Media Buying Platform Ecosystem

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A snapshot of the new online advertising ecosystem that developed in 2009: what should be expected from the Media Buying Platforms, the latest player in the online ad food chain...
A Leonardo Ventures presentation by Olivier de La Mesliere

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Media Buying Platform Ecosystem

  1. 1. The New Online Ad Ecosystem By Olivier de La Mesliere, Venture Partner Olivier@Leonardoventures.com
  2. 2. The Online Advertising Legacy Ecosystem… Users Websites Networks Agencies Advertisers
  3. 3. What Has Changed?
  4. 4. Date of % Raised Total funding Past 3 Years Network first in past 3 (in millions) (in millions) funding years 1 Glam Media $124 July '04 $95 76% 2 3 Specific Media Adconion Media Group $110 $86 June '06 Jan. '05 $100 $85 91% 99% 1. Networks 4 5 AudienceScience (Revenue Science) Federated Media $74 $57 March '00 June '05 $0 $55 0% 95% Got Financed 6 ContextWeb $52 June '04 $40 77% 7 Gorilla Nation $50 May '07 $50 100% 8 IGA Worldwide $48 Oct. '05 $30 62% 9 Adknowledge $48 March '06 $0 0% 10 11 AdMob Tremor Media $47 $40 Sept. '06 Sept. '06 $43 $40 92% 100% Over 60 Ad Networks 12 13 Undertone Networks Turn $40 $38 March '08 Jan. '05 $40 $23 100% 61% Received b$1.5 in VC 14 Double Fusion $37 Aug. '04 $26 71% 15 AdBrite $35 Sept. '04 $23 66% Money in the past 5 16 VideoEgg $34 April '05 $30 88% 17 Kontera $33 July '06 $33 100% years 18 Vibrant Media $32 July '00 $0 0% 19 Heavy.com $30 Dec. '05 $20 67% 20 Quattro Wireless $28 May '07 $28 100% 21 Grab Network $27 Feb. '05 $19 70% 22 Ripple $26 Aug. '06 $26 100% + $250m invested in 23 Collective Media $25 Oct. '07 $25 100% 24 Adap.tv $24 Jan. '07 $24 100% acquired networks 25 Lotame $23 Feb. '08 $23 100% (Tacoda, Blue Lithium…) Top 10 Total funding $697 $497 Average funding $70 $50 Top 25 Total funding $1,168 $878 Average funding $47 $35 All Total funding $1,491 $1,139 Networks
  5. 5. 2. Networks Became Smart Network / Techno. Reach Affiliation Advertising.com 155 m unique AOL Tacoda monthly visitors $275m, July 2007 Acerno 140 m shoppers 100% Akamaï Proprietary $95m, Oct 2008 ValueClick Media 130 m unique Private Proprietary monthly visitors BlueLithium 129 m unique 100% Yahoo! Proprietary monthly visitors $300m, Sept 07 Adconion 142 m unique Private BlueKaï monthly visitors
  6. 6. 3. Networks Transformed • From aggregating Publishers’ inventory to selling targeted inventory & audience segments to marketers • Networks’ targeting capacity increasingly supplant Agencies’ planning function (!) • Networks increasingly appear positioned as Specialist Media Buyers, often directly competing with Ad Agencies…
  7. 7. 4. Ad Exchanges Emerged Ad exchanges provide marketplace efficiencies between buyers (advertisers/agencies) and sellers (publishers & networks) The first ad exchanges were AdECN ( purchased by Microsoft in August, 2007), Right Media ( purchased by Yahoo! in April 2007), and DoubleClick Ad Exchange (owned by Google since May 2007) Next Gen Ad Exchanges are about Premium inventory, and Real-Time Bidding full features.
  8. 8. And Now?
  9. 9. New Entrants Help Advertisers Buy
  10. 10. Future Buying Media Platform Will Focus on the Global Advertising Reach
  11. 11. Future Media Platforms Will… • compare campaigns across vendors and channels • understand which campaigns are driving customer acquisition • account for the multiple advertising contacts made prior conversion
  12. 12. Take the Whole Media « Buy » into Account to Improve Performance • Advertising builds sales over time: Brands reach customers at multiple times, across multiple channels, both online and offline, over extended periods of times… • Display drives Search… • Display leverages Offline Purchase…
  13. 13. Advertising builds sales over time: The “Last Ad” Standard The Reality – Last Ad Clicked Campaigns reach consumers multiple times, across – Last Ad Viewed multiple channels, over extended periods of time Banner Rich Media & Banner Banner Search Yahoo Sponsorship MSN CNet Sky Sports Google $ $ $ $ $ $
  14. 14. Display drives Search:
  15. 15. Display leverages Offline Purchase
  16. 16. A Media Buying Vision • Automate the media-planning process • Collect proprietary data when ad is displayed • Map the Lifetime Ad Exposure user by user, across multiple channels, online & offline, to derive efficient retargeting and Conversion Optimization Model • Adjust the Buying process* dynamically according to the Ad Exposure Multidimensional Map (*Both Ad Allocation & Price)
  17. 17. A Consistent Display of Ads The Media Buying Platform should take into account all prior advertising contacts to decide: 1. which Ad a user should view next to maximize impact 2. how much the brand should spend on such Ad at this specific occurrence of the Ad Exposure Sequence for this user profile…
  18. 18. Business Models Media Buying Platforms could 1. provide their Media Buying services on a Freemium basis to Agencies & Marketers 2. buy media on behalf of Agencies on a commission 3. gradually evolve to an Arbitrage model as the gap between market price and assessed spot values creates profit opportunity.

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