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Demand Side Platforms Explained Feb, 2014

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What is a Demand Side Platform? Display Advertising Budget Allocation by Channel
Top Benefits of a Demand Side Platform
Who are the Key Players in Advertising Ecosystem
Real-Time-Bidding Growing to Third of Display Advertising
Challenges of Demand Side Platforms
How Real-Time Bidding works: A step-by-step explanation
The display ad-serving process: A step-by-step explanation

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Demand Side Platforms Explained Feb, 2014

  1. 1. Demand Side Platforms Explained Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 1
  2. 2. What We Will Learn Today: Demand Side Platforms Explained o What is a DSP (Demand Side Platform)? 2 o Digital Advertising Ecosystem 3 o Less than a Quarter of Budget is Placed Directly with Publishers 4 o What do Marketers Say are the Top Benefits of a DSP? 5 o Who are the Key Players? 6 o Real-Time-Bidding to Grow to Almost a Third of Display 7 o DSP Challenges 8 o How Real-Time Bidding works: A step-by-step explanation 9 o The display ad-serving process: A step-by-step explanation 10 Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 2
  3. 3. What is a DSP (Demand Side Platform)? Automation at Scale for Sophisticated Targeting DSPs assist advertisers in buying display advertising, with benefits including: - Sophisticated targeting and retargeting: - Streamline: Centralized buying from ad exchanges, SSPs (Supply-Side Platforms) and networks - Reach: Access to a pool of 15 billion+ daily impressions - Pricing Power: Often leverage RTB (Real-Time-Bidding) - Unified Campaigns: Real-time management, reporting via single dashboard Source: Intro to DSPs Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 3
  4. 4. Digital Advertising Ecosystem Automation at Scale for Sophisticated Targeting 1. DSPs (Demand Side Platforms): Assist advertisers in buying display advertising, with benefits including sophisticated targeting, reach, centralized buying, and pricing power The B&W image shows the basic hierarchy, and the reality is more like the color image, where today’s media buyer has many available purchase paths for buying display ads, and various parts of the ecosystem collaborate. 2. SSPs (Supply Side Platforms)/ Ad Exchange: like a “stock exchange”, they consolidate pricing-which can be updated by the second-for ad networks. Unlike ad networks, exchanges do not generally buy ad space in advance to sell. 3. Ad Network: No single network has all websites, and the same website may be listed on multiple networks at different price. Until recent years, the majority of banner advertisements on the Internet were sold and served by ad networks. 4. Media Sites: Larger sites have direct sales teams but may have remnant inventory to sell thru other methods. Smaller sites may not have sales teams and want to sell thru automated systems. Source: Intro to DSPs Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 4
  5. 5. Less than a Quarter of Budget is Placed Directly with Publishers Media buyers don’t just use one purchase path or method. The majority allocate display ad budgets across both upfront and impressionlevel inventory sources. As Real-Time-Bidding gains momentum (from 20% to 30% by 2017), DSPs, ad exchanges and ad networks will take a larger share of the display media plan from direct (publishers, social media, portals and video sites). Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 5
  6. 6. What do Marketers Say are the Top Benefits of a DSP? 2013 67% 64% 0.03 53% 60% (0.07) Ability to buy at impression level More efficiency and reduced manual processes 53% 53% 51% 44% 0.07 Increased reach 50% 49% 0.01 Lower cost Fewer points of sale/media owners to liaise with 46% 44% 0.02 41% 20% 0.21 40% 31% 0.09 Global frequency caps 37% 24% 0.13 Integration with other media channels • The respondents who indicated that “fewer people to deal with” is a benefit DOUBLED from the prior survey. Improved targeting Real-time understanding of campaign performance Save time in planning • Over two-thirds cite Improved targeting as the top benefit 2011 Percentage Point Chg. 29% 27% 0.02 - Source: Econsultancy and Rubicon Project "Online Advertisers Survey 2013" commissioned by Association of Online Publishers (AOP). More than 650 advertisers and agencies were surveyed in August 2013. Respondents are from UK, non-UK Europe and North America. 6
  7. 7. Who are the Key Players? • DSPs: MediaMath, Turn and Simpli.fi. • Ad exchanges: Facebook Exchange, AdECN and Right Media. • SSPs: PubMatic, AdMeld, Rubicon • Ad networks: Advertise.com, Google Display Network, Yahoo!, Casale Media, Undertone Source: matthunter.com, etc. Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 7
  8. 8. Real-Time-Bidding to Grow to Almost a Third of Display eMarketer estimates RTB will account for 19% of total US digital display ad spending this year; by 2017, that portion will grow to 29%, or $9 billion Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 8
  9. 9. DSP Challenges As DSPs become available “off the shelf” many observers predict agencies will become less important and advertisers will prefer to feed themselves. • Scale: Not all advertisers have the scale to manage the complexity that DSPs involve. • Greater Complexity: Advertisers buy-in to the idea of using DSPs as an alternative to using “expensive” digital marketing agencies. But marketing may not yet equipped to understand the nuances of different algorithms, demand elasticities, etc. • Management Distraction: Developing competency in digital media management has opportunity cost for other core needs like product development • Another layer of cost: Depending on the DSP fee model, may result in higher cost than going direct to other parts of the ecosystem (exchanges, networks, publishers) Source: matthunter.com, etc. Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 9
  10. 10. How Real-Time Bidding works: A step-by-step explanation 1. SSP sends ad unit site, placement and user (cookie) info to all parties participating in auction (e.g., ad nets, DSPs, ad exchanges) 2. Media buyer’s DSP looks at user cookie to determine if it’s a match for an existing database user 3. If it’s a match: DSP reviews site/placement info as well as user’s cookie info against the DSP database to determine value of impression to media buyer. If it’s not a match: Cannot determine value of impression to media buyer, so it likely passes on bidding. If it does bid based on site/URL info, it bids at a lower value 4. DSP submits bid back to SSP, inserts ad tag or redirect to initiate ad-serving process if it wins 5. SSP receives bids from all parties and reviews each bid for highest price and media buyer’s info to ensure no conflict of interest (e.g., competitor site) 6. SSP passes ad tag of winning bidder along to the user’s browser to initiate the adserving process 7. Browser calls DSP to begin the ad-serving process Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 10
  11. 11. The display ad-serving process: A step-by-step explanation 1. Browser asks publisher’s ad server which ad to place 2. Ad server tells browser to check with SSP 3. Browser checks with SSP for ad placement instructions 4. SSP grabs ad specs, user info (cookie), site info, etc. 5. SSP decides most cost-beneficial course of action 6. Ad unit goes to auction 7. DSP and all inventory providers submit bids back to SSP along with ad redirects, should bid be accepted 8. SSP picks winner 9. SSP passes ad redirect along to user’s browser 10. Browser calls the winner, the DSP, for ad-serving instructions 11. DSP tells browser to call advertiser’s ad server 12. Browser calls advertiser’s ad server 13. Ad server tells browser to contact content delivery network for ad creative 14. Browser contacts content delivery network for ad creative 15. Content delivery network delivers ad creative and the ad is served Questions? Email amyhinojosa2020@gmail.com, marketer with 10+ years digital expertise 11

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