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McGoran -- Keynote
 

McGoran -- Keynote

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  • In order to understand how the display advertising ecosystem is changing, it’s helpful to consider how it has worked in the pastTraditional display advertising has always focused on defining a target audience, but then using content as a proxy for that audience- This has been true for traditional media like TV and print and this strategy has been passed down to interactive display.-- So on one end you have brands who want to reach consumers for their goods and services and on the other end you have publishers who have audience (read: consumers). A perfect marriage.- It stands to reason that you will reach men on sites like ESPN, women on sites like iVillage, etc. This is supported by various audience measurement and planning services.(CLICK)- Many brands employ their agencies to do their online media buying and strategy for them, just as they do offline(CLICK)With the growth and fragmentation of the web came an influx of advertising networks. Their job was to herd the cats, to organize websites – or audience – into easier to buy and implement verticals. Some were broad reach like Advertising.com and ValueClick and offered proprietary optimization platforms for performance campaigns. Others were vertical-specific like Glam for women or TAN for travel ,etc.But as the number of networks grew and grew (over 300 by some estimations) it became more difficult for agencies and brands to tell them apart. Who had the best technology? How could I be sure I was getting the best CPM? Where were my ads going to show up exactly?- The same was true for publishers. And in fact the network model posed a bit of a conflict: If the network was trying to achieve the highest CPM for the publisher (in order to secure better inventory), wasn’t this at odds with the efficiencies that they were trying to achieve for the advertisers?(CLICK)Then came the birth of the exchange like Yahoo’s RightMedia and Google’s DoubleClick Ad Exchange. Since many publisher sell only 10 - 20 percent of their premium inventory, and the ability to navigate the various networks to sell their non-guaranteed inventory became more and more confusing, exchanges gave publishers the opportunity to put as much (or as little) of their unsold inventory into an auction based environment that would hopefully drive up their CPMs (much in the way it had worked for search).- Another development was the creation of Supply-Side Platforms like AdMeld, Rubicon Project and Pubmatic. These companies work solely for the publisher and provide tools to manage yield and a single interface to manage how their surplus inventory is sold.- And so the dynamic changed from many networks having direct relationships with many publishers (and creating a good deal of overlap) to those same networks now bidding on inventory across a consolidation of inventory aggregators: exchanges and SSPs.(CLICK))Publishers also came to realize (though perhaps slowly and many still do not understand the fast-changing dynamic of this part of the ecosystem!) that there was value in their user data. But most did not have the scale necessary to make buying it attractive to brands and agencies, nor did they have the technology to make it deliverable. So companies like Blue Kai and IXI developed ways to aggregate user data from various sources and make it available to advertisers to target specific audience groups across non-targeted inventory at scale.(CLICK)This then spawned another technology offering and a spate of new companies were born: The DSP or Demand Side Platform. Companies like MediaMath, Turn and Google’s Invite Media, developed sophisticated algorithms that could look at various data aggregators, could look at cookies across all exchanges and SSPs and place bids for advertisers while considering the variables of user data, inventory and pricing. In addition, they were not beholden to specific data providers or inventory aggregators.- The creation of Real Time Bidding (RTB) meant that the exchanges could push out every ad impression event as it happened to all of the DSP. The DSP then – in real time – would match the user to their database and make the appropriate bid on that auction for their advertisers. The DSPs are processing tens of thousands of Queries Per Second (QPS) and bidding with all the information available about a specific ad-serving event.(Click)The agencies and agency holding companies saw this as a natural extension to their business – particularly as they could now look holistically across all sources of user data and all sources of inventory. The ability to manage bidding at this scale created natural efficiencies (both in pricing and performance) for their brands. So the Agencies formed their own Trading Desks – some by developing proprietary technology – many more by partnering with the DSP vendors. Companies like Publicis’ Vivaki, IPG’s Cadreon, Omnicom’s Accuen, etc. provided a new business model for agencies essentially making them “In House Ad Networks”(CLICK)Not good news for the undifferentiated broad-reach ad network.Other things to mention? Private Exchanges: The formation of “Private Exchanges” where premium publishers create their own biddable collection of inventory and cut out the middle man. Many are working with Right Media for example to create specific “Linking Agreements” with specific advertisers. No need to SSP, no need for network. Publishers like it because it increases their margin. Advertisers like it because they know exactly where their ads show up. Transparency: DSPs also offer something that the networks did not: Transparency. Many “Opague” or “Blind” networks gave premium brand advertisers pause. Where would my ads show up? Where had my ads shown up?Birth of the verification companies like Double Verify, AdSafe, etc.
  • Remove “Adopted by…” line if not applicable to your audience.***0911 Update: Adopted by 90% of Top U.S. Media Properties
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  • Launch of google plus in june
  • Facebook allows 13+ but 50% of 2-11 year olds are using social networking sites
  • What about where your ad was displayed?Most of the time your ad service is delivered to the web properties you’d expect…Google sites, Yahoo sites, Microsoft sites, But then there’s always the exceptions. How’d you’d like to be the brand manager on a large cereal brand and find out you ad was on: those are real websites where our ads have been, albeit in relatively small impressions. You’d better be sure it’s not your brand.

McGoran -- Keynote McGoran -- Keynote Presentation Transcript