Advertising Exchanges: Open the Market!
DFW Interactive Marketing Association
March 11, 2008
Senior Vice President, Strategic Products and Business Development
917-408-6300 or firstname.lastname@example.org
“My Space is
Wenda Harris Millard
Current state is “daunting but exhilarating” IAB Conference
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”
SVP of Advertiser and
Former CEO, aQuantive
Rob Norman, Group M
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
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
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
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 &
• Democratization of content – consumers as creators as well as
consumers: “Citizens Media”
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
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
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
Offline vs. Online: Time Should Mean Money
Online Time Online Money
* Forrester Research, 2006
19% 5.8% ** Internet Advertising Bureau
Fat Tail vs. Passion Tail
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
Portals Acquire to Create “Platforms”
Yahoo! buys RightMedia ($850M), BlueLithium
Google buys DoubleClick ($3.1B)
Microsoft buys aQuantive ($6.1B), AdECN
AOL buys Tacoda ($275M), Quigo ($300M) to
create Platform A
Branded Sites create Extended Networks
Martha Stewart creates Martha’s Circle
Reader’s Digest, Forbes, Warner Brothers, Glam Media
General networks are in decline
- Adify estimates there are @ 75 niche networks
- Travel Ad Network, Gay Ad Network
- Behavioral, contextual
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
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.
Questions for Your Ad Exchange
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?
Control of pricing for buyer and seller?
Pricing models: CPM, CPC, CPA?
Contextual, behavioral, other?
Graphical, rich media, text formats?
Long Tail and/or large site and/or ad network inventory?
Inventory from content sites and/or social media?
From Brian McAndrews
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.”
Join ADSDAQ: http://www.ADSDAQ.com
Read the Blog! http://blog.contextweb.com
Jay Sears Scott Bowdouris
SVP, Strategic Products and Business
Senior Account Executive
917-408-6300 or email@example.com
What Does This Mean to Advertisers?
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
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
The reality of today’s media
Decreased media efficiency
1 a world of
a world of •
to mass •
a world of
a world of Satellite Radio
1 by individual
by individual Video Search
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
R Auction True
Agency Network Pricing Exchange Exchange
Online Advertising Marketplace Has Evolved
The Publisher’s Media Inventory
Premium Inventory >>>>> Remnant Inventory Publishers
Control of D
pricing has I Auction True
Agency Network Exchange
R Pricing Exchange
been driven by E