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Advertising Exchanges - Open the market!

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  • 1. Advertising Exchanges: Open the Market! DFW Interactive Marketing Association March 11, 2008 Jay Sears Senior Vice President, Strategic Products and Business Development ContextWeb, Inc. 917-408-6300 or sears@contextweb.com
  • 2. IAB Conference February, 2008
  • 3. “My Space is Your Space” Wenda Harris Millard Current state is “daunting but exhilarating” IAB Conference February, 2008 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”
  • 4. Brian McAndrews SVP of Advertiser and Publisher Solutions Microsoft, Inc. Former CEO, aQuantive IAB Conference February, 2008
  • 5. “Holy crap!! What now?” Rob Norman, Group M IAB Conference February, 2008
  • 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
  • 7. Media Fragmentation Started in the 1980s 1986 2004 Head of the Class Friends – Series Finale 12.8 Nielsen rating 12.8 Nielsen rating #40 show that year Most‐watched show in 4 years
  • 8. More Choice - The Proliferation of Media 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
  • 9. 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”
  • 10. 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
  • 11. 15-month Trend Line
  • 12. The Long Tail is The Passion Tail 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 TheStreet.com & Cramers-Mad-Money.com FoodNetwork.com & JoyOfBaking.com SI.com & ChicagoHoops.com
  • 13. 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 The Web # of Visits # of Visits om e ge nd al L g gl M r’s ey om O Fu utu in Pa oo t.c s on ad e A .c st M ram ey ee M G e ve om on tr In C eS -m H ad Th m s- er Passion Passion m ra C
  • 14. Offline vs. Online: Time Should Mean Money Online Time Online Money * Forrester Research, 2006 19% 5.8% ** Internet Advertising Bureau
  • 15. Fat Tail vs. Passion Tail Property 2007(est) 1 Google 26% 77% of dollars 2 Yahoo! 15% 3 eBay 8% Size of Sites 4 MSN 7% 5 AOL 7% Pages of Passion 6 Monster 4% 7 IAC 3% 8 Fox Interactive 2% 9 Gannett 2% 10 CareerBuilder 2% # of Sites Passion
  • 16. 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
  • 17. Marketplace Response Branded Sites create Extended Networks Martha Stewart creates Martha’s Circle Reader’s Digest, Forbes, Warner Brothers, Glam Media
  • 18. 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
  • 19. Vertical Ad Networks
  • 20. Marketplace Response – Travel Vertical ComScore February 2008
  • 21. Behavioral Targeting
  • 22. Contextual Targeting
  • 23. 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.
  • 24. 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?
  • 25. Randall Jerry Yang CEO, Yahoo! Rothenberg IAB Sue Decker CFO, Yahoo! IAB Conference February, 2008
  • 26. Randy Falco Chairman and CEO AOL
  • 27. From Brian McAndrews Microsoft, Inc. IAB Conference February, 2008
  • 28. 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 Photo credit: IAB of the outputs we are perfectly entitled to do that too.”
  • 29. Get ADSDAQ-ified: Join ADSDAQ: http://www.ADSDAQ.com Read the Blog! http://blog.contextweb.com ContextWeb: http://www.contextweb.com In Dallas Jay Sears Scott Bowdouris SVP, Strategic Products and Business Senior Account Executive Development 800-452-7967 or 917-408-6300 or sears@contextweb.com sbowdouris@contextweb.com
  • 30. After this slide is all extra / junk for now
  • 31. What Does This Mean to Advertisers? Trends Implications Increasingly fragmented media Need for diverse media mix environment and declining ratings for to generate reach traditional media vehicles The empowered consumer and the Customize message and development of personalized media have a plan that includes emerging technology Standing out amongst the Integrated communication to clutter/competition by seeking out media surround consumer with greater more relevant impact apertures that resonate with consumers
  • 32. The reality of today’s media environment Fragmented audience Decreased media efficiency
  • 33. MEDIA 1 a world of a world of • Broadcast TV LIMITED LIMITED • 9 options options Radio • 8 PUSHED PUSHED Print to mass to mass • 0 consumers consumers Outdoor • CONSUMERS
  • 34. • Broadcast TV • Cable TV • Print • Outdoor MEDIA • Digital Radio • a world of a world of Satellite Radio • 2 INFINITE INFINITE Internet • options options DVRs/VOD 0 PULLED PULLED • IPTV • 1 by individual by individual Video Search • consumers consumers Blogs 0 • Podcasting CONSUMERS • Advergaming • Mobile Phones •
  • 35. The True Exchange Redundant – may be deleted True control for publishers and advertisers through the new exchange model. The Publisher’s Media Inventory Publishers Premium Inventory >>>>> Remnant Inventory Premium D I R Auction True Agency Network Pricing Exchange Exchange E C T Agency Agency Agency Advertisers Advertisers Negotiated ContextWeb Automated 37
  • 36. Online Advertising Marketplace Has Evolved The Publisher’s Media Inventory Premium Inventory >>>>> Remnant Inventory Publishers Premium Control of D pricing has I Auction True Agency Network Exchange R Pricing Exchange been driven by E advertisers. C T Agency Agency Advertisers Negotiated Advertisers ContextWeb Automated

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