation Or Disruption?