S.O.T.I.: The Future of the Programmatic Forward Market

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Jeff Green, CEO and co-founder of The Trade Desk presented the findings of Digiday's State of the Industry survey, which draws on the most influential leaders in digital advertising to offer their …

Jeff Green, CEO and co-founder of The Trade Desk presented the findings of Digiday's State of the Industry survey, which draws on the most influential leaders in digital advertising to offer their assessment of agency efficiency and their evolving role in the creative process.

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  • clarify the langauge:premium guaranteedprogrammatic premium
  • In 1971 the nasdaq was createdSlow evolution, but automated trading. NASDAQ is "the stock market for the next hundred years." Market cap that approaches the NYSE and with them has 95% market shareFirst to go online—which created a new level of scale. WITHOUT THERE COULD NOT BE AT SCALE MUTUAL FUNDS, ETFS.
  • I spoke recently for 15 mins at an event on forward marketdefine spot market: here, priced and transacted at the same time forward market: buying something in advance, bulk of everything done todayspot = rtb (private marketplaces are another form of spot)forward = mostly directbiggest weakness in RTB is that there are no guarantees
  • in 1961 the berlin wall was put up to prevent people in east berlin from immigrating. (other rhetoric was used, but historians and social scientists agree today) prior to its erection, millions had left. 4.5 billion dollars has migrated to rtbbiggest weakness in RTB is that there are no guarantees
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your programmatic budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visability into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you agree that programmatic is more than just RTB the spot market55% of buyers say they are already buying premium via programmaticmost popular response to the question: how long have you bought premium inventory using programmatic? was less than 1 year. most popular response to the question: how much of your digital budget went to programmatic? was 11-20%most popular response to the question: how much of your 2013 prog budget was spent on premium? was 0-10%when did you embrace prog premium? most popular response: in the last yearspending direct decreased in 2013most direct relationships seemed to 5-10 years old, but when asked “are the strength of those relationships an obstacle to programmatic premium 67% said no.”75% of you said you’d use those relationships when selected what to buy programmaticallythe advantage direct has over programmatic is premium inventory (although the decenters said I get nothing out of buying direct)do you have enough visibility into audience targeting with a direct buy: the majority said no.80% of you expect to increase programmatic budget in 2014, more will be spent on premium
  • 90% of you would like to buy guarantteed inventory via programmatic channels. you love efficencyaccurate delivery of audience and scaleyou don’t love guaranteed deliveryone of the most important question we asked: within your company which hurdle to premium programmatic stands (or stood) in the way of its becoming standard practice: lack of understanding, lack of transparency, (others takes time, need new technology, agency conflict). there were a bunch of comments that triangulate to the real problem. price discovery
  • What’s missing? Skepticism. Why? Because the forward market exists now, with great friction and challenge. And because the financial markets have shown us that an automated forward market is not possible, but certain.
  • cost = media costsacquisition: means ping on the thank you page
  • cost = media costsacquisition: means ping on the thank you page
  • cost = media costsacquisition: means ping on the thank you page
  • 1. MOST BUYS WILL START WITH SPOT RTB AND THEN MOVE TO FORWARD(“RTB” TERM GOES AWAY)2. 80% - you are the people. This room is the people that control the pace of adoption. cost = media costsacquisition: means ping on the thank you page

Transcript

  • 1. The Future of the Forward Market The Future of the Forward Market, Q1 2014 White Paper and Survey Results: The Trade Desk and Digiday Jeff Green CEO The Trade Desk
  • 2. THE TRADE DESK IS A BUYERS’ PLATFORM BUILDING BUSINESSES FOR THE NEXT 100 YEARS.
  • 3. The world is changing how it buys and sells the annual $600B in advertising. NEW WINNERS AND LOSERS WILL EMERGE FROM THIS TRANSITION. EVERYTHING OF SIZE WILL BE TRANSACTED DIGITALLY.
  • 4. RTB HAS NO GUARANTEES
  • 5. METHODOLOGY Digiday State of the Industry Survey • 647 digital media and marketing professionals • 35 percent as agencies, 7 percent identified as advertisers, 36 percent as publishers, and 22 percent as none of the above. The 22 percent who responded as none of the above only answered the first series of questions which gave us our baseline of “programmatic” and “premium programmatic” definitions. Analysis consisted of a series of cross-tabulations alongside some basic correlation analysis using both Pearson and Spearman methods. In addition, three qualitative interviews were conducted with programmatic specialists on both the buying and selling sides to confirm or interpret the findings.
  • 6. 90% programmatic is more than just the RTB spot market
  • 7. 55% already buying premium inventory via programmatic
  • 8. 11-20% how much of your digital budget went to programmatic?
  • 9. 0-10% how much of your 2013 programmatic budget went to premium?
  • 10. <1 year when did you embrace programmatic premium?
  • 11. 67% direct buy relationships are not an obstacle to buying premium via programmatic
  • 12. 80% expect to increase 2014 programmatic spending, & increase premium spend
  • 13. SKEPTICISM
  • 14. where the analogy fails no price discovery no current scale in private marketplaces odds of winning are different commodities are all different. every ad is different. utility is very different
  • 15. the answer transacting inventory for a $5,000 cpm for every fence-sitting voter in Ohio the three final days before the election.
  • 16. Scale can only happen when we can apply what we learn at 10k impressions to 100 MM.
  • 17. the solution trump card • uses RTB pipes • run the auction but the trump card bypasses the auction
  • 18. incremental demand 160 DEMAND FOR FUTURE INVENTORY DEMAND FOR CURRENT INVENTORY 140 120 100 80 60 40 20 0 100 MS 1 DAY 1 MONTH 1 QUARTER 2 QUARTERS
  • 19. OUR PREDICTION 80%+ OF FORWARD CONTRACTS WILL INITIATE FROM THE BUY SIDE.
  • 20. THANK YOU for listening