Parsing the Mayhem:
Developments in the Advertising
Technology Landscape
May 3, 2010




Terence Kawaja
GCA Savvian Adviso...
Parsing the Ad Tech Value Chain


                                ANALYTICS


             INVENTORY     INVENTORY
Media  ...
Display Advertising Technology Landscape

    Agencies         Media Buying                                               ...
Let’s Not Forget About the Principals
Landscape Observations

    Agencies         Media Buying                                                      Ad         ...
Ad Stack - Circa 2000




            Ad
         Operations




Agency


                         Ad
                    ...
Ad Stack - Circa 2005




                        Analytics
            Ad
         Operations
                           ...
Ad Stack - Circa 2010




                   DSP
                                                  Analytics             V...
Display Advertising Technology Landscape

    Agencies         Media Buying                                               ...
Search Advertising Technology Landscape
                           SEM
    Agencies     SEM                               ...
Television Advertising Technology Landscape

    Agencies




A                                  TV Ad Brokers
           ...
Sizing the Market Opportunity (Fun With Math)


                                                         2010            2...
Carving Up the Stack - Network World

                 $5.00 CPM
         $5.00


                               ($0.50)
 ...
Carving Up the Stack - DSP / Exchange World

                    $5.00 CPM
           $5.00                               ...
Landscape Observations

    Agencies         Media Buying                                                      Ad         ...
Landscape Observations

    Agencies         Media Buying                                                      Ad         ...
Google is Well Positioned in Display

    Agencies     Media Buying                       Ad              Ad Networks     ...
Landscape Observations

    Agencies     Media Buying                          Ad           Ad Networks                   ...
Exception: All Data is Not Created Equal


         Data Hierarchy               Example Companies




             Social...
Exception: Proprietary Data Sets
Landscape Observations

    Agencies     Media Buying                          Ad           Ad Networks                   ...
Landscape Observations

    Agencies         Media Buying                                                      Ad         ...
SSP = Sell Side Platform

                                     Ad Networks                      Sharing Data /
           ...
Landscape Observations

    Agencies         Media Buying                                                      Ad         ...
Diverse Strategic Interest in Ad Tech Innovators


 Agency                                                      Marketing
...
Strategic Ad Tech Investment Activity to Date




  Over $13
   billion of
 investment
activity from
 all potential
buyer ...
Diverse Strategic Interest in Demand-Side Ad Tech




Strategic Fit




                                          Ability ...
Consolidation Will Likely Come in Waves
The First Deal Will Likely Trigger the Initial Wave
The Ad Tech Optimization Scorecard



Advertisers

Publishers

Agencies


Ad Networks


DSPs


Data Providers


Data Aggre...
Wall Street and Madison Ave; Separated at Birth?


                               Name
                  Named after a str...
GCA Savvian’s Digital Media Advisory Business
                         Deep Industry Knowledge • Think Like Principals • O...
And Now For Some Fun………..




          Wall Street Meltdown




                 Mad Avenue Blues




                   ...
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Terence Kawaja's IAB Networks and Exchanges Keynote

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This presentation explores the crowded display advertising technology landscape and makes some observations and prognostications on the trends and developments impacting the space.

While this represents the substantive part of my presentation, don't miss the entertainment factor at www.bit.ly/TKawajaDSPvideo.

Published in: Technology
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  • the ever changing digital landscape ,.... I LOVE IT!!
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  • great analysis
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  • Excellent explanatory doc for those trying to wrap their head around the complex digital advertising marketplace.
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  • Terence - thanks for this comprehensive review, the infographic alone has proven to be very useful. Kudos to you for taking the initiative on what is sure to be an interesting evolution... In fact, we liked it so much we also posted a text version with links to all the names mentioned.
    http://www.webliquidgroup.com/blog/online-word-of-mouth/display-advertising-technology-landscape/
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  • Love slide 3 showing the landscape. Refer to it all the time. Well done!
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Transcript of "Terence Kawaja's IAB Networks and Exchanges Keynote"

  1. 1. Parsing the Mayhem: Developments in the Advertising Technology Landscape May 3, 2010 Terence Kawaja GCA Savvian Advisors
  2. 2. Parsing the Ad Tech Value Chain ANALYTICS INVENTORY INVENTORY Media SUPPLY AGGREGATION Where? DATA DATA AUDIENCE DATA MEDIA Audience SUPPLY AGGREGATION SEGMENTATION OPTIMIZATION BUYING Who? CREATIVE CREATIVE Creative ORIGINATION OPTIMIZATION What? ANALYTICS
  3. 3. Display Advertising Technology Landscape Agencies Media Buying Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools Horizontal Trading Desk A P D U A Video / Rich Media Yield V Optimization B U E L D R Vertical I I T E S I N Targeted Publisher H C S Creative Data Data Exchanges / Tools E E Optimization Optimization E Aggregators R R Performance S S Ad Servers Ad Servers Analytics Verification / Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  4. 4. Let’s Not Forget About the Principals
  5. 5. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools 1. Overcrowded Marketplace Horizontal Trading Desk A P D U A Video / Rich Media Yield V ries Optimization B U ego E L D R cat Vertical I I T 24 S E ies N pan I H Targeted Publisher C om S Data Tools E ted Creative Data E 2c Exchanges / Optimization Optimization E Aggregators ves R 19 n in R Performance S illio S Ad Servers $2 .5 b Ad Servers Analytics Verification / Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  6. 6. Ad Stack - Circa 2000 Ad Operations Agency Ad Server
  7. 7. Ad Stack - Circa 2005 Analytics Ad Operations Ad Network Agency Ad Server
  8. 8. Ad Stack - Circa 2010 DSP Analytics Verification Ad Ad Operations Exchange Data Ad Optimization Network Creative Optimization Yield Optimization Data Aggregator Agency Ad Server
  9. 9. Display Advertising Technology Landscape Agencies Media Buying Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools Horizontal Trading Desk A P D U A Video / Rich Media Yield V Optimization B U E L D R I I T $8 B Vertical E I i llion S N Targeted Publisher H C S Creative Data Data Exchanges / Tools E E Optimization Optimization E Aggregators R R Performance S S Ad Servers Ad Servers Analytics Verification / Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  10. 10. Search Advertising Technology Landscape SEM Agencies SEM SEO Providers / Tools Search Engines Agencies Tools A P D U A V B U E L D R $17 I I T I Billi S E N S E on Data Optimization Data Exchanges / Performance H E R C E R Aggregators S S Analytics Verification Data Suppliers Mobile
  11. 11. Television Advertising Technology Landscape Agencies A TV Ad Brokers P D U A V B U E L D R I I T E S N I H C S E E E R R S S
  12. 12. Sizing the Market Opportunity (Fun With Math) 2010 2014 Total Online Display Ad Sales $ 8,000 $ 16,000 % Audi ence Targeted 13% 50% Audience Targeted Ad Sales 1,000 8,000 % Media Bought on DSP Platform 20% 50% DSP-based Audience Targeted Ad Sales 200 4,000 % Fees to Demand-Side Intermediary 15% 10% DSP Net Revenue 30 400 Over $400 million has been raised by demand-side intermediaries alone; over $2.5 billion on the entire landscape Illustrative analysis only
  13. 13. Carving Up the Stack - Network World $5.00 CPM $5.00 ($0.50) $4.00 $3.00 (C PM) ($2.00) $2.00 ($0.25) $1.80 CPM ($0.35) ($0.10) $1.00 $0.00 Advertisers Agency Ad Network Data Provider Ad Exchange Ad Serving / Publisher Rich Media
  14. 14. Carving Up the Stack - DSP / Exchange World $5.00 CPM $5.00 Efficiency from Optimized Media Buying $4.20 CPM ($0.50) $4.00 ($0.40) ($0.50) $3.00 (CPM) (C PM) ($0.75) $2.15 CPM ($2.00) ($0.30) $2.00 ($0.25) ($0.10) $1.80 CPM ($0.35) ($0.10) $1.00 $0.00 Advertiser Advertisers Agency Ad DSP Network Data Provider Ad Exchange Ad Exchange Ad Serving / Serving Publisher Rich Media Rich Media
  15. 15. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data DSPs DSPs Platforms Exchanges / Social Tools Horizontal 1. Overcrowded Marketplace Trading Desk 2. Demand side capabilities likely A P D to amalgamate Yield U A Video / Rich Media V Optimization B U E L D R Vertical I I T E S I N Targeted Publisher H C S Creative Data Data Exchanges / Tools E E Optimization Optimization E Aggregators R R Performance S S Ad Servers Ad Servers Analytics Verification / Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  16. 16. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools Horizontal 1. Overcrowded Marketplace Trading Desk 2. Demand Side Capabilities likely to A P amalgamate D U V 3. Google is Video / Rich Media to display in aB A coming Yield Optimization U E big way L D R Vertical I I T E S I N Targeted Publisher H C S Creative Data Data Exchanges / Tools E E Optimization Optimization E Aggregators R R Performance S S Ad Servers Ad Servers Analytics Verification / Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  17. 17. Google is Well Positioned in Display Agencies Media Buying Ad Ad Networks Sharing Data / DSPs Platforms Exchanges Social Tools Horizontal A P D U A Video / Rich Media Yield V Optimization B U E L D R Vertical I I T E S N I Targeted Publisher H C S Creative Data Optimization Data Exchanges / Tools E E Optimization Aggregators E R Performance R S S Ad Servers Ad Servers Analytics Verification / Data Suppliers Mobile Attribution Ad Ops / Infrastructure
  18. 18. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data / DSPs Platforms Exchanges Social Tools 1. Overcrowded Marketplace Horizontal Trading Desk 2. Demand Side Capabilities likely to A P amalgamate D U A V 3. Google is coming to display in a Video / Rich Media Yield Optimization B U E big way D L R I I 4. Data becomes ubiquitous and Vertical E T commoditized S N I Targeted Publisher H C S Creative Data Optimization Data Exchanges / Tools E E Optimization Aggregators E R Performance R S S Ad Servers Ad Servers Analytics Verification / Data Suppliers Mobile Attribution Ad Ops / Infrastructure
  19. 19. Exception: All Data is Not Created Equal Data Hierarchy Example Companies Social Sharing Value Search Intent Click Stream Publisher Cookie Segmentation
  20. 20. Exception: Proprietary Data Sets
  21. 21. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data / DSPs Platforms Exchanges Social Tools 1. Overcrowded Marketplace Horizontal Trading Desk 2. Demand Side Capabilities likely to A P amalgamate D U A V 3. Google is coming to display in a Video / Rich Media Yield Optimization B U E big way D L R I I 4. Data becomes ubiquitous and Vertical E T commoditized S N I Targeted Publisher H C S Data 5. Life gets tougher for agencies Data Tools E Creative Optimization Optimization Exchanges / Aggregators E E R Performance R S S Ad Servers Ad Servers Analytics Verification / Data Suppliers Mobile Attribution Ad Ops / Infrastructure
  22. 22. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools 1. Overcrowded Marketplace Horizontal Trading Desk 2. Demand Side Capabilities likely to A P amalgamate D U V 3. Google is Video / Rich Media to display in a A coming Yield Optimization B U E big way L D R I I 4. Data becomes ubiquitous and Vertical E T S commoditized N I H Targeted Publisher C S 5. Data / gets tougher for Agencies E Life Tools Creative Optimization Data Optimization Exchanges E E Aggregators R R 6. Publishers Performance to leverage data need S S for their benefit Ad Servers Ad Servers Analytics Verification / Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  23. 23. SSP = Sell Side Platform Ad Networks Sharing Data / Horizontal Social Tools P Video / Rich Media Yield U A Optimization B U L D Vertical I I E Publishers can make data S N work for them Targeted Publisher H C Tools • Sell it raw E E • Brand it Performance R • Target better (higher CPMs) S Ad Servers Mobile Ad Ops / Infrastructure
  24. 24. Landscape Observations Agencies Media Buying Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools 1. Overcrowded Marketplace Horizontal Trading Desk 2. Demand Side Capabilities likely to A P amalgamate D U V 3. Google is Video / Rich Media to display in a A coming Yield Optimization B U E big way L D R I I 4. Data becomes ubiquitous and Vertical E T S commoditized N I H Targeted Publisher C S 5. Data / gets tougher for Agencies E Life Tools Creative Optimization Data Optimization Exchanges E E Aggregators R R 6. Publishers Performance to leverage data need S S for their benefit 7. Consolidation likely from Servers Ad several Ad Servers Verification / buyer groupsMobile Analytics Data Suppliers Attribution Ad Ops / Infrastructure Please direct any inquiries or comments on the landscape to Terence Kawaja at tkawaja@gcasavvian.com or (212) 999-7082
  25. 25. Diverse Strategic Interest in Ad Tech Innovators Agency Marketing Targets Technology Network / Data Ad Networks
  26. 26. Strategic Ad Tech Investment Activity to Date Over $13 billion of investment activity from all potential buyer groups = Acquisition = Investment
  27. 27. Diverse Strategic Interest in Demand-Side Ad Tech Strategic Fit Ability / Willingness to Pay
  28. 28. Consolidation Will Likely Come in Waves
  29. 29. The First Deal Will Likely Trigger the Initial Wave
  30. 30. The Ad Tech Optimization Scorecard Advertisers Publishers Agencies Ad Networks DSPs Data Providers Data Aggregators
  31. 31. Wall Street and Madison Ave; Separated at Birth? Name Named after a street in Manhattan Unit Standardized, high volume Buyers Looking for a good ROI Sellers Looking for the highest price Agent Intermediaries Handful of global firms in New York, Europe Rating Agencies Provide “independent” third party measurement Distribution Channels Partner sales channel which aggregates demand Auction Marketplaces Exchanges facilitate the trading of units
  32. 32. GCA Savvian’s Digital Media Advisory Business Deep Industry Knowledge • Think Like Principals • Offer Trusted Advice to Clients Terence Kawaja Managing Director +1 212.999.7082 tkawaja@gcasavvian.com TOKYO • SAN FRANCISCO • CHICAGO • NEW YORK • LONDON Leading investment banking firm with over 200 professionals worldwide Services include advice on mergers and acquisitions, private capital finance and restructurings Advised on over $60 billion in transactions since 2006 Advisor to media companies new and old
  33. 33. And Now For Some Fun……….. Wall Street Meltdown Mad Avenue Blues Digital Media Musical Chairs
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