I Have Three Messages for You Today 1 Programmatic trading is real; Time to get on board 2 Hype makes this seem much more complicated than it is 3 Time for action is now2
1 A technology with a new market and value networkDisruptive " 2 Different set of consumersTechnology 3 Often the “least proﬁtable”Shifts 4 Ignored by incumbents 5 Eventually technology becomes “better” than existing market
Classic Disruptive Technology Superior cross-device audio, video compared to the telephone. Skype is PERFORMANCE becoming the business standard. Video Basic chat and conference calls “Free” international calls5
Ok, so what does that have todo with online advertising?
“Original” Ad Model – Direct Sales A Advertiser Publisher P A Advertiser Publisher P CPM Based Negotiated Adservers as “delivery engines” Focused on “premium” inventory8
The Problem with Traditional Media Sales Relative to the corresponding1 Operationally difﬁcult media budgets, the high- volume, low-dollar, high-2 Doesn’t scale past the top-100 publishers complexity nature of Digital3 Low sell through programs makes it the most labor intensive medium " in the advertising Industry SOURCE: Joe Burton, MCCANN WORLDGROUP, AMERICAN ASSOCIATION OF ADVERTISING AGENCIES, INC., 20099
Enter the Ad Network Ad Network A P Aggregators of supply SELL BUY & demand who try to A N P solve the “remnant NETWORK monetization” gap. A P ADVERTISERS PUBLISHERS10
The Ad Network Problem1 No standardized way A of trading results in N daisy chains2 Serious ad quality P N N problems N P3 Deep channel conﬂict issues N A11
Right Media: “Exchange 1.0” A P ADVERTISER 1 PUBLISHER 11 Adserver for ad N networks NETWORK 12 Link networks on one E platform to provide EXCHANGE balanced liquidity A N N A ADVERTISER 2 NETWORK 2 NETWORK 3 ADVERTISER 3 P P PUBLISHER 2 PUBLISHER 312
Classic Disruption in the Making… A NEW " Trading between " MARKET networks A NEW " Trading + eCPM" TECHNOLOGY in the ad server “LEAST PROFITABLE” customers (Networks) Focused on “LOW QUALITY” (remnant/unsold) inventory13
Competition Fast Followed…1 Other ventures quickly follow Right Media to build exchanges2 All exchanges acquired by major media companies in 200714
Enter SSPs & DSPs N A P P A PUBLISHERS N ADVERTISERS DSP SSP P SSP A PUBLISHER ADVERTISERS “Ad Trading Specialists” (ATS)15
The Challenges The SSP Challenge No full insight into the demand pool Prices are estimated High latency All the same problems with ad networks: channel conﬂict, ad quality, malware, etc. The DSP Challenge Operational overheads Lack of centralized budget/frequency control Lack of transparency/visibility Inconsistent targeting Difﬁcult to buy behaviorally16
Welcome to today’s world ofprogrammatic trading…
Exchange 2.0 1 Operationally more efﬁcient: less manpower 2 Enables buyers to leverage their own data and effectively remarket and frequency cap 3 Gives sellers control over price, quality and better transparency and visibility Programmatic trading is starting to be better than traditional hand sold: higher revenue for the seller, higher ROI for the buyer
Classic Disruptive Technology PERFORMANCE SSPs & DSPs gain market adoption + RTB Yahoo adopts SSPs & DSPs starting to bring more premium supply/ exchange trading; demand Adx long tail Right Media: Automating trading between networks21
If exchange trading is so good,why does it seem so damncomplicated?
1 They are on a constant quest for How do the “Home Run” VCs 2 They look for three things: § A growing or “hot” industry invest § Category Leaders capital? 3 § Technology Companies Tend to not truly understand the technology24
Result: Continuousinvestment in new“feature” categories
Let’s Make This a Bit Simpler.. Features / If lucky a standalone “delivery system / tool” Irrelevant27
Look at This… It’s Not Complicated at All! Data Providers R.I.P. R.I.P. Buyer Buyer Seller Buyer & Seller Seller Buyer Technology as a service Technology as a service Buyer Buyer Data Data Seller Provider Provider28
If you do notunderstand whatsomeone is saying,"it’s probably not real.
1 We are riding a seven year wave of disruptive innovation in automated trading We have a hyped up market mapLet’s 2 fueled by the VC industryRecap 3 The real value prop is simple: § Operational efﬁciencies reduce costsQuickly § Buyers can use their own data/tech § Sellers have more control for reduced channel conﬂict and increased quality 4 Now is the time to do something!