Forrester wave sell side platform

January 3, 2011The Forrester Wave™: Sell-SidePlatforms, Q1 2012by Michael Greenefor Interactive Marketing Professionals Making Leaders Successful Every Day

For Interactive Marketing Professionals January 3, 2011 The Forrester Wave™: Sell-Side Platforms, Q1 2012 AppNexus and Admeld Lead, With Multiple Vendors Close Behind by Michael Greene with Emily Riley, David Truog, Jennifer Wise, and James McDavidEX ECUTIV E S U M MA RYIn Forrester’s 34-criteria evaluation of sell-side platform vendors, we found that AppNexus and Admeldled the pack because of their highly granular controls for publishers and proven ability to support adiverse array of sales opportunities. These leads, however, are far from insurmountable, and they facestrong competition from other leading vendors — notably PubMatic and Rubicon Project — which areaggressively ramping up their development efforts and turning once-distinguishing platform featuresinto table stakes. Customize this Forrester Wave™ to determine which sell-side platform partner suitsyour needs best.TABL E OF CO NTE N TS N OT E S & RE S O U R C E S 2 Sell-Side Platforms: A Vital Part Of The Forrester conducted product evaluations in Q4 Publisher Tech Stack 2011 and interviewed more than 20 vendor and SSP Vendors Have Distinct Legacies user companies. 3 SSP Evaluation Overview Related Research Documents Current SSP Offerings Differentiate Across Four “Making Sense Of The Digital Media Buying Key Areas Platform Landscape” 4 SSP Vendors Are Putting More Control Into December 7, 2011 The Hands Of Publishers “The Future Of Digital Media Buying” 7 Vendor Profiles September 21, 2011 Leaders Strong Performers Contenders 9 Supplemental Material © 2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please email clientsupport@ forrester.com. For additional reproduction and usage information, see Forrester’s Citation Policy located at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

2 The Forrester Wave™: Sell-Side Platforms, Q1 2012 For Interactive Marketing Professionals SELL-SIDE PLATFORMS: A VITAL PART OF THE PUBLISHER TECH STACK After years of limited investment in ad technology, digital publishers are now investing in tools for real-time bidding, audience targeting, and yield management to more efficiently and effectively meet the needs of their advertisers. As we enter a new era for digital media buying, Forrester believes that the capabilities of sell-side platforms (SSPs) are an important component of this new suite of technologies.1 Why? · Managing multiple indirect sales channels can be an operational nightmare. It’s unlikely that sales teams fill 100% of their site’s inventory every month. To fill the gap, indirect sales channels like ad networks have helped publishers squeeze extra revenues out of their inventory but put logistical strains on an ad operations team. SSPs help aggregate multiple indirect sales relationships and optimize revenue across them. · Indirect sales come with the risk of cannibalizing direct sales efforts. Adding several new sales channels creates opportunities for new revenues but leads to channel conflict that limits control and pricing power. Publishers need tools to help them effectively balance channel conflict risk with revenue opportunities. · New buying methods require publishers to step up their technical capabilities. Media buyers are rapidly embracing programmatic buying methods such as real-time bidding (RTB) to purchase media both more efficiently and more effectively. In order to take advantage of demand, publishers need tools that let them make inventory available to programmatic buyers. SSP Vendors Have Distinct Legacies SSPs began as tools to help publishers manage relationships with multiple ad networks. With the advent of new programmatic buying methods, however, the category has expanded in scope, now encompassing vendors with two distinct legacies: · Classic SSP vendors. Rubicon Project, PubMatic, and Admeld began as tools to help publishers decrease the operational inefficiencies that come with managing multiple ad network relationships. These vendors also helped publishers maximize revenue by connecting publishers to new ad networks and pitting these against each other in a de facto auction for publisher ad impressions. Today, these vendors are expanding beyond their legacies of ad network remediation into new programmatic buying methods. · New SSP vendors. Programmatic exchange vendors such as Google’s DoubleClick Ad Exchange (ADX), Right Media, and AppNexus have developed publisher-facing interfaces that enable publishers to source demand from more dynamic buy-side sources such as RTB auctions and to set granular business rules for how the exchange auction allocates inventory to bidders. January 3, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited

The Forrester Wave™: Sell-Side Platforms, Q1 2012 3 For Interactive Marketing ProfessionalsSSP EVALUATION OVERVIEWOn the basis of our past research, our assessment of what publishers need, and our interviews withvendors and clients, we developed a comprehensive set of 34 criteria to evaluate the vendors. Thecriteria fall into three categories: · Current offering. This set of criteria judges the vendors’ current set of technology and service capabilities across five categories: the vendor’s auction model and platform, publisher protection tools, yield controls and optimization, implementation and technical performance, and user interface and reporting. · Strategy. With this set of criteria, we assessed how well the vendor’s market vision, corporate strategy, and resources align with publishers’ needs. · Market presence. Finally, we examined the vendors’ size and position in the market based on revenues and financial backing of the publisher client base as well as the number of employees across product, sales, and services.Current SSP Offerings Differentiate Across Four Key AreasGiven the rapid pace of innovation among these vendors, many features that were noveldifferentiators just six months ago are now table stakes. Nonetheless, SSP vendors differ acrossseveral critical publisher needs. Still, not all of these capabilities will be equally important to all,so we urge publishers to weigh the importance of these factors to their business model prior toselecting a partner (see Figure 1). · Ad format acceptance. Ad format support varies widely among SSP vendors. Publishers looking to monetize only basic banner formats like static and flash banners would be fine with the limited ad format support of Right Media. On the other hand, publishers looking to manage not only banners but also rich media, video, and mobile through a single platform will have to turn to DoubleClick ADX. · Yield optimization capabilities. Classic SSPs like Rubicon Project, Admeld, and PubMatic offer proprietary optimization algorithms for helping publishers maximize revenue. These out- of-the-box solutions work well for most publishers. However, some publishers will prefer to manually manage yield optimization or use their own optimization technology that can better take into account publisher-specific factors like strength of individual advertiser relationships and seasonality of direct sales results. These publishers should turn to a highly flexible vendor like AppNexus. · Breadth of ad and data management capabilities. SSPs are rapidly expanding their offerings beyond core SSP capabilities into more parts of the publisher technology stack, such as audience© 2011, Forrester Research, Inc. Reproduction Prohibited January 3, 2011

4 The Forrester Wave™: Sell-Side Platforms, Q1 2012 For Interactive Marketing Professionals data management and primary ad serving. Publishers should weigh the benefits of a simplified technology stack against those of weaving together best-in-breed capabilities from disparate vendors. · Services and support. SSP vendors offer a wide array of services, from basic technical support to full-on strategic consulting services. While many publishers can benefit from a broader range of services, these do not come without tradeoffs. First, more extensive support often costs more, whether in the form of increased revenue-sharing percentages or one-time costs. Additionally, some services — such as the facilitation of private exchange deals — may require coordination between your advertising clients and the vendor’s media relations teams, adding a layer of complexity to the client relationship. Figure 1 Evaluated Vendors: Vendor Information And Selection Criteria Product engineering Vendor Number of clients and support staff Date evaluated Admeld Approximately 500 More than 60 October 2011 AppNexus Approximately 180 More than 70 October 2011 DoubleClick Ad Exchange N/A N/A October 2011 PubMatic Several hundred More than 200 October 2011 Right Media More than 300 More than 250 October 2011 Rubicon Project More than 300 More than 100 October 2011 Vendor selection criteria Vendor must offer effective auction model and platform. Vendor must offer innovative solutions. Vendor must have generated interest from Forrester clients. Source: Forrester Research, Inc. SSP VENDORS ARE PUTTING MORE CONTROL INTO THE HANDS OF PUBLISHERS Our evaluation uncovered a market in which SSP vendors are rapidly expanding the depth and breadth of controls they provide for publishers and pushing head first into RTB. Through the use of our default weighting of criteria (based on our research into what matters most to large premium publishers), we found that: January 3, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited

The Forrester Wave™: Sell-Side Platforms, Q1 2012 5 For Interactive Marketing Professionals · AppNexus and Admeld lead the pack. AppNexus is a Leader because of its product’s deep flexibility and extensibility and its ambitious vision for how publishers will purchase and utilize ad technology. Although it doesn’t have the prettiest user interface, AppNexus provides a solid foundation for large publishers with lots of ad product strategists, technology developers, and experienced operations pros. Conversely, Admeld is a Leader because of the breadth of its current offering and its early innovation around features like private exchange capabilities, variable price floor controls, and advertiser-level bid reporting. Although other vendors have recently added similar features and functionality, Admeld’s legacy of innovation means that these mechanisms are often more refined today and that it can aggressively push forward into new development areas. · PubMatic and Rubicon Project follow closely behind. PubMatic and Rubicon Project have recently improved their offerings with stronger publisher controls and deeper levels of reporting. PubMatic excels at yield optimization and serving publisher needs like audience data management. Likewise, Rubicon Project succeeds with its mix of an intuitive interface and innovation around bringing new demand sources to publishers. · DoubleClick ADX is highly competitive. DoubleClick ADX succeeds due to its high reliability and integration into the popular DoubleClick publisher technology stack. The DoubleClick ADX tool set has expanded rapidly over the past year and is bound to only improve with Google’s acquisition of Admeld. · Right Media faces an uncertain future. Right Media was the earliest exchange player and introduced many of the publisher-side controls that are rapidly becoming standard on other SSPs. Still, Yahoo — Right Media’s parent company — has a mixed track record of investment in the product. Moreover, in addition to absent leadership, clients report concerns over declining customer service levels and the willingness of leadership to update the product at the same pace as other vendors.This evaluation of the SSP market is intended to be a starting point only. We encourage readers toview detailed product evaluations and adapt the criteria weightings to fit their individual needsthrough the Forrester Wave Excel-based vendor comparison tool (see Figure 2).© 2011, Forrester Research, Inc. Reproduction Prohibited January 3, 2011

6 The Forrester Wave™: Sell-Side Platforms, Q1 2012 For Interactive Marketing Professionals Figure 2 Forrester Wave™: Sell-Side Platforms, Q1 ’12 Risky Strong Bets Contenders Performers Leaders Strong Admeld Go online to download Rubicon Project PubMatic the Forrester Wave tool for more detailed product AppNexus evaluations, feature DoubleClick Ad Exchange comparisons, and customizable rankings. Current offering Right Media Market presence Full vendor participation Incomplete vendor participation Weak Weak Strategy Strong Source: Forrester Research, Inc. January 3, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited

The Forrester Wave™: Sell-Side Platforms, Q1 2012 7 For Interactive Marketing ProfessionalsFigure 2 Forrester Wave™: Sell-Side Platforms, Q1 ’12 (Cont.) Right Media Weighting AppNexus Forrester’s PubMatic Rubicon Admeld ProjectCURRENT OFFERING 50% 4.44 3.92 4.09 2.45 4.11 Auction and platform 15% 4.60 4.50 3.90 2.50 3.10 Publisher protection 25% 4.80 4.20 3.70 2.10 4.20 Yield controls and optimization 30% 3.60 4.10 4.60 2.30 4.20 Implementation and performance 15% 5.00 4.34 5.00 3.66 5.00 User interface and reporting 15% 4.80 2.10 3.00 2.10 3.90STRATEGY 50% 3.80 4.80 3.80 1.20 3.20 Corporate strategy 50% 3.80 4.60 3.40 0.60 3.40 Product strategy 50% 3.80 5.00 4.20 1.80 3.00MARKET PRESENCE 0% 3.56 1.84 3.16 4.28 3.76 Clients 60% 4.40 1.40 3.00 4.60 4.40 Financial viability 20% 3.00 3.00 3.00 3.00 3.00 Employees 20% 1.60 2.00 3.80 4.60 2.60All scores are based on a scale of 0 (weak) to 5 (strong). Source: Forrester Research, Inc.VENDOR PROFILESLeaders · AppNexus. AppNexus stands out from the pack with its unique approach to enabling publisher monetization. Rather than providing publishers with an out-of-the-box marketplace, AppNexus provides infrastructure and buy-side technical integrations that enable publishers to create their own market for inventory. For publishers that don’t need much support for complex sponsorship programs or other highly customized direct sales efforts, AppNexus can also be the primary ad server. Making the most of AppNexus capabilities, however, requires strong strategic, technical, and operational skills from the publisher as well as investment in marketing the publisher’s solution to media buyers. So publishers looking for short-term simplicity need not apply. As such, AppNexus is ideally suited for large publishers that need to manage complex monetization challenges across multiple sites or properties and are willing to dedicate resources to building on top of the flexible and robust AppNexus platform. · Admeld. Like its fellow classic SSPs, Admeld helps publishers manage both ad network and RTB channels, but its early investments in RTB technology have given it a head start over other SSPs. While other vendors have closed the gap on providing granular controls and advertiser-level© 2011, Forrester Research, Inc. Reproduction Prohibited January 3, 2011

8 The Forrester Wave™: Sell-Side Platforms, Q1 2012 For Interactive Marketing Professionals visibility, Admeld continues to distinguish itself through its strategic services capabilities. Admeld clients have been among the most successful in fostering new buying models such as private exchange deals with agency trading desks. And these clients credit Admeld’s strong understanding of buy-side needs as instrumental in the formation and execution of these programs. During the research process for this document, Admeld became part of Google’s DoubleClick division. We expect Google to model this acquisition after its earlier acquisition of demand-side platform (DSP) Invite Media. This means that Admeld will continue to invest in expanding its current functionality while moving toward strategic product integration inside the DoubleClick stack. Consequently, we took into account Google’s broader ad technology vision when evaluating Admeld’s strategy but assessed Admeld’s current offering as an independent product offering. · PubMatic. Although PubMatic is still in the early phases of rolling out advanced RTB features like private exchanges, the vendor impresses clients with strong service offerings, successful automated optimization capabilities, and broad ad format support. PubMatic also is expanding beyond core SSP offerings as it incorporates audience data management features into the platform and is looking to help publishers drive value by optimizing advertising and content together. · Rubicon Project. Rubicon Project excels at helping publishers source and aggregate multiple sources of traditional and programmatic demand and stands out for its robust ad quality protection. It still lags behind other vendors in terms of establishing full private marketplace functionality that helps publishers manage billing and other contractual arrangements. Moreover, some clients may stress the capabilities of the vendor’s services and support teams — particularly in the New York City area — but Rubicon Project is rapidly expanding its East Coast footprint with strong hires to address this challenge. Still, Rubicon Project performs well with its innovation around non-RTB buying methods, including a proprietary integration with agency buying tool Donovan Data Systems (now MediaOcean) and its intuitive buy-side-focused REVV media buying platform. Strong Performers · DoubleClick ADX. Google opted not to participate in this Forrester Wave evaluation. Nonetheless, we felt that the substantial market presence of the DoubleClick ADX product warranted its inclusion in this evaluation. While we were not able to go into the same depth as with other vendors, publicly available documents and conversations with ADX clients revealed that ADX’s offering is evolving substantially. Historically, ADX has benefitted chiefly from its strong scale, reliable fill rates through Google’s ad network, and integration into the DoubleClick technology suite. Additionally, recent product enhancements such as the introduction of anonymous participation, private ad slots, and direct deals mean that publishers now have more controls within the platform. ADX still lacks some highly granular controls, advertiser-level reporting features, and strategic service capabilities of other vendors but will likely add many of those tools and more, with its integration of Admeld and ongoing product development efforts. January 3, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited

The Forrester Wave™: Sell-Side Platforms, Q1 2012 9 For Interactive Marketing ProfessionalsContenders · Right Media. Right Media remains a flexible platform that can meet a variety of ad serving needs and gives publishers a high degree of control. But the vendor has suffered from a lack of strategic direction from its parent, Yahoo, and only recently launched broad support for buyer- preferred RTB buying. This move should help streamline processes for buyers, enabling greater demand for publishers. Nonetheless, we have concerns — echoed by Right Media clients — over future investment in Right Media as both Right Media and its parent company undergo leadership changeover.SUPPLEMENTAL MATERIALOnline ResourceThe online version of Figure 2 is an Excel-based vendor comparison tool that provides detailedproduct evaluations and customizable rankings.Data Sources Used In This Forrester WaveForrester used a combination of three data sources to assess the strengths and weaknesses of eachsolution: · Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor qualifications. · Product demos. We asked vendors to conduct demonstrations of their product’s functionality. We used findings from these product demos to validate details of each vendor’s product capabilities. · Customer reference calls. To validate product and vendor qualifications, Forrester also conducted reference calls with three of each vendor’s current customers.The Forrester Wave MethodologyWe conduct primary research to develop a list of vendors that meet our criteria to be evaluatedin this market. From that initial pool of vendors, we then narrow our final list. We choose thesevendors based on: 1) product fit; 2) customer success; and 3) Forrester client demand. We eliminatevendors that have limited customer references and products that don’t fit the scope of our evaluation.After examining past research, user need assessments, and vendor and expert interviews, we developthe initial evaluation criteria. To evaluate the vendors and their products against our set of criteria,we gather details of product qualifications through a combination of lab evaluations, questionnaires,demos, and/or discussions with client references. We send evaluations to the vendors for their review,and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies.© 2011, Forrester Research, Inc. Reproduction Prohibited January 3, 2011

10 The Forrester Wave™: Sell-Side Platforms, Q1 2012 For Interactive Marketing Professionals We set default weightings to reflect our analysis of the needs of large user companies — and/or other scenarios as outlined in the Forrester Wave document — and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and we encourage readers to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve. ENDNOTES 1 Media buying technology and operations are undergoing a dramatic transformation — marketers are replacing traditional relationship marketing tactics and opaque ad networks with programmatic media buying that includes transparent ad exchanges and audience targeting. These new options give interactive marketing professionals what they crave — better targeting, less waste, more efficiency, and better results. However, marketers who don’t take an active role in managing this new form of media buying will pay the price, either by dealing with inefficient buyers reluctant to abandon the old model or by ceding control to a demand-side platform (DSP) or central trading desk without entirely understanding its methodologies. To take full advantage of the opportunity and move one step closer to achieving the CORE mission, interactive marketers must jump into programmatic media buying by evaluating their current media buying partners against a new set of programmatic vendor and agency options to determine their ideal balance of service and control. See the September 21, 2011, “The Future Of Digital Media Buying” report. January 3, 2011 © 2011, Forrester Research, Inc. Reproduction Prohibited

Making Leaders Successful Every Day Headquarters Research and Sales Offices Forrester Research, Inc. Forrester has research centers and sales offices in more than 27 cities 60 Acorn Park Drive internationally, including Amsterdam, Netherlands; Beijing, China; Cambridge, MA 02140 USA Cambridge, Mass.; Dallas, Texas; Dubai, United Arab Emirates; Frankfurt, Tel: +1 617.613.6000 Germany; London, UK; New Delhi, India; San Francisco, Calif.; Sydney, Fax: +1 617.613.5000 Australia; Tel Aviv, Israel; and Toronto, Canada. Email: forrester@forrester.com Nasdaq symbol: FORR For the location of the Forrester office nearest you, please visit: www.forrester.com www.forrester.com/locations. For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions.Forrester Research, Inc. (Nasdaq: FORR)is an independent research companythat provides pragmatic and forward-thinking advice to global leaders inbusiness and technology. Forresterworks with professionals in 19 key rolesat major companies providingproprietary research, customer insight,consulting, events, and peer-to-peerexecutive programs. For more than 28years, Forrester has been making IT,marketing, and technology industryleaders successful every day. For moreinformation, visit www.forrester.com. 60384

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