Integral semiannual review 2012 - q3-q4

2012
Integral Ad Science Semiannual Review
Key findings from Integral’s analysis of the display
advertising industry

Q3 and Q4 2012 Industry Analysis and Key Findings

Understanding and analyzing the risk of ad placements is becoming Suspicious Activity Detection is becoming essential to running a
exceedingly crucial. Integral analyzes billions of impressions daily to safe and effective online advertising campaign. Impression fraud is
determine how and where risk is changing, both by category (illegal a serious threat to online advertising and potentially affects anyone
downloads, adult content) and channel (publishers, exchanges, buying or selling online media. See page 3 for suspicious activity data
networks, hybrids*). See page 5 to learn more. by channel and category.

The viewability of ads, and how this impacts user engagement, is Integral’s TRAQ (True Advertising Quality) Score leverages Integral’s
a constantly growing concern of advertisers and publishers. Integral proprietary data science to create a single holistic metric that
has examined the length of time users spend on different types of determines the specific value of each individual ad placement. See
sites, how long ads remain visible on the page, and how the size, page 2 to discover the average TRAQ scores of media quality by
orientation, and placement of ads affect these metrics. See the channel type and content category.
charts on page 4 for more details.

*In this Semiannual Review, Integral is including data on a new channel – hybrids – across the various metrics measured. As the industry grows to include a broader number of partners and
inventory, hybrid ad networks are emerging as networks that have a combination of inventory sources that could include exchange buys.

Introducing True Advertising Quality (TRAQ) Score

Integral is built upon the belief that the key to effective online activity. As such a comprehensive metric, it will provide value to
advertising lies in the quality of the environment and exposure every player in the industry: buyers, sellers, publishers, and trading
associated with each ad impression. In Q4 of 2012, Integral rolled platforms alike.
out the TRAQ score, a holistic media quality score designed to be a
crucial enhancement to the digital media ecosystem. Integral has been analyzing the marketplace using TRAQ, and the
results are being published for the first time in this review. To discover
TRAQ is based on a number of environment and exposure factors, which ad channels and content categories offer the best media
including brand safety, page content and structure, ad viewability, environments, see page 2.
share of view, ad clutter, ad collisions, and likelihood of suspicious

Integral | integralads.com | 37 East 18th Street, 7th Floor | New York, NY 10003 +1 (646) 278-4871

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2012 Integral Ad Science Semiannual Review
Key findings from Integral’s analysis of the display advertising industry

TRAQ By Channel

The TRAQ score is a holistic metric that Networks had a score of 593; Exchanges had
measures the overall media environment a score of 560; Hybrids had a score of 587. AverageTRAQ scores
Average TRAQ Scores
that ads are displayed in on a 0-1000 scale.
Direct 720
TRAQ is broken down into a granular and This aligns with the viewability study on
actionable scoring system. As a result, page 3, which found that ads placed directly Exchange 560
brands are able to target media quality stayed in view longer than those placed
based on custom quality thresholds. through Networks, Exchanges and Hybrids. Hybrid 587

After analyzing billions of impressions on a Network 593
daily basis, Integral found that ads placed
Category Definitions
directly have the highest TRAQ score,
with an average of 720. In comparison,
Networks, Exchanges and Hybrids had 0 0-500 500-750 750+ 1000
satisfactory ratings all within close range.
poor satisfactory good

TRAQ Score By Category

TRAQ scores by content category showed All these scores indicate very high quality sites with high impression numbers in each
consistent results, with most content cat- in their categories. Style scored the lowest category plagued with suspicious activity. As
egories overall scoring between 600 and 700. with a TRAQ score of 498 - the only score TRAQ is a comprehensive measure of media
Science led the pack with a TRAQ score of below 500 across the categories, while food quality, these results correspond with the
746 with health and careers trailing behind and art also had low scores at 568 and 561. Suspicious Activity analysis on page 3.
with scores of 713 and 705, respectively. Their scores were likely caused by one or two
746

713
705
690 689 685
674
665

645
632 637
628 631 631
622
607 610

586 588
574
568
561

498




Suspicious Activity By Channel

In mid-2012, Integral introduced its first Networks earned a score of 663 (moderate Greater than
Greater than
to market Suspicious Activity Detection risk), with almost 16% of ads exhibiting

2 %
technology; the results of the suspicious suspicious activity. Exchanges and Hybrids
activity measurements over Q3 and Q4 proved riskier, with scores of 488 and 502,
revealed some fascinating insights. and around 30% of ads with suspicious
activity.
Ads placed directly had by far the lowest risk, of impressions are suspicious
of impressions are suspicious of being
of being fraudulent activity.
with only 5% of ads exhibiting suspicious fraudulent activity. For exchanges the
For exchanges the amount is
activity and a suspicious activity score of greater than 30%.
amount is greater than 30%.
868 (low risk).

Suspicious Activity By Category

Integral’s suspicious activity measurements indicating very low risk for suspicious activity. TRAQ scores by content category, these
by content category showed a range of Religion and pets also had high scores at numbers were likely due to a few specific
results, with most categories falling between 913 and 911, respectively. Meanwhile, food high impression volume sites affected by
600 (moderate risk) and 900 (low risk). (363) and style (457) scored the lowest, with suspicious activity.
Shopping had a near perfect score of 980, high rates of suspicious activity. As with

980

911 913
847 886 875

808 816

765 773
693 747

667
650
634 634

584
549 552 554
530

457

363




Ad Viewability Metrics

The graph above displays the lengths of a result of users continuously scrolling down view for longer than one second, but less
time people spend on different categories of the page. than 20% stay in view for 15 seconds
websites and how long ads are in view. Sites or more. The second chart shows how
that offer engaging content, like news, home The first chart below displays which type viewability is affected by an ad’s size, with
and garden, business, and finance, keep of ads achieve long-term engagement with vertically oriented ads exhibiting the highest
users on the page for longer. However, ads on users. More than 40% of ads overall—and percentage of ads in view for at least one
these pages stay in view for less time—likely over 55% of directly placed ads—stay in second.

By Time Frame By Ad Size

56.0% 728 X 90 39.0% average
Hybrid 36.2%
Network Exchange 36.3%
Hybrid Network 36.4%
42.2% Exchange Direct 43.2%
41.1% 300 X 250 43.0% average
Direct
37.6% 37.8% Hybrid 37.1%
Exchange 33.3%
28.7% Network 39.3%
28.5%
Direct 56.0%
26.1% 22.7%
160 X 600 50.8% average
17.2% Hybrid 51.8%
16.5% Exchange 48.7%
15.7%
Network 53.7%
In View >1s In View >5s In View >15s Direct 50.6%




Risk Content Composition By Channel

The chart to the right shows the percentage
of ads served on moderate-risk to very Risk Composition by Level
high-risk web pages by channel. Overall, the
share of total inventory associated with risky
content shrunk between the third and fourth
quarters of 2012, from 19.8% to 17.4%. In the
third quarter, publishers carried the lowest
proportion of high-risk inventory at 2.1%,
while networks carried the highest at 5.1%.
However, in the fourth quarter, publishers’
high-risk content increased to 3.6% and
networks carried the lowest proportion of
high-risk inventory at 3.2%, though they still
carried the highest proportion during the two
quarters combined.

High-Risk Inventory By Content Category

During the first and second quarters of offensive language, hate speech, and alcohol chart below displays further breakdowns by
2012, adult content and illegal downloads are all on the rise. This increase is likely not content category. Note: this chart comprises
represented about half of high-risk inventory, attributable to any one cause, but rather a the “high” and “very high” risk inventory
but in the second half of the year, they greater volume and variation in inventory highlighted in the chart above.
represented only about 40%. In their place, during the second half of the year. The

High-Risk Composition by Category
High-risk composition by category

Q3 21.5% 11.9% 22.0% 21.1% 1.5% 22.0%

Q4 18.6% 19.1% 15.6% 15.4% 15.2% 16.2%

Q3 23.7% 6.2% 21.8% 21.9% 4.3% 22.1%

Q4 19.4% 18.6% 15.4% 15.3% 15.2% 16.1%

Q3 24.6% 1.8% 24.3% 24.4% 0.5% 24.4%

Q4 16.9% 21.3% 15.4% 15.3% 15.2% 15.9%

0% 20% 40% 60% 80% 100%
Illegal Downloads Adult Drugs Offensive Language Hate Speech Alcohol




Ad Collision

Integral has found that approximately 20% against IO specifications can be significant Frequency of Collisions
of ads will collide with another ad from for advertisers; this percentage represents
the same campaign. Within this subset of $200,000 on a typical $1 million ad buy. Ad
colliding impressions, 13.9% of ads collided collision is often caused by multiple networks
with 1 other ad, 3.4% of ads collided with 2 all targeting the same user cookies with non-colliding
other ads, and 5.2% collided with 3 or more the same ad, usually a result of marketers impressions
ads. The cost of displaying multiple ads utilizing multiple vendors. 77.4%
from the same campaign to users when 4+ ad collisions
5.2%
3 ad collisions
3.4%
2 ad collisions
13.9%
Traffic by Device Type

Industry trends showed that mobile ad spend increase – almost 2x – in ads viewed on Tablet
grew steadily over 2012, and is predicted mobile and tablet devices over Q3 and Q4.
Q3 1.38%
to continue this exponential growth over Ad impressions on mobile devices increased
2013. While desktop computers and laptops from 1.38% to 2.02%, while ad impressions Q4 2.56%
continue to dominate ad impressions at over viewed on tablets increased from 2.56% to
Mobile
90%, Integral’s analysis showed a marked 3.88%.
Q3 2.02%

Q4 3.88%
International Destinations of Non-geo-targeted Impressions

Ads intended for the US market that end New Zealand. From the first half of 2012, of 8.1% non-geo-targeted impressions in Q3
up inadvertently served to users in other non-compliant traffic increased around 7% in and ranked fourth in Q4—likely due to the
countries remains a major concern for Japan and New Zealand; India reached a high country’s fast-growing Internet adoption.
advertisers. The table below shows the most
common destinations of non-compliant
Top 15 Countries Flagged for US Targeted Campaigns
geo-targeted ad traffic over the past year. In
previous studies, the UK has usually topped (as a % of Non-US Traffic)
this list, but in this past two quarters, there Rank Country Q1 Q2 Q3 Q4
was a stark decrease in non-compliant
1 Canada 49.9 13.0 7.5 34.5
traffic to the UK, as it fell to sixth on the list 2 New Zealand 2.0 1.0 7.8 7.4
with less than 5% in each quarter. This is 3 Germany 1.5 1.1 4.6 5.9
likely due to the growing adoption of safety 4 India 1.0 6.4 8.1 5.3
and viewability products worldwide, which 5 Australia 12.0 10.3 1.9 4.0
has led more advertisers to target the UK 6 Great Britain 20.4 26.3 4.7 3.9
7 Nigeria 0.5 2.1 1.0 3.7
intentionally. This leaves a shallower pool 8 Brazil 0.9 2.6 1.9 1.8
of inventory available to land in the UK 9 Netherlands 0.6 0.5 0.5 1.7
unintentionally. 10 Japan 0.2 0.9 7.9 1.6
11 Mexico 0.7 0.7 3.8 1.6
As non-compliant traffic to the UK 12 China 0.3 3.7 7.2 1.4
13 Indonesia 0.3 2.0 2.1 1.3
decreases, a larger increase of non- 14 Ireland 0.1 0.1 2.8 1.3
compliant traffic is landing in East Asia and 15 Hong Kong 0.1 0.2 8.8 1.2




About Integral Ad Science

Integral, formerly AdSafe Media, is the leading global provider of actionable advertising intelligence data for buyers and sellers of digital media.
Since launching the industry’s first preventative brand safety solution in 2009, powered by constant growth and innovation, Integral has
evolved into a global media valuation platform that is essential to the buying and selling of quality media.

Integral focuses on a comprehensive solution set that enables advertising to appear in quality environments where they receive quality
exposure -- and rewards the sell side for providing quality media. Integral’s technology drives improved visibility, efficiency, and ROI for players
across the digital media landscape. Its media valuation platform is the only technology that scores and evaluates overall media quality on a
page level for the following metrics:

Brand Safety
Ad Viewability
Page Context
Ad Clutter
Ad Collisions
Suspicious Activity
Professionalism

Integral recently released two first to market innovations:

The TRAQ (True Advertising Quality) Score, a revolutionary and holistic overall quality rating leveraging proprietary data science and
algorithmically combining the ad environment and ad exposure metrics listed above into a single media quality evaluation.
Campaign ROI, an assessment of individual publishers effects on a campaign’s conversion – the first step towards leaving the industry’s
flawed attribution models behind.

Integral provides actionable solutions, empowering advertisers to easily buy and bid on media leveraging these quality metrics and enabling
publishers to be rewarded for providing quality ad opportunities.

Integral works with hundreds of global brands, all of the major agencies and holding companies, over half of the top networks and DSPs, and is
fully integrated with several major exchanges and trading platforms.

Integral is headquartered in New York City with operations in San Francisco, London, Tokyo and Sydney, and are expanding quickly. Visit
integralads.com for more information as well as the latest news and product launches.

For More Information

Rebecca Steuer Karlie Santucci Kiril Tsemekhman Michael Iantosca
Senior Director of Communications VP of Client Services Chief Data Officer Chief Revenue Officer
rebecca@integralads.com karlie@integralads.com kiril@integralads.com mike@integralads.com



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