Digital Transformation Or Disruption?

Digital Transformation or Disruption?
DSPs, Digital Advertising, and the Changing Role of the Agency
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Agenda
Introductions
Industry Overview
DSP Learnings & Key Requirements
RTB & Premium Inventory
Branding vs Performance
Success Stories
Q&A with panelists
© 2010 DataXu, Inc. Privileged & Confidential
2

Participants
Steve Weeks, Sr. Manager of WW Advertising
Mike Baker, CEO
Michael Jenkins, Sr. Communication Strategist
Ben Trenda, VP of REVV Marketplace Development
3

Agenda
Introductions
Industry Overview
Mike Baker, CEO
4

The Evolution of Online Media Buying
Direct from Publishers 1996 
Ad Networks1998 
Ad Exchanges2005 
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
Ads
Placements
Online display
exchanges
Publisher
Advertiser
Agency
Online video
exchanges
DSPs
Mobile
exchanges
Consumer data aggregators
Audience

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
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

AUDIENCE BUYING
RETARGETING
The biggest problem with 1st gen DSPs: SCALE
REACHES ALL CONSUMERS
Use insights from your own data to scale across display, mobile and video
AUDIENCE DISCOVERY
LIMITEDby the number of cookies you can buy
LIMITEDby the number of people who come to your site

DataXu’s Next Generation Platform
sd
LEARNS
FROM WHAT’S WORKING
1.
2.
MEASURES
CONSUMER
BEHAVIOR
BUYS
MEDIA ACROSS
CHANNELS
AND FORMATS
DECIDES
WHAT CONSUMERS,
CONTEXTS, CREATIVES,
AND PRICE
4.
3.

Why Dynamic Decisioning Matters

Learning: Price VolatilityFavors 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

Learning: Optimization offers efficiency at scale
15
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”
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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
Ben Trenda, VP of REVV Marketplace Development
17

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
Fastest growing advertising tech company:
Founded by ad server pioneers in 2007
250 employees
$60M funding
More than 1 trillion ads served
Key Acquisitions:
Fox Audience Network
OthersOnline: audience affinity analytics
SiteScout: ad security
Most Innovative Company, American Business Awards 2010
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.
REVV processes more than 60 billion ad transactions per month (1 trillion+ to date)
Largest* Display Advertising Marketplace
*Per Quantcast (#1 Rank)
550M+ global uniques
600+ ad networks, exchanges, DSPs
Non-Competitive (no advertiser access)
Transparent (not "black box")

REVV & Publishers
the Rubicon Project has engineered a technology platform and marketplace to enable publishers to more effectively compete in today's highly-competitive market.
Increased Revenue
Manage all sources of demand
Yield optimize for highest revenue
across all sources of demand, including RTB
More effectively compete:
massive network effect vs. silo
Reduced Costs
Eliminate unnecessary overhead:
trafficking, ad quality, management, reporting, billing, collections
Total Brand Protection
Protect your user experience
Protect direct sales pricing
One platform
to yield optimize all inventory
one marketplace
to access all demand

RTB & Publishers
KEY TRENDS
Advertising revenue moving from offline to online
2/3 of online display impressions sold on a non-guaranteed basis
RTB is nascent (“industry beta”): limited inventory, today small (but fast-growing!) % of total spend
Notable drivers on the BUY side:
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
Tradingdesks limiting ad network access to this spend
DSPs aggregating agency, advertiser & network demand

RTB & Publishers
KEY TRENDS
Notable drivers on the PUBLISHER side:
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?
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
OPPORTUNITIES & RISKS
RTB can give publishers…
Revenue - new source of demand
Quality - high quality brand campaigns not always available through ad networks
Efficiency – the right ad to the right user at the right time, at the highest possible price
360° Yield Optimization – RTB within the context of total demand access can drive overall yield
But it can take away, too…
User Experience Issues
Direct Sales Revenue/Channel Conflict
Data Leakage

Questions Publishers Ask
INSIGHT & CHALLENGES
Pricing
How do I leverage RTB to protect & build my pricing (not erode it)?
Control:
How can I control global sales rights management on my inventory?
Who should have access to my inventory? When? Where?
How should I manage my advertiser & agency relationships?
Flexibility:
Is there technology that will enable me to offer priority access to inventory (non-guaranteed) to certain partners on the fly?
Visibility
What inventory should I make available for RTB?(sites, zones, ad sizes, user sessions, etc.)
How can I get the same insight into my inventory, audience and revenue that the buy-side has?
Data and Safety
Do you have the right technology and contractual controls to protect my inventory, sales and data assets?

What’s Next: RTB in 2011
CONTROL, VISIBILITY AND FLEXIBILITY
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.
Private Marketplaces
Preferred Price Floors
First Look/Right of Refusal

What’s Next: RTB in 2011
Protected RTB: IT’S ALL ABOUT CONTROL
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
CPM
20%
CPM
INCREASE
RTB 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 inventorywhen Protected RTB is enabled in concert with all optimization sources
publisher A
Total revenue lift before RTB
publisher A
Total revenue lift after RTB

Agenda
Introductions
Industry Overview
Success Stories
Steve Weeks, Sr. Manager of WW Advertising
Michael Jenkins, Sr. Communication Strategist
27

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”
“Brand” Efforts
“Response” Efforts
Sell product
Network buys focused on increasing campaign reach
Remnant inventory
Messaging focused on product features
Drive to “Try/Buy now”
Few opportunities to apply cross-campaign insights in real-time

Cross-campaign interaction: The Present
Brand Efforts
Response Efforts
Leverage data to deliver relevant, timely messages to in-market consumers
Excite, engage & entice. Grow marketable universe.

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…
Brand Campaign
Excite, Engage & Entice
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
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…and response efforts will capitalize on insights.
Matching product to sub-targets
(i.e. After Effects for video enthusiasts)
Response Campaign
Deliver relevant, timely messages
Purchase process messaging
(i.e. offers for trialists)
Broad, efficient media +
granular targets & messages
Leverage site data to develop relevancy
Incentivize when necessary
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The Results
Response Campaigns
Brand Campaigns

Agenda
Introductions
Industry Overview
Success Stories
Q&A with panelists
34

IAB Updates: www.iab.net
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

Credits, Future Webinars
Earn Credits for attending IAB Webinars
Individuals 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 Submissions
If 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 luke@iab.net, or visit www.iab.net/member_webinar_submission

Q&A
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Digital Transformation Or Disruption?

by DataXu on Dec 17, 2010

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Digital Transformation Or Disruption? Presentation Transcript