Media Fragmentation and Advertising Exchanges

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    Media Fragmentation and Advertising Exchanges - Presentation Transcript

    1. Advertising Exchanges: Open the Market! Jay Sears Senior Vice President, Strategic Products and Business Development ContextWeb, Inc. 917-408-6300 or [email_address]
    2. IAB Conference February, 2008
    3. “ My Space is Your Space”
      • Current state is “daunting but exhilarating”
      • The “consumer is calling the shots”
      • There are many “strange bedfellows”
      • Let’s sell value, not price
      • Let’s “distinguish between quality and commodity”
      • We “must not trade our assets like pork bellies”
      Wenda Harris Millard IAB Conference February, 2008
    4. Brian McAndrews SVP of Advertiser and Publisher Solutions Microsoft, Inc. Former CEO, aQuantive IAB Conference February, 2008
    5. Rob Norman, Group M IAB Conference February, 2008 “ Holy crap!! What now?”
    6. Ad Exchanges
      • Why Now?
        • Media Fragmentation
      • Current Marketplace Responses
        • Portals, Sites, Ad Networks React
      • What is an Ad Exchange?
        • What Problems are Being Solved
      • Questions to Ask Your Ad Exchange
      • Media Fragmentation Started in the 1980s
      2004 Friends – Series Finale 12.8 Nielsen rating Most-watched show in 4 years 1986 Head of the Class 12.8 Nielsen rating #40 show that year
      • Today, media is fragmented
      • 13,500 radio stations (4,400 in 1960)
      • 17,300 magazine titles (8,400 in 1960)
      • 82.4 TV channels per home (5.7 in 1960)
      • And the Web…
      • Millions of sites
      • Billions of pages
      More Choice - The Proliferation of Media
    7. Where Did Everybody Go?
        • Decreased attention - consumers are tuning out
        • Fragmented audience - there are more places for them to go
        • Proactive advertising avoidance – less ability to be seen
        • Decreased media efficiency – audiences going down, but prices are increasing or holding
        • Increased consumer control - pull vs. push
        • Evolution of a completely new set of consumer habits & expectations
        • Democratization of content – consumers as creators as well as consumers: “Citizens Media”
    8. Media Fragmentation
      • While portals were once the dominant source of news and information, page views on the top 3 portals declined 18% from August 2004 to August 2007 vs. an overall 21% total internet growth in page views.
      • BUT, media spend is still lopsided—over 75% of media spend goes to the top 10 Internet properties
    9. 15-month Trend Line
    10.  
    11. The Long Tail is The Passion Tail
      • TheStreet.com & Cramers-Mad-Money.com
      • FoodNetwork.com & JoyOfBaking.com
      • SI.com & ChicagoHoops.com
      • Consumers use the “Long Tail” to pursue their passions.
      • Brands want passionate users.
      • Passionate users are in the right mindset for a brand message.
      Consumers live their “passion” across sites of all sizes
    12. Pages of “Passion”
      • The “Passion Tail” is composed of pages – not sites.
      • 75% of site entry is a “deep dive” via search.
      The Street.com Home Page Investing Mutual Funds Cramer’s Mad Money Google AOL TheStreet.com Cramers-mad-money.com # of Visits # of Visits The Web Passion Passion
    13. Offline vs. Online: Time Should Mean Money * Forrester Research, 2006 ** Internet Advertising Bureau Online Time Online Money 5.8% 19%
    14. Fat Tail vs. Passion Tail 77% of dollars Size of Sites Passion # of Sites Pages of Passion CareerBuilder Gannett Fox Interactive IAC Monster AOL MSN eBay Yahoo! Google Property 26% 1 15% 2 8% 3 7% 4 7% 5 4% 6 3% 7 2% 8 2% 9 2% 10 2007(est)
    15. Marketplace Response
      • Portals Acquire to Create “Platforms”
        • Yahoo! buys RightMedia ($850M), BlueLithium ($300M)
        • Google buys DoubleClick ($3.1B)
        • Microsoft buys aQuantive ($6.1B), AdECN ($75M)
        • AOL buys Tacoda ($275M), Quigo ($300M) to create Platform A
    16. Marketplace Response
      • Branded Sites create Extended Networks
        • Martha Stewart creates Martha’s Circle
        • Reader’s Digest, Forbes, Warner Brothers, Glam Media
    17. Marketplace Response
      • Ad Networks
        • General networks are in decline
          • Inefficiency
          • Biased
        • Category specialty
          • Adify estimates there are @ 75 niche networks
          • Travel Ad Network, Gay Ad Network
        • Technology specialty
          • Behavioral, contextual
    18. Vertical Ad Networks
    19. Marketplace Response – Travel Vertical ComScore February 2008
    20. Behavioral Targeting
    21. Contextual Targeting
    22. Remaining Issues
      • But there is still FRICTION in the process
        • Paper IOs, faxes, phone calls
        • Lack of control, lack of transparency
        • Ad Exchanges can automate and provide control and transparency to buyer and seller .
      • Where is the Long Tail in these solutions?
        • Portals have no “tail”
        • Branded sites create small networks with limited scale
        • Ad networks are typically “mid-tail” remnant solutions
        • Ad Exchanges can allow Long Tail publishers to participate and control pricing.
      • Where is brand-safe media that can scale for the advertiser?
        • Advertisers that use portals and site specific buys need more reach
        • More brand dollars are coming onto the web
        • Ad Exchanges can allow the advertiser various placement controls.
    23. Questions for Your Ad Exchange
      • Inventory
        • Remnant or premium inventory?
        • Spot market (bided) vs. futures market (reserved inventory)?
        • Safe for brands or direct only?
        • Designed for agency and/or SEM workflow?
      • Pricing
        • Control of pricing for buyer and seller?
        • Pricing models: CPM, CPC, CPA?
      • Targeting available
        • Contextual, behavioral, other?
        • Graphical, rich media, text formats?
      • Publisher types
        • Long Tail and/or large site and/or ad network inventory?
        • Inventory from content sites and/or social media?
    24. Randall Rothenberg IAB Jerry Yang CEO, Yahoo! Sue Decker CFO, Yahoo! IAB Conference February, 2008
    25. Randy Falco Chairman and CEO AOL
    26. From Brian McAndrews Microsoft, Inc. IAB Conference February, 2008
    27. Rob Norman, GroupM
      • “ Today, we plan and trade on behalf of our clients. Tomorrow and in some places today we also trade on our own behalf where we can create value and deserve our place in the chain”
      • “ We charge at the moment for the cost of inputs but again if we charge on the basis of the value of the outputs we are perfectly entitled to do that too.”
      Photo credit: IAB
    28. Get ADSDAQ-ified: Join ADSDAQ: http://www.ADSDAQ.com Read the Blog! http://blog.contextweb.com ContextWeb: http:// www.contextweb.com Jay Sears SVP, Strategic Products and Business Development 917-408-6300 or [email_address]

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