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

1. The New Online Ad Ecosystem
By Olivier de La Mesliere, Venture Partner
Olivier@Leonardoventures.com

2. The Online Advertising Legacy Ecosystem…
Users
Websites
Networks
Agencies
Advertisers

3. What Has Changed?

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. 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. 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. 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.

9. And Now?

10. New Entrants Help Advertisers Buy

11. Future Buying Media Platform
Will Focus on the
Global Advertising Reach

12. 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

13. 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…

14. 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
$
$ $
$
$
$

15. Display drives Search:

16. Display leverages Offline Purchase

19. 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)

20. 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…

21. 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.