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Total Cost of Ownership webinar
 

Total Cost of Ownership webinar

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Do you know how much you’re really spending to host your own ad server? It may surprise you. Watch this webinar to learn more about the ‘hard’ and 'hidden' costs associated with self-hosting.

Do you know how much you’re really spending to host your own ad server? It may surprise you. Watch this webinar to learn more about the ‘hard’ and 'hidden' costs associated with self-hosting.

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  • Historically many publishers hosted their own ad server, because of the lack of an affordable hosted alternative. Today, cost-effective and customizable hosted alternatives such as OpenX Enterprise do exist, and those same publishers are increasingly switching to these platforms – part of the wider trend towards using cloud-based software-as-a-service such as Salesforce and Google Analytics. However, to a publisher who has steadily increased their investment in a self-hosted ad server over time as their business – and ad impressions – grew, the true cost of running their own ad server may not be fully apparent. Equally, to a new publisher looking to select their first ad server, it may not be clear how the total cost of ownership (TCO) for a self-hosted solution compares to the hosted alternative, and indeed how the costs would scale over time as their impression volume grows. This whitepaper will help publishers to evaluate the TCO of a self-hosted ad server compared to the hosted alternative. First we look at what is needed to self-host an ad server such as OpenX Source or DART Enterprise, factoring in the hardware, software and personnel requirements. We then employ a straightforward pricing model to calculate how the TCO for this self-hosted solution scales with impression volumes. Lastly we benchmark this TCO against the cost of using a fully hosted solution such as OpenX Enterprise, before setting out some final recommendations for publishers looking to perform this exercise themselves.
  • To make this whitepaper as useful to as many different types of publisher as possible, we provide three distinct TCO comparisons, each with a comprehensive range of relevant ad impression volumes
  • Software: only a few commercial-strength ad servers available for installation, on account of the limited value to most businesses of hosting their own ad server. These products include OpenX Source and DART Enterprise, which will be the focus of the self-hosting comparisons in this whitepaper Servers: one or more dedicated physical server, cloud hosted server or virtual private server. Also adding a content delivery network e.g. Akamai, Amazon CloudFront Staff: Systems administration , including setting up the ad server software, maintaining it (e.g. applying all-important security fixes, clearing old logs) and maintaining the servers it runs on Technical user support , providing technical support to the ad trafficking/ad ops team (e.g. responding to questions such as “ why isn ’ t my campaign delivering? ” ) How much time these two roles require will depend on a few factors, including the volume of ads being delivered, the number of ad traffickers to support and the complexity of the site ’ s ad trafficking and targeting setup. Potentially a smaller publisher will have one technical resource juggling both of these roles and also working on other, non-advertising-related tasks. In our model we vary the amount of time a technician spends on these tasks depending on the total volume of ad impressions
  • The geographical distribution of the site ’ s visitors = in particular if they are all in one region, or spread across the world
  • 1. A simple, non-load balanced architecture for a small-to-medium, regional publisher. This assumes multiple ad servers and database servers residing in a single data center 2. A more complex, globally load balanced architecture for a large, multi-regional publisher. This assumes the servers will reside in four data centers across the world (typically US West Coast, US East Cost, Europe, Asia), with global load balancing to distribute traffic to the nearest data center 50m-500m imps 200m-1bn imps 500m-5bn imps
  • Pricing model = a combination of a fixed monthly fee to make a specific volume of requests for impressions, plus an 'overage' fee for any additional ads served, charged on a CPM basis As OpenX Enterprise includes all hosting, bandwidth, security and support costs, benchmarking the OpenX Enterprise TCO is straightforward. For simplicity we treat total requests for impressions as equalling total impressions (i.e. all requests are successfully delivered as impressions), and simply calculate it as follows
  • To calculate the number of servers required, we assume 25m impressions per month per server – this factors in the need for database servers as well as ad servers  To calculate the monthly cost per server we used a Dell Xeon 5520 (16 GB RAM, 8 cores, 2 disks) as our reference server, took the typical cost of this server in the US (Europe and Asia would be 20% more expensive), and then spread these costs out over 3 years to get a monthly cost of $300 per server. This is higher than in the following two scenarios below because at these volumes the back-end servers will never be fully utilized  For the rich media ad serving, we assume 25% of the impressions are rich media with an average size of 200KB, and estimate that the CDN charges $0.04 per gigabyte delivered
  •  To calculate the number of servers required, we assume 25m impressions per month per server – this factors in the need for database servers as well as ad servers. Before applying this ratio, we also upweight the required impressions per month by 40%, to ensure that there is enough over-capacity to continue ad serving should one of the regional centers stop functioning  To calculate the monthly cost per server we used a Dell Xeon 5520 (16 GB RAM, 8 cores, 2 disks) as our reference server, averaged the typical cost of this server in the US, Europe and Asia (in Europe and Asia the server will cost 20% more), and then spread these costs out over 3 years to get a monthly cost of $255 per server  We estimate a monthly cost of $1,200 for the global load balancing  For the rich media ad serving, we assume 25% of the impressions are rich media with an average size of 200KB, and estimate that the CDN charges $0.04 per gigabyte delivered  We assume one systems administrator on a salary of $96,000 is responsible for all DART Enterprise setup and maintenance. We vary their 'utilization' (how much of their time they spend on the ad server) from
  •  To calculate the number of servers required, we assume 25m impressions per month per server – this factors in the need for database servers as well as ad servers. Before applying this ratio, we also upweight the required impressions per month by 40%, to ensure that there is enough over-capacity to continue ad serving should one of the regional centers stop functioning  To calculate the monthly cost per server we used a Dell Xeon 5520 (16 GB RAM, 8 cores, 2 disks) as our reference server, averaged the typical cost of this server in the US, Europe and Asia (in Europe and Asia the server will cost 20% more), and then spread these costs out over 3 years to get a monthly cost of $255 per server  We estimate a monthly cost of $1,200 for the global load balancing  For the rich media ad serving, we assume 25% of the impressions are rich media with an average size of 200KB, and estimate that the CDN charges $0.04 per gigabyte delivered  We assume one systems administrator on a salary of $96,000 is responsible for all DART Enterprise setup and maintenance. We vary their 'utilization' (how much of their time they spend on the ad server) from 30% at 500m to 100% at 5bn

Total Cost of Ownership webinar Total Cost of Ownership webinar Presentation Transcript

  • Total cost of ownership How much are you really spending to host your ad server? Presented by Alexander Dean, Principle, Keplar, LLP Twitter Hashtag: #OXwebinar
  • Total cost of ownership (TCO)
    • What is required to host your own ad server?
    • What is the true cost of hosting your own ad server?
    • How does this cost compare to a fully hosted solution such as OpenX Enterprise?
    09/30/11 Total cost of ownership #OXwebinar
  • We cover three distinct TCO comparisons, each one focusing on a different-sized publisher 09/30/11 Size of publisher Self-hosted ad server Hosted ad server Impression range vs Small, regional OpenX Source OpenX Enterprise 50m-500m Medium, regional DART Enterprise OpenX Enterprise 200m-1bn Large, multi-regional DART Enterprise OpenX Enterprise 500m-5bn Total cost of ownership #OXwebinar
  • Anatomy of a self-hosted ad server
    • There are three key building blocks to hosting your own ad server:
    09/30/11 Software Servers Staff The ad server software needs to run on one or more servers (either dedicated, cloud or VPS) The ad server will need a systems administrator and some form of technical user support Using one of the few installable commercial-strength ad servers (incl. OpenX Source and DART Enterprise) Total cost of ownership #OXwebinar
  • Putting it all together
    • The exact number and setup of servers will depend on various factors, most importantly:
    09/30/11 The geographical distribution of the site ’s visitors The volume of ad impressions to serve, including peak volumes Total cost of ownership #OXwebinar
  • Our three different TCO scenarios are based on two distinct technical architectures 09/30/11 Total cost of ownership #OXwebinar on a simple, non-load balanced architecture on a complex, globally load balanced architecture A small, regional publisher 1 using 2 A medium sized, regional publisher using 3 A large, multi-regional publisher using
  • Our benchmark: OpenX Enterprise
    • For each of our TCO comparisons we will use OpenX Enterprise as the benchmark:
    09/30/11 Total cost of ownership #OXwebinar
  • How we calculated the TCO for a small, regional publisher using OpenX Source
    • To calculate the cost of a self-hosted, non-globally load balanced OpenX Source ad server we used the following inputs:
    09/30/11 Software Servers Staff
    • Assume 25m impressions / month / server
    • Assume each server costs $300 / month
    • Assume 25% of impressions are rich media
    • Assume one technician paid $87,000 / year
    • How much time spent on ad server varies from 50% to 60% based on volume
    • OpenX Source is free, so no cost here
    1 Total cost of ownership #OXwebinar
  • Comparing this TCO to OpenX Enterprise
    • The monthly cost of self-hosting OpenX Source scales linearly, and is 41%-225% more expensive than OpenX Enterprise:
    09/30/11 1 Total cost of ownership #OXwebinar
  • How we calculated the TCO for a medium sized, regional publisher using DART Enterprise
    • To calculate the cost of a self-hosted, non-globally load balanced DART Enterprise ad server we used the following inputs:
    09/30/11 Software Servers Staff
    • Assume 25m impressions / month / server
    • Assume each server costs $230 / month
    • Assume 25% of impressions are rich media
    • Assume one systems administrator utilised 25%-35% paid $96,000 / year
    • Assume one technical support operative utilised 25%-35% paid $78,000 / year
    • DART Enterprise costs $250k or $9,600 / month over 3 years
    2 Total cost of ownership #OXwebinar
  • Comparing this TCO to OpenX Enterprise
    • The monthly cost of self-hosting DART in a regional setup scales linearly, and is 232%-46% more expensive than OpenX Enterprise:
    09/30/11 2 Total cost of ownership #OXwebinar
  • Large, multi-regional publisher using DART Enterprise: how we calculated the TCO
    • To calculate the cost of a self-hosted, globally load balanced DART Enterprise ad server we used the following inputs:
    09/30/11 Software Servers Staff
    • Assumptions as in scenario 2, but add:
    • Upweight required impressions by 40% to handle one regional center falling over
    • Assume $1,200 / month for global load balancing
    • Assume one systems administrator utilised 30%-100% paid $96,000 / year
    • Assume one technical support operative utilised 30%-100% paid $78,000 / year
    • DART Enterprise costs $250k or $9,600 / month over 3 years
    3 Total cost of ownership #OXwebinar
  • Comparing this TCO to OpenX Enterprise 09/30/11 The monthly cost of self-hosting DART globally scales linearly, and is 165%-37% more expensive than OpenX Enterprise: 3 Total cost of ownership #OXwebinar
  • Our benchmark: OpenX Enterprise
    • 41-255%
    09/30/11 The monthly costs of self-hosted ad serving are significantly higher than hosted OpenX Enterprise in all three of our TCO comparisons: 46-232% 37-165% Total cost of ownership #OXwebinar A small, regional publisher 1 using 2 A medium sized, regional publisher using 3 A large, multi-regional publisher using
  • There are some other key differences between self-hosting and hosted adserving 09/30/11 The self-hosted setups have several limitations which are not highlighted in a straightforward TCO comparison Redundancy Security Functionality Malware groups use out-dated, unpatched self-hosted ad servers to distribute malware Self-hosted OpenX Source does not have all of the plugins (e.g. forecasting, advanced analytics) found in OpenX Enterprise No global load balancing / spare capacity in our first two scenarios – one data center means a single point of failure Total cost of ownership #OXwebinar
  • Given the cost comparisons and other qualitative issues, we recommend that publishers use a hosted ad server solution such as OpenX Enterprise 09/30/11 Total cost of ownership #OXwebinar