RTB & DSP decoded


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RTB & DSP decoded

  1. 1. a WHITEPAPER from MEDIAPLEX RTB & DSP DECODED By David A. Yovanno President, Mediaplex ValueClick, Inc. (NASDAQ: VCLK)
  2. 2. PG.01 NTRODUCTION I PG.02 NDERSTANDING RTB DSP U PG.02 RTB Versus Traditional Media Planning and Buying PG.03 Different Advertisers, Different Audience Values PG.04 Why Publishers Use RTB PG.05 Empowering the DSP–It Takes Data PG.06 Automatic Bidding–Billions of Times Per Day PG.06 Learning and Dynamic Optimization PG.07 RTB and DSP Benefits PG.08 A Couple Things to Consider PG.09 QUESTIONS TO ASK AS YOU CONSIDER RTB AND DSP VENDORS PG.09 1. Is RTB Right for Your Brand? PG.10 2. Should You Choose A Self-Serve Platform of a Managed DSP Service? PG.12 3. Is the DSP’s Primary Focus on First or Third Party Data? PG.13 4. Can the Solution Meet Your Brand Safety Standards? PG.14 5. Does the DSP Offer Access to ALL of the Leading Exchanges? PG.14 6. Does the Vendor Have a Commitment to Service After the Sale? PG.15 CONCLUSIONS PG.15 ABOUT THE AUTHOR PG.16 ABOUT MEDIAPLEX RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM
  3. 3. INTRODUCTION Marketer interest in real-time-bidding (RTB) and demand side platforms (DSPs) has exploded over the last several years. A recent Forrester report stated that 46% of US marketers are already investing or planning to invest in RTB. By 2017, Forrester predicts that 30% of US Display media will be purchased via RTB,i and I predict it will be over 50%. Today there are dozens of exchanges and DSPs vying for your business. Yet arguably the industry has done an inadequate job of truly educating strategic marketers about their value and situational relevance. “ y 2017, Forrester B predicts that 30% of US Display media will be purchased via RTB,i and I predict it will be over 50%.” For marketers less familiar with RTB and DSPs, the space can feel a bit confusing. This whitepaper is designed to help bring clarity to the space and outline some questions to consider as you explore whether RTB and DSP-based buying are right for you and your brand, and which DSP approach and vendor might make the most sense for your brand’s unique situation. “ he industry has done T an inadequate job of truly educating strategic marketers about RTB and DSPs.” i The whitepaper begins with an explanation of RTB and DSPs, their benefits, and their drawbacks. From there, we move into a discussion of questions to ask yourself as you consider the relevance of RTB and individual DSP vendors. Forrester: Digital Media Buying Forecast – 2012 to 2017 RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 01
  4. 4. UNDERSTANDING RTB AND DSP Trying to get a handle on real-time-bidding and demand side platforms? You’re not alone. While RTB is complex, it presents a massive opportunity for advertisers. As one of the fastest growing categories in digital, it is well worth your time to understand. RTB VERSUS TRADITIONAL MEDIA PLANNING AND BUYING In a nutshell, RTB represents a major evolution in the buying and selling of digital media. Prior to the advent of RTB, digital display and video ads were generally bought using the “traditional” media buying model. In this traditional approach, which is still in widespread use today, impressions are purchased in advance in bundles of thousands or millions, at a fixed price. That price is agreed upon by the buyer and seller based on a variety of factors. Agreements are typically executed in the form of a signed insertion order and the commitment typically spans weeks or months. In traditional media buying the seller is primarily responsible for the selection of the purchased impressions. With RTB, the advertiser evaluates and bids on individual ad impressions as they are about to occur. In this new model, publishers make their ad impressions available on auctionbased media exchanges. Brands can buy those impressions directly through the exchange UIs, but most prefer to use tools called demand side platforms (DSPs) to empower their bidding. DSPs offer three key advantages over buying directly through exchange UIs: “ ith RTB, the advertiser W evaluates and bids on individual ad impressions as they are about to occur.” • hey enable global ad frequency capping across exchanges which improve campaign T efficiency and user experience. • hey empower brands to leverage their own data for targeting. T • hey make it easy to apply sophisticated algorithms for bid optimization. T The exchanges allow DSPs to access the inventory directly through APIs. A DSP is a management and optimization platform that aggregates many RTB APIs (both from direct publishers and exchanges), uses data and optimization to make bid decisions, and then executes the bids. Bid prices depend on the characteristics of the impression being bid on. This includes site and context variables as well as, and perhaps more importantly, attributes of the viewer about to be exposed to the ad. By evaluating information about the RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. “ id prices depend on B the characteristics of the viewer about to be exposed to an ad.” MEDIAPLEX.COM 02
  5. 5. impression the advertiser can determine how attractive it is before deciding whether to bid on it. The advertiser only bids what they think reaching that particular individual is worth, and if they are the highest bidder for the ad space, their ad is displayed. This all takes place as a site page is loading, hence the name “real-time bidding.” And unlike traditional media buying:  • here is no order commitment by the advertiser beyond the impression’s bid price T • here are no signed insertion orders with individual publishers, but rather one master T agreement executed with an ad exchange. DIFFERENT ADVERTISERS, DIFFERENT AUDIENCE VALUES RTB uses an auction-based pricing model somewhat analogous to Google Paid Search. Auction participants place bids on a particular impression, and the highest bidder gets to show their ad. Different advertisers might place very different values on reaching a particular individual. Let’s illustrate this with an example. Suppose that the following six facts were known about the web visitor: • Female • 25-34 • High Income • New Mom • Looking to Buy a Car in the Next 30 Days • Currently browsing her favorite lifestyle website Now, let’s consider the appeal of this web visitor to three different brands: • Cosmetics Brand • Diaper Brand • Car Brand By examining the known information about this web visitor, we can make some guesses about how much each brand might bid to reach her. Let’s start with the cosmetics company. For the cosmetics firm, the relevant facts that we know about the would-be viewer are that she is young, female, and high income. Clearly, young and rich are good qualities for a cosmetics customer generally. However, we don’t know if she buys a lot of makeup, or buys her makeup in a store where that cosmetics RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 03
  6. 6. company’s products are available. The advertiser does not know for certain whether she is a likely buyer of their products, but does know she has some desirable qualities. As a result the cosmetics firm might bid relatively low for the impression, because they are unsure if she’s a great prospect. Moving on to the diaper brand, it’s clear from the profile above that she may be a great prospect. She’s a new Mom, so there is an opportunity to sell her a lot of diapers in the years to come. Therefore, they would likely bid higher than the cosmetics company, because her possible value to their business is much higher. Finally, the car brand might view this in-market car buyer as an excellent prospect. And because the profit margin is high on cars, getting her to buy THEIR brand would be worth a lot of money. This would likely lead the car brand to bid more for the impression than either the diaper or cosmetic company. If these three organizations were the only three bidders on our female web visitor, the car company would likely win the auction and have their banner display when the web page loads. “In reality, brands might measure hundreds of userspecific attributes against several different conversion types to predict the value of an impression...” Please understand that this is a drastic oversimplification of RTB. Here our example looks at 6 attributes and their likely correlation to a retail sale. In reality, brands might measure hundreds of user-specific attributes against multiple different conversion types to predict the value of an impression in real-time. For example, a brand may optimize towards multiple measurable metrics like site visits, CRM email joins and/or actual product purchases, and may incorporate hundreds of demographic, contextual, and behavioral variables to identify ideal prospects and determine their optimal bid price. But the basic principle – that an impression delivered to a particular individual has different values to different brands – is the most important idea to come away with here. WHY PUBLISHERS USE RTB The RTB model enables a publisher to sell its impressions based upon the precise value of its audience. Publishers choose to work with exchanges for a variety of reasons: • ome websites use the exchanges and ad networks to sell their entire advertising S inventory, in lieu of hiring a sales force. For niche websites this can make a lot of sense because their impressions can more easily get “on the radar” of a DSP than trying to sell directly to a media planner. RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 04
  7. 7. • ther sites find that the quality of audience segments O can drive bid prices that are higher than they can get for their general audience. For example, a publisher with an Auto section may find that it can sell its Auto enthusiast site visitors for a high price on the exchanges. • till other publishers find it impossible to sell their S entire inventory through the traditional buying model. They use RTB as well as ad networks to monetize unsold inventory. “ ublishers are beginning to P recognize that some media buyers simply don’t want to interact with salespeople – they prefer a buying method that is automated.” In short, RTB gives publishers another avenue to make money, the opportunity to increase their yield and the flexibility to try new approaches. Many ad networks have responded by accessing some or all of their inventory through the exchanges versus via direct negotiations with sites. I also believe that publishers are beginning to recognize that some media buyers simply don’t want to interact with salespeople – they prefer a buying method that is automated. Just as some consumers prefer to buy airline tickets without the help of a travel agent, so too do some media buyers just prefer to get on with it and skip the salesperson interaction. RTB helps publishers sell inventory to this growing group. EMPOWERING THE DSP – IT TAKES DATA Participating in RTB requires a tool that can process massive data sets and calculate bids against billions of impressions in real time. These tools are called demand side platforms, or DSPs. The DSP enables you to set campaign rules and assess the value of impressions based upon the context of the impression and the characteristics of the viewer. “A DSP enables you to set campaign rules and assess the value of impressions based upon the context of the impression and the characteristics of the viewer.” A DSP determines the users a brand should bid on and identifies media impressions that will reach these types of users. Obviously the goal is to message people who are most likely to become customers. In order for a DSP to do this successfully it requires direction in the form of data. First, you need to develop a desirable audience profile. Your brand may have a great deal of research as to who its customers are. Such a profile might include measures like gender, age, family status, income, etc. RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 05
  8. 8. Then you need information to determine whether the impressions you might bid on will reach your target audience. To do this you need real-time data about the particular viewer who would be seeing your ad. That data can come from two kinds of places: it can be your own customer data (first party data,) or it can be purchased (third party data.) The advantages of using “first party” customer data for your campaign are that it is free, but more importantly that it is proprietary and specific to your brand. Exclusive access to this data gives you a competitive advantage against other bidders because it reflects insights that only you have. The challenge is that many brands lack the underlying end-to-end data infrastructure necessary to make that data available to the DSP. The other option is third party data, purchasable from a variety of data resellers. Third party data is purchased on a CPM basis, similar to most digital media. The data is readily available for purchase, but the challenges are that it can be costly and that everyone else has access to it and may be incorporating it into their models. “ our first party data Y gives you a competitive advantage against other bidders because it reflects insights that only you have.” AUTOMATIC BIDDING – BILLIONS OF TIMES PER DAY Naturally, brands are not manually deciding what to bid on every impression as they occur. All this evaluating and bidding has to take place in milliseconds using advanced DSP technology. Brands can input campaign parameters and a maximum bid value for the prospects that interest them. DSPs calculate a bid price for an impression in a fraction of a second. Their bid is matched against other bids in the exchange. A winner is determined and the winner’s ad is served on the page. All this occurs almost instantaneously, so that there appears to be no DSPs are constantly learning delay in loading the page on the consumer’s screen. The computing power required to accomplish this has only ‘what works’ by identifying become available in the last few years. “ LEARNING AND DYNAMIC OPTIMIZATION DSPs aren’t just bid management tools. Rather, they are constantly learning “what works” by identifying the relative effectiveness of different user characteristics in order to optimize your bidding strategy. This learning helps them adjust RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. the relative effectiveness of different user characteristics in order to optimize your bidding strategy.” MEDIAPLEX.COM 06
  9. 9. the weighting they place on each audience characteristic in order to drive maximum performance. That means that over time, a DSP is getting better and better at setting appropriate bidding prices for your best prospects. Because different DSPs have different algorithms and different access to data, some might perform better or learn faster for your brand than others. RTB AND DSP BENEFITS DSPs make genuine individual impression buying a reality. Advertisers can now opt to buy individual impressions versus blocks of media. The DSP allows an advertiser to calculate and bid the true value of a web user for their business. While the level of targeting sophistication varies from DSP to DSP, it is generally robust. Using traditional buying methods, brands often use indexing as a means of identifying the best prospects for their messages. So, for example, if you wanted to target men, you might choose a sports site, which has a high composition of male readers. But there are also female readers on the sports site. That is just one instance where allocating dollars purely by site and context leads to waste. Most DSPs have access to a number of third party data providers. While the majority of data providers focus on identifying individuals with particular interests and behaviors, there are also data providers that can provide contextual data on the thousands of sites that sell inventory on the exchange. You can layer this contextual knowledge onto audience insights so that your ads reach the people with characteristics you value on content related to your category. With RTB, you can often get very competitive pricing on high quality inventory. This efficiency is a key reason for the high growth rates in RTB. But one key to the success of RTB is that the focus is on the user, so that it is possible to reach an individual on sites with highly attractive pricing. “DSPs also offer many forms ” DSPs also offer many forms of transparency. Using a DSP you can quickly identify the best performing targeting data, of transparency. contextual environments, and the like. Further, because the platforms often offer algorithmic optimization, you may learn about effective targeting characteristics you’ve never considered before. DSPs also offer you visibility into what sites and user attributes performed best. Note, though, that a relatively small number of pubs do not reveal their brands out of fear that they might cause channel conflict with their traditional sales channel. RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 07
  10. 10. Unlike traditional buying models, with RTB you can change your buying parameters in real-time to optimize more quickly and leverage learnings across a greater proportion of your spend. A COUPLE THINGS TO CONSIDER There are a few things you need to be aware of before you choose to purchase media via a DSP. First, with RTB, you need to be more flexible with regard to the sites that your messages will appear on, versus buying sites individually. In order to get the maximum pricing and optimization benefits, you cannot limit your buy to a small handful of publishers. The idea behind working with a DSP is that you are buying a user, not a publisher environment. Your impression may appear on leading sites as well as niche sites. You have the ability to avoid advertising on a set of sites, and to limit your buy to a certain category of sites, like Travel. But in order to unlock the full value of RTB you should be open to buying your target audience across a fairly broad set of sites. Second, you are somewhat limited in the types of creative units that are available through the various exchanges. While the list of available formats is slowly growing to include more rich media, video and mobile units, the majority of RTB inventory is in IAB standard sizes (e.g., 728x90, 160x600, and 300x250.) Third, it is OK to lose an impression auction. RTB performance is not a function of the number of ads delivered. RTB is about bidding the right price based upon an impression’s value to your brand. If you have confidence in your algorithm, you should feel secure in the fact that you are only running ads in placements that are a good value given the characteristics of the users seeing them. Finally, some publishers hold back some of their best inventory for direct sale or ad network sale only. Front page ads, for example, may not be available from certain publishers via RTB, while other pages may be available. Many brands find this tradeoff completely acceptable because their focus is on the user, not the page. Where necessary, they can go publisher-or network-direct for super premium page inventory and rely on the exchanges for user-based buying. But if you want front page inventory only, RTB might not be for you with regard to that kind of placement. If you’ve decided that RTB may make sense for you, it’s important that you know what to look for. There are more than two dozen vendors currently offering DSP services. Consider the following questions as you evaluate your alternatives: RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 08
  11. 11. QUESTIONS TO ASK AS YOU CONSIDER RTB AND DSP VENDORS 1. Is RTB right for your brand? 2. Should you choose a self-serve platform or managed DSP service? 3. Is the DSP’s primary focus on first or third party data? 4. Does the DSP solution meet your brand safety standards? 5. Does the DSP offer access to all of the leading exchanges? 6. Does the vendor have a commitment to service after the sale? Let’s examine each of these individually. 1. IS RTB RIGHT FOR YOUR BRAND? RTB is a distinctive approach to media purchasing that is most relevant for when a brand: • Buys a great deal of online media across many sites • uns a great deal of “IAB standard units” like 728x90s, 300x250s, and 160x600s R • s committed to the efficiency of user-based media buying I • as concrete, measurable goals (direct response or branding goals) against which a H program can be optimized Generally, RTB is more relevant for medium-sized or large brands. The more sophisticated your approach to advanced targeting methodologies, the better the fit with RTB. Similarly, companies with a comprehensive data strategy tend to benefit more from RTB because of the value of using first party data in targeting. RTB is less appropriate for when a brand: • Buys very little digital display or video media • Buys solely on a few sites • ocuses on custom units and experiences versus standard units and sizes F • Prefers indexing-versus user-based targeting If more than one of those characteristics apply to you, it may be prudent to forego RTB until your programs change. If you work on the agency-versus the brand side, RTB may make sense as a way of serving RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 09
  12. 12. clients that wish to deploy an audience-based buying strategy. A full service or managed DSP offering enables an agency to reap the benefits of RTB for its clients without hiring a team or altering its accounting and billing processes. Also, the largest agency holding companies have created their own in-house “trading desks” to manage RTB buying across many clients. 2. HOULD YOU CHOOSE A SELF-SERVE S PLATFORM OR A MANAGED DSP SERVICE? “ managed DSP service A enables an agency to reap the benefits of RTB for its clients without hiring a team or altering its accounting and billing processes.” Once you’ve decided RTB is right for your brand, your first decision is how you want to access DSP capabilities. Here you have two choices: • hoose a Self-Service DSP platform. In this use case, you would buy access to C a platform and then hire a staff of people to use it. While some DSPs have sleek dashboards that make it appear easy to manage a DSP program, the reality is that DSPs are NOT easy to use well. There is a high degree of sophistication necessary to create the targeting and business rules that will truly optimize your programs. The person (or people) who runs the DSP will need to be trained in the particular DSP you choose. It is recommended that brands and agencies that choose to operate their own “trading desk” staff the appropriate statisticians and analysts required to develop sophisticated bid optimization and attribution models in order to be competitive in the RTB marketplace. Keep in mind that these are real media dollars being spent every minute, so you want experts making optimization decisions. • se a Full-Service or Managed DSP. Some companies (including Mediaplex) offer U DSP-based buying without the need for you to staff and manage the tool yourself. Under the managed model, the media partner staffs and operates the DSP on your behalf. You can purchase media using an IO rather than making a long term commitment to a particular platform. All buying, serving, reporting, and optimization are executed by the vendor, freeing your team to focus on more mission-critical strategic challenges. While not all managed DSP vendors provide the same level of consultation, customization and service, many advertisers choose a managed service because the vendor is capable of executing more advanced RTB strategies. The most sophisticated vendors will be able to assist a brand in developing a custom data strategy, will have RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 10
  13. 13. the technology and services to support data tracking and management, and will help develop brand specific data models for more accurate bid optimization and attribution. Before selecting a managed DSP vendor be sure to determine if they have “one-sizefits-all” models baked into their software and if they can truly provide consultative data management support. The decision on whether to do-it-yourself or choose a managed solution is an important one. Many of the DSP companies strongly prefer that customers buy the technology and staff it themselves while providing minimal support. This is in large part because these companies are funded via venture capital. VC firms favor technology over service business models because they are valued higher and offer greater potential profit if/when the company is acquired or goes public. A technology company increases margin with every added installation of their product with very little increase in costs. Technology businesses can be valued at 10+X revenue for example, while media/services companies can be valued at 10+X profit. With service businesses there is a more direct relationship between the size of the business and its operating costs. More accounts mean more people and more expense. While providing a managed service runs counter to VC goals, service businesses often make more sense for brands and agencies. “ elatively few brands are R actually leveraging a selfserve solution to any degree of scale.” When you speak to various DSP providers you may find that some have a strong desire to sell you a self-serve platform. The reality of the marketplace is that relatively few brands are actually leveraging a self-serve solution to any degree of scale. Most have chosen a managed DSP offering. A big reason for this is the complexity involved in collecting and managing data, as well as in effectively applying this data towards bid optimization and measurement. All these things are essential to effective use of a DSP. Self-serve platform providers can be a good option for companies that have: • A core competency in media buying already • dded new resources recently with advanced skills in statistics A • commitment to maintaining an internal media buying organization over the long haul. A For example, a number of very large companies buy all of their media “in house” – for such businesses a self-serve DSP warrants consideration. In addition, several of the large agency holding companies have created DSP divisions to manage RTB advertising buys across their agency brands. These organizations have committed to staffing experienced media traders that RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 11
  14. 14. are capable of fully maximizing the benefit of a DSP. The decision to hire these expert media traders depends heavily on an organization’s level of digital sophistication and investment. For most companies, a managed solution is probably preferable. First, there is no need to hire DSP experts or incur training costs to get them competent on a particular DSP platform. Even a relatively modest DSP deployment will require at least one full time employee to staff it. Larger programs will necessitate an entire team to manage efforts. Some companies have tried to staff DSP installations with existing media planners and buyers but the skill sets are actually rather different. It can require significant time and expense to get them trained adequately. Companies with a managed DSP offering have the staff and expertise already. Further, a managed DSP typically works on an insertion order basis, much like in a traditional media buy. The brand and DSP provider develop a campaign buy outlining estimated impressions and targeting strategies. Then the DSP team executes on the brand’s behalf. In this model, a brand’s existing accounting and reporting structures require little or no modification. Whichever way you go, it’s important that you minimize the number of DSPs you work with. The reason is that if you use more than one DSP you may actually be bidding against yourself for inventory, which artificially inflates its cost. 3. S THE DSP’S PRIMARY FOCUS ON FIRST I OR THIRD PARTY DATA? “f you use more than one I DSP you may actually be bidding against yourself for inventory, which artificially inflates its cost.” In order for a DSP to work it needs access to lots of audience data. Some data is provided by the RTB source; however, you ideally need to use either your own data or purchase third party data. First party data comes from your existing marketing infrastructure – ad tracking of multiple marketing channels, site visitation, CRM data, etc. Companies with a sound data foundation can combine these important data sources and leverage this large customer data set for DSP targeting. If all of your data sources are united in a single platform already, this is a great basis on which to build a DSP advertising program. DSPs can also use partial sets of first party data for targeting. There are many advantages of using first party data in a DSP-based targeting effort: • he data are specific to your brand. It’s the ultimate form of customized targeting. T RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 12
  15. 15. • Using first party data for DSP targeting is free. T • hey enable you to assign different values to different levels of current commitment to your brand. B • y using first party data in your DSP, insights you learn from the RTB buying effort will actually enrich your customer understanding. RTB is an auction market, and auction pricing (like the stock market) is a function of asymmetries of information. To be successful then in RTB means to have differentiated quality data. Certainly having more than the exchange minimum, but also having the right information and means to process it. For brands that don’t yet have a comprehensive data strategy or platform, there are a variety of vendors that will sell you audience data on a CPM basis through exchanges. You define the customer characteristics that interest you, and sources for the data can be quickly identified and implemented. The challenge is that third party data costs money. The more specific or esoteric the characteristic, the more expensive the data is. And if you need to buy multiple data points, each additional data point can add to the total cost of delivering your advertising. Third party data can add significantly to you total media costs. That doesn’t mean that using third party data will lead to inefficient targeting – it simply points out that third party data are not a panacea because it can add significantly to costs and affect your overall CPM. Some brands also combine first and third party data to enrich audience profiles while keeping data costs under control. As you consider DSP alternatives, concentrate on options that focus primarily on first party data targeting versus third party. Even if your company doesn’t yet have a comprehensive data platform and strategy, there are companies (including Mediaplex) that can help you improve your data collection and management efforts. “ ocus on options that focus F primarily on first party data targeting versus third party.” 4. AN THE SOLUTION MEET YOUR BRAND SAFETY STANDARDS? C Most brands are understandably concerned about where their ads run. They might want to avoid content that has one or more of the following characteristics: • Erotic/pornographic • Extremely violent RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 13
  16. 16. • Political in nature • Unflattering to the category or brand • Strongly negative in tone • Inappropriate for some other brand- or audience-related reason The level of protection necessary for your brand is up to you and your company. Some companies have relatively loose standards so they can avail themselves of rock-bottom CPMs. But most brands have stricter standards. Make sure that the DSP you choose offers truly robust brand protection tools. These tools should be proven effective and offer you a variety of brand protection options beyond “no porn.” DSPs sometimes have partnerships with third party brand protection tools, and may also offer proprietary quality assurance features. “ ake sure that the DSP you M choose offers truly robust brand protection tools.” 5. OES THE DSP OFFER ACCESS TO ALL OF THE LEADING EXCHANGES? D There are a relatively large number of media exchanges and publishers who provide direct RTB access today. Each exchange varies in size, in the sites that use it to sell inventory, and in the DSPs that access it. Not all inventory or data is available on every exchange or to every DSP. DSPs work with multiple advertising exchanges and some direct publisher RTB sources in order to access inventory. I strongly suggest that you choose a solution that accesses more than one RTB source. This will give you broader inventory access because many publishers do not work with all of the exchanges. In general, access to the largest exchanges is most important. There are also vertical exchanges for a few categories to be aware of as you make your choice. 6. OES THE VENDOR HAVE A COMMITMENT TO SERVICE AFTER D THE SALE? RTB and exchange-based buying are complicated. It requires the involvement of experts who understand how to develop and implement a program that will most benefit your business. But some DSP platforms don’t offer genuine support and service. RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 14
  17. 17. A big part of the issue is that many of these solutions are created by tech startups funded by venture capital firms. As we discussed earlier, VCs don’t like to invest in companies that offer extensive service because the potential return for such businesses is lower than if they sell instances of a tech platform with minimal human involvement. That’s because the marginal cost of creating another instance of a self-serve platform is near zero, while having staff to assist clients costs real money. The tech-centric VC model works well in many categories. But the more complicated the challenge, the more service is critical in realizing its true potential for your brand. Stay away from companies that don’t deliver real, ongoing service. The term SaaS, software as a service, is really a misnomer. You want software WITH service, not just a point product with little to no expert help after the sale. “ tay away from companies S that don’t deliver real, ongoing service.” If you do choose to deploy a self-serve platform, make sure the company offers strong training and has a dedicated team available to assist with targeting and optimization and ready to serve when you have problems. For those organizations that are not ready to invest in in-house teams, service-centric partners can make DSP buying as turnkey as making a publisher-direct or network buy. CONCLUSIONS I hope that this whitepaper has helped provide some clarity and texture to RTB and DSPs. These are both hot and potentially confusing topics, but the basic principles behind them are actually relatively simple. The idea of valuing every impression based upon the relevance of its viewer is an amazing leap forward for digital media and targeting. It represents a giant step toward the concept of personalized marketing that is clearly where our industry is ultimately headed. While RTB is not for every brand, it’s clear that more and more brands are seeing a fit between their objectives and this approach to media buying. The keys to making the right decision are: • Ensuring the right fit • Choosing the methodology of access that is right for your organization • Finding the best vendor for your particular situation I’d welcome your thoughts and comments on this paper. Please feel free to email me your thoughts and comments at davidyovanno@mediaplex.com. RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 15
  18. 18. ABOUT THE AUTHOR As president of Mediaplex, the technology services division of ValueClick, David A. Yovanno is responsible for all of its global operations. He is also responsible for driving cross-division synergies and assisting with the Company’s corporate development program. Mr. Yovanno first joined ValueClick in 2000 and held a number of leadership positions for ValueClick Media including executive vice president of sales and marketing, general manager and chief operating officer until 2008. Mr. Yovanno left ValueClick in 2008 to be CEO of Gigya, a successful social technology company based in Silicon Valley, and rejoined ValueClick in 2011. Mr. Yovanno has also served on the board of the Interactive Advertising Bureau and in the United States Navy as a Lieutenant and CIO. Mr. Yovanno is a graduate of The George Washington University in Washington, D.C., where he earned his bachelor’s degree in marketing and master’s degree in health services administration. ABOUT MEDIAPLEX Mediaplex, a division of ValueClick, Inc. (NASDAQ: VCLK), is the technology-empowered analytics and optimization provider that scientifically identifies the best way for brands to invest marketing resources and then executes against those insights with a suite of advanced campaign management tools. Its unique software with service model delivers industry-leading technology coupled with the deep analytics expertise necessary to answer Marketing’s most mission-critical question: how to maximize ROI from marketing investments. With all the essential software and services needed to correctly collect, manage, interpret, and action data, Mediaplex’s end-to-end solution is the first to make genuine data-driven marketing a reality. For more information visit Mediaplex.com or contact us at 1.877.402.PLEX (7539). RTB DSP DECODED © COPYRIGHT 2012 MEDIAPLEX. ALL RIGHTS RESERVED. MEDIAPLEX.COM 16