Smart Technology:Programmatic’s Promised Efficiency

History of Advertising

What isprogrammatic?

Programmatic buying is the process of buying media in an automated fashion

through digital platforms.

Programmatic /ˌprōɡrəˈmatik/ adjective

This automated, real-time bidding process replaces the traditional use of

RFPs, negotiations, and insertion orders to purchase digital media.

3 Primary Options for Buying Digital…

Publisher Direct

Ad Network

DSP

• Guarantees spot & content• Custom units & SOV

• Limited scale & targeting• Scheduled, manual buys• Dozens of IOs to manage

• Greater scale & targeting• Lower cost for inventory• ‘Exclusive’ access

• Black-box buy• Non-transparent margin

• Maximum reach & scale• Full transparency• Flexibility & decisioning

• Contract vs. IO based• Usually self-service

Upside Downside

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Workflow & Billing InefficienciesHaunt the Direct Model of Buying

Cut out workflow, setup, reporting, & billing inefficiencies associated with multiple ad

networks and publisher IOs on a plan through a holistic, omnichannel buying platform.

The power of data & decisioningacross publisher inventory

Programmatic in its simplest form is about choice.

Key Components of Programmatic Buys

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DSP

DMP

RTB Marketplace SSP

Publisher Ad Server

PublisherMeasurement & Verification

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RTB Marketplace SSP

Publisher Ad Server

PublisherMeasurement & Verification

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RTB & Auction Mechanics

Choosing the Right User with DecisioningExample CPG AdvertiserTarget: W25-54, HHI $75k+, consuming

cooking or home & family content

Auction 1CPM = $4

W45, HHI $100k

Auction 2CPM = $1M21, student

Auction 3CPM = $3

W30, HHI $50k

User 1 User 2 User 3

RTB provides a mechanism to efficiently buy targeted ads in real

time, on an impression-by-impression basis.User 1

$2.01 CPM

Myth 1:Transparency

The Association of National Advertisers voted “transparency” as 2016’s marketing word of the

year.

Market Demands

Why every digital advertiser should demand transparency?

Advertiser

Market Demands Transparency

At this year’s IAB Leadership Summit, P&G’s brand chief, Marc Pritchard laid into Google and Facebook’s ‘walled gardens’ and demanded transparency from the digital supply chain telling attendees, “We need better advertising to drive growth, enabled by media transparency, to drive a clean and productive media supply chain.”

Market Demands Transparency

Advertiser Publisher

• Extremely high margins

• Limited reporting

• Traffic Arbitrage is out of

control

Market Demands Transparency

Transparency in Programmatic

Granular Optimizations Increased decisioning power gives you the ability to make

optimizations in one place

Transparent ReportingTransparent reporting available in

real-time, across all campaigns and channels

Monthly BillingCut back on IOs & receive one

invoice with all costs clearly and transparently laid out

Transparency AND Performance

• Clear idea of budget allocations:

• % of take rate

• % of ad serving

• % of data cost

• % of media buying

You Are Empowered

1. Trim Inventory that doesn’t perform

2. Pay the Right Price

3. Spend money where it works

Powerful Levers

Ad Format

Fold Placement

Creative

Device Type

Operating System

Browser

User Day of Week

User Hour of Day

Recency

Sales Cycle

Frequency

Supply Source

Site Category

Site

Audience

Data Elements

Country

State/Region

DMA

City/Town

Transparent Reporting

Data / DMP Site / SSP

Cross-DeviceTargeting

1st Party Data 3rd Party Data

• E-mail lists• CRM data stripped of PII• Pixel-based (ex: site visit)

• S2S from other DMPs• Mobile Device IDs• Set-top-box TV data

Example 1st & 3rd Party Data:

Site & SSPLanguage Browser / OS

Mobile Carrier

Device Types

Device Make & Model

Geography / IP Address

Ad Format / Ad Size

Video Size & Quality

Time & DOW

Recency & Frequency

Viewability & Fold

DSPs respond with different bids based on how they value that individual impression

00:00:00.0007

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3rd party data: I offer $3.00 because the visitor is a 25-54 year old mom reading premium news content

1st party data: I offer $2.20 because the visitor abandoned my shopping cart 2 days ago

Geo data from ad exchange: I offer $1.80 because the visitor lives within 3 miles of my restaurant

$3.00

$2.20

$1.80

Ad exchange selects highest paying advertiser and sends corresponding creative to publisher website

00:00:00.0009

4Visitor sees creative from highest paying advertiser

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Ad Exchanges makes details of the impression spot available to buyers, including: geo, site, device, format

00:00:00.0002

2Anonymous User 457 visits website and publisher sends request to fill one 300x250 ad spot

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AuctionUser 457

winning bid = $2.21

Man AND Machine

A transparent model benefits advertisers.

Actual Media Cost$1.00 CPM

DSP Markup – Fixed % of Spend$0.15 CPM

Upside For Advertisers

Agency Markup

Actual Media Cost$1.00 CPM

Ad Network Markup[Non-Transparent Margin]

$1.00 CPM

Agency Markup

Ad Network ModelAd Network Gets Lion’s Share

Transparent Margin ModelAdvertiser Gets Lion’s Share Plus Lower

Costs For Clients

Myth 2:Inventory Quality

Open Marketplace

Private Marketplace

Premium, Relevant 1st & 3rd Party Deal

Test pubs without IOs

Reporting by Deal ID

EXAMPLE DEALS

Deals for every format

STRATEGY: increase awareness and site traffic by aligning ads with premium publishers

DEVICES & FORMATS: mobile, tablet, display, video, desktop

Myth 3:Scale

A single SSP provides access to many ad networks and publishers…

SSPs help brands access the same inventory in an automated, decisioned way.

Test out pubs without IOs, while striking deals with

the most valuable inventory sources

Save time & money with negotiations, setup, billing,

workflow

Fully control targeting –reach the right user for the

right price

Holistic reporting across different sites, deal types,

channels

Omnichannel

Television, Broadcast TV,Connected TV

Online Video Display

Mobile/Tablet NativeAudio

Display Inventory Partners

Mobile InventoryPartners

Video Inventory Partners

Private MarketplaceContracts

Third Party DesktopData Partners

Third Party Mobile Data Partners

Third Party CrossDevice Data Partners

32 24 20 2200+

65 28 4VIEWABILITY

PARTNERSMoat

Integral Ad ScienceDouble Verify

Peer 39

CONTEXUAL/BRANDSAFETY PARTNERS

Integral Ad ScienceDouble Verify

Peer 39Grapeshot

MOBILE APP EVENTTRACKING

AppsflyerKochavaAdjustTune

A Scaled Marketplace

Myth 4:Brand Safety

3 Primary Options for Buying Digital

Publisher Direct

Ad Network

DSP

• Guarantees spot & content• Custom units & SOV

• Limited scale & targeting• Scheduled, manual buys• Dozens of IOs to manage

• Greater scale & targeting• Lower cost for inventory• ‘Exclusive’ access

• Black-box buy• Non-transparent margin

• Maximum reach & scale• Full transparency• Flexibility & decisioning

• Contract vs. IO based• Usually self-service

Upside Downside

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2

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DSP Brand Safety Controls

SSP Contractual Obligations

Inventory Vetting & Domain Blocking

SitelistTargeting

Publisher Direct

Third Party Pre-Bid

Solutions

DSP Controls User Controls via DSP

SSP Contractual Obligations

Build accountability language into SSP contracts

• Build accountability language in SSP Contracts

• Penalize SSP partners if contracts are violated

• Example obligations: Adult, COPPA Compliance, Discrimination (race, gender, etc.), Violence, etc.

Automated and Manual Inventory Scan

Domain Blocking via SSP

DSP Controls

• DSP Maintained Blacklist • Agency mandated Blacklists and/or

Whitelists• Advertiser mandated Blacklists and/or

Whitelists• Ongoing blocking based on delivery

Platform User ControlsSitelists

Platform User ControlsDirect Programmatic Buying

Platform User ControlsPre-Bid Brand Safety Technologies

Myth 5:Media Channel

A single-channel is only a piece of the pie—the

rest is missed opportunity.

Programmatic is the full pie

Display Video Mobile Audio Native Email CTV

The way consumers are engaging with advertising is drastically changing.

Immersive formats for every one of your consumer’s lifestyles & habits

From audio and app-based TV apps, to mobile interstitials, in-feed, and pushdowns—your plan is much more than a banner ad.

Think holistically about your ideal media mix—run complimentary

strategies.

Influence Consumer Journey with Real-Time, Data Driven Precision

real-time insights &

optimizations bid factor algos minimize spend

waste

advanced data activation & look-alike

unified reporting

hyper-granular targeting

holistic 1-to-1 targeting

DataProspecting

Mid-Funnel

Lower Funnel

High ImpactFormatsVideo Audio

ContextualBehavioralLookalikeNative

RetargetingCross-Device1st Party Extension

Strategies

The Future of Programmatic

“Programmatic buying is becoming more popular as marketers increasingly take an audience-centric approach to their display ad buys,” Lauren Fisher, eMarketer

Senior Analyst.

The Future

• The future of the Internet will remain ad-funded.

• To thrive, it will require a more deliberate and thoughtful

approach to targeting and measurement than we have today.

• Our industry needs to work together to embrace industry-wide

transparency and viewability standards to combat poor media

supply chain practices.

Trading Academy Program

Appendix

Fight & Prevent Online Fraud in 3 Steps

Leverage Historical Data• Apply learnings and data from

past activity to future decision-making to prevent fraud and malicious activity

Partner with Industry Leaders• Address fraud and nonhuman

traffic detection using both internal platform solutions and tools from DSP partners

Focus on Quality & Transparency• Apply learnings and data from

past activity to future decision-making to prevent fraud and malicious activity

Partner Solutions: Below are example Partners that provide fraud protection capabilities.

PUBLISHER

$ $

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DSP

v Bidding Variables: Geo, Frequency, Site, Time, Date

v Algorithmic Optimizationv Reporting & Insights

BID

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AD EXCHANGES / SSPs

MEASUREMENT & AD VERIFICATION

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PRO

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ARM

AUDIENCE

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Pre-Bid: Page Quality, Brand Safety, Contextual

Publisher Contracts & Direct Tags

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A closer look at the importance of data…

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RTB Marketplace SSP

Publisher Ad Server

PublisherMeasurement & Verification

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The internet is a BIG place.

5 million Queries per Second.

300 million impressions per minute.

18 billion impressions per hour.

432 billion impressions per day.

So how do we find Waldo in a sea of so much information?

It can take up to 75% of a campaign’s flight and budget—this is not possible in short flights.

Most of this waste can be eliminated before a single impression is put into market.

How?

Data.(Cookie & Device ID-based)

Put data at the center of your plan.

1st Party Data(advertiser owned)

Active tags on sites, apps, events• Homepage visits, conversion, app download, clicks, video view

Offline data, CRM• Email lists, offline purchases, addresses, rewards card member

3rd Party Data(data partners create & own)

Online and offline collection methodology• Purchases, web browsing, public records, banks, in-app

Lookalike Modeling• Find 3rd party segments that look most like 1st party audience

How Audience Data is Created: Web vs. App

How Data Elements are Built Identifiers

Cookie IDs• Unique to each Ad Tech company

• Requiring syncing• Cookies expire

Previous Web Behavior• Sites that you have visited

Previous Physical Location• Based on your real world location

WebAudience Data

AppAudience Data

Device IDs• Persistent (no syncing)• No limit lifespans

Some primary data collection methodologies…

Current or previous mobile or IP location

Banks, credit cards, financial institutions

Web browsing activity, interests, & surveys

Online & offline retail purchases

SKU-level purchase info

Panel & research based

Set-top-box television data

Mobile activity & app ownership

Social media shares & activity

Public records & demographic info

Use 1st party data to inform your entire buy.

A lookalike model shows you a group of users that exhibit traits most similar to known converters or valuable first party audiences – lookalike modeling positions your media to

reach the right user before a single impression is put into the market.

audiencegeography IP address browser / OS device type date / DOWtime of daysite / category

Without pixels on your brand’s site, & audience targeting on the plan…

No cross-device targeting to other phones, laptops, tablets associated with your audience’s profile

No insight into user’s full path to conversion, or optimize to conversion or site visit events

Oversaturation to brand, issues with frequency caps Wasted budgets in learning phase

of campaign from not leveraging lookalike modeling

No retargeting clickers, video viewers, site visitors, and no sequential messaging