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paidContent 9.14.11

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  • Despite growing demand for online advertising, publishers are struggling more than ever to grow their ad revenue efficiently. As buyers get smarter, publishers often find themselves at a disadvantage in the ‘arms race’ developing over data, targeting, and inventory optimization.
  • It used to be a lot simpler. In the ‘old days’ (like 1999) publishers would sell as much as they could with their sales force, then sell the rest through intermediaries. They had direct (“I sell it”) and indirect (“I sell through other firms”) sales strategies, often managed by different people in their organization.  For indirect sales, originally rep firms, and later ad networks, would sell that publisher’s inventory. Soon a thing called the ‘daisy chain’ developed. Publishers would stack a series of ad networks into a hierarchy. The ad network yielding the highest effective CPM got the first set of impressions; then the publisher would pass the next set of impressions to the next network, and so on. It was a big operational headache—a completely manual process where yields were reviewed weekly by a dedicated team to adjust allocations.To solve this problem, a bunch of yield optimizers, often called supply side platforms,said that they could manage the daisy chain for publishers. These supply side platforms said they could do two things: Take the pain awayOptimize the daisy chain and make more moneyWhich kind of happened. But it only focused on one part of a publishers total revenue portfolio.
  • It used to be a lot simpler. In the ‘old days’ (like 1999) publishers would sell as much as they could with their sales force, then sell the rest through intermediaries. They had direct (“I sell it”) and indirect (“I sell through other firms”) sales strategies, often managed by different people in their organization.  For indirect sales, originally rep firms, and later ad networks, would sell that publisher’s inventory. Soon a thing called the ‘daisy chain’ developed. Publishers would stack a series of ad networks into a hierarchy. The ad network yielding the highest effective CPM got the first set of impressions; then the publisher would pass the next set of impressions to the next network, and so on. It was a big operational headache—a completely manual process where yields were reviewed weekly by a dedicated team to adjust allocations.To solve this problem, a bunch of yield optimizers, often called supply side platforms,said that they could manage the daisy chain for publishers. These supply side platforms said they could do two things: Take the pain awayOptimize the daisy chain and make more moneyWhich kind of happened. But it only focused on one part of a publishers total revenue portfolio.
  • In the hierarchy of ad inventory, first there’s exclusive. Nobody else gets it. It’s a commitment a publisher makes to show only one advertiser during a set time period. Second, there are campaigns sold directly by the publisher’s sales force on a guaranteed basis. The guarantees are based either on volume (set # of impressions per month), or by share-of-voice (% of total inventory for the month). Third there are non-guarenteed deals sold directly by a publisher’s sales force. Often these are performance deals (ie. that may yield a $1.20 ‘effective’ CPM for a publisher), but are served only on a ‘space available’ basis.But what about the bigger picture? I call it the ‘uber’ daisy chain: all four types of ad inventory including exclusive, guaranteed, non-guaranteed that’s sold directly, and non-guaranteed that is sold indirectly. How do you optimize all of that? Where should a publisher send the next impression they serve to generate the most revenue possible while keeping their best customers happy? Publishers need a system that looks holistically at all their ad inventory to make sure they make the right decision—and then captures all the information in one dashboard. Otherwise they have to look at different sets of data and sew it all together to understand the whole picture.
  • In the hierarchy of ad inventory, first there’s exclusive. Nobody else gets it. It’s a commitment a publisher makes to show only one advertiser during a set time period. Second, there are campaigns sold directly by the publisher’s sales force on a guaranteed basis. The guarantees are based either on volume (set # of impressions per month), or by share-of-voice (% of total inventory for the month). Third there are non-guarenteed deals sold directly by a publisher’s sales force. Often these are performance deals (ie. that may yield a $1.20 ‘effective’ CPM for a publisher), but are served only on a ‘space available’ basis.But what about the bigger picture? I call it the ‘uber’ daisy chain: all four types of ad inventory including exclusive, guaranteed, non-guaranteed that’s sold directly, and non-guaranteed that is sold indirectly. How do you optimize all of that? Where should a publisher send the next impression they serve to generate the most revenue possible while keeping their best customers happy? Publishers need a system that looks holistically at all their ad inventory to make sure they make the right decision—and then captures all the information in one dashboard. Otherwise they have to look at different sets of data and sew it all together to understand the whole picture.
  • In the hierarchy of ad inventory, first there’s exclusive. Nobody else gets it. It’s a commitment a publisher makes to show only one advertiser during a set time period. Second, there are campaigns sold directly by the publisher’s sales force on a guaranteed basis. The guarantees are based either on volume (set # of impressions per month), or by share-of-voice (% of total inventory for the month). Third there are non-guarenteed deals sold directly by a publisher’s sales force. Often these are performance deals (ie. that may yield a $1.20 ‘effective’ CPM for a publisher), but are served only on a ‘space available’ basis.But what about the bigger picture? I call it the ‘uber’ daisy chain: all four types of ad inventory including exclusive, guaranteed, non-guaranteed that’s sold directly, and non-guaranteed that is sold indirectly. How do you optimize all of that? Where should a publisher send the next impression they serve to generate the most revenue possible while keeping their best customers happy? Publishers need a system that looks holistically at all their ad inventory to make sure they make the right decision—and then captures all the information in one dashboard. Otherwise they have to look at different sets of data and sew it all together to understand the whole picture.
  • In the hierarchy of ad inventory, first there’s exclusive. Nobody else gets it. It’s a commitment a publisher makes to show only one advertiser during a set time period. Second, there are campaigns sold directly by the publisher’s sales force on a guaranteed basis. The guarantees are based either on volume (set # of impressions per month), or by share-of-voice (% of total inventory for the month). Third there are non-guarenteed deals sold directly by a publisher’s sales force. Often these are performance deals (ie. that may yield a $1.20 ‘effective’ CPM for a publisher), but are served only on a ‘space available’ basis.But what about the bigger picture? I call it the ‘uber’ daisy chain: all four types of ad inventory including exclusive, guaranteed, non-guaranteed that’s sold directly, and non-guaranteed that is sold indirectly. How do you optimize all of that? Where should a publisher send the next impression they serve to generate the most revenue possible while keeping their best customers happy? Publishers need a system that looks holistically at all their ad inventory to make sure they make the right decision—and then captures all the information in one dashboard. Otherwise they have to look at different sets of data and sew it all together to understand the whole picture.
  • That’s why at OpenX we’ve worked hard to transform ad serving into Revenue Serving.Publishers need a system that looks holistically at all their ad inventory to make sure they make the right decision—and then captures all the information in one dashboard. Otherwise they have to look at different sets of data and sew it all together to understand the whole picture.
  • With OpenX, publishers can reserve their select inventory and establish tight controls over how it’s sold…that’s why we call it ‘private trading.” Only a short list of buyers—like certain RTB agency trading desks—can access this inventory. And the terms (like pricing, data access, and inventory type) are strictly controlled. This way the publisher avoids channel conflict when selling their most valuable inventory indirectly. Yet they get the benefits of the real-time auction model that drives CPMs up. Plus it automates the sales process.The rest of their ad inventory can be sold through the ‘open’ ad exchange, which has a wider list of buyersOne complete solution for monetizing all classes of ad inventory.
  • Of course, some publishers already have an ad server, and aren’t ready to switch. Good news is that they can still take advantage of our real-time exchange platform for their indirect revenue
  • We spent the last two years building the most advanced ad server that embodies these ideas. Take a look.

paidContent 9.14.11 paidContent 9.14.11 Presentation Transcript

  • Thinking Big About Revenue Management
    September 15, 2011
  • The Problem: Two Systems for Selling
    Online Ads
    Ad Server
    Sold direct
    Sales
    Ad Network #1
    Sold indirectly
    Ad Network #2
    Ad Network #3
    Etc.
  • The Problem: Two Systems for Selling
    Online Ads
    Yield optimizers
    or
    Ad exchanges
    Ad Server
    Sold direct
    Sales
    Sold indirectly
  • Focus on All Your Revenue
    Publisher Ad Revenue
    Example
    Spot Market Sales
    Advertisers buy inventory on spot market
    Sold Indirectly
  • Focus on All Your Revenue
    Publisher Ad Revenue
    Example
    Exclusive Campaigns
    Home Page Sponsorship
    Guaranteed
    Campaigns
    Sold Directly
    Non-Guaranteed
    Campaigns
    Spot Market Sales
    Advertisers buy inventory on spot market
    Sold Indirectly
  • Focus on All Your Revenue
    Publisher Ad Revenue
    Example
    Exclusive Campaigns
    Home Page Sponsorship
    Guaranteed
    Campaigns
    Ad campaign with fixed dates
    Sold Directly
    Non-Guaranteed
    Campaigns
    Spot Market Sales
    Advertisers buy inventory on spot market
    Sold Indirectly
  • Focus on All Your Revenue
    Publisher Ad Revenue
    Example
    Exclusive Campaigns
    Home Page Sponsorship
    Guaranteed
    Campaigns
    Ad campaign with fixed dates
    Sold Directly
    Optimize this!
    Non-Guaranteed
    Campaigns
    Performance based campaigns run on ‘space available’ basis
    Spot Market Sales
    Advertisers buy inventory on spot market
    Sold Indirectly
  • Airline Seat Optimization
  • Revenue Serving
    One holistic platform to optimize all sources of revenue in real time
  • One Integrated Solution
    Benefits
    • Fulfill guaranteed
    • Access new demand (i.e. DSPs)
    • More Control
    • Unified reporting & no discrepancies
    • More revenue!
    Ad Server
    Inventory
    Ad Exchange
    Revenue
  • Two Ways to Play: Ad Server + Exchange
    Buyers
    Ad Server
    Guaranteed
    Private Trading
    Select
    Inventory
    Open Ad Exchange
    All other
    Inventory
  • Two Ways to Play: Exchange Only
    Buyers
    Open Ad Exchange
    Private Trading
    Select
    Inventory
    All other
    Inventory
  • Parting Thoughts
    Think big – about ALL your revenue
    Think control – Max CPM without channel conflict
    Think scale – on flexible platform built to grow
    Come talk to OpenX:
    • Over 4 billion transactions per day
    • Growing at 300%