1.
Advertising Exchanges: Open the Market!
DFW Interactive Marketing Association
March 11, 2008
Jay Sears
Senior Vice President, Strategic Products and Business Development
ContextWeb, Inc.
917-408-6300 or sears@contextweb.com

2.
IAB Conference
February, 2008

3.
“My Space is
Your Space”
Wenda Harris Millard
Current state is “daunting but exhilarating” IAB Conference
February, 2008
The “consumer is calling the shots”
There are many “strange bedfellows”
Let’s sell value, not price
Let’s “distinguish between quality and commodity”
We “must not trade our assets like pork bellies”

4.
Brian McAndrews
SVP of Advertiser and
Publisher Solutions
Microsoft, Inc.
Former CEO, aQuantive
IAB Conference
February, 2008

5.
“Holy crap!!
What now?”
Rob Norman, Group M
IAB Conference
February, 2008

6.
Ad Exchanges
Why Now?
Media Fragmentation
Current Marketplace Responses
Portals, Sites, Ad Networks React
What is an Ad Exchange?
What Problems are Being Solved
Questions to Ask Your Ad Exchange

7.
Media Fragmentation Started in the 1980s
1986 2004
Head of the Class Friends – Series Finale
12.8 Nielsen rating 12.8 Nielsen rating
#40 show that year Most‐watched show
in 4 years

8.
More Choice - The Proliferation of Media
Today, media is fragmented
• 13,500 radio stations (4,400 in 1960)
• 17,300 magazine titles (8,400 in 1960)
• 82.4 TV channels per home (5.7 in 1960)
And the Web…
• Millions of sites
• Billions of pages

9.
Where Did Everybody Go?
• Decreased attention - consumers are tuning out
• Fragmented audience - there are more places for them to go
• Proactive advertising avoidance – less ability to be seen
• Decreased media efficiency – audiences going down, but prices
are increasing or holding
• Increased consumer control - pull vs. push
• Evolution of a completely new set of consumer habits &
expectations
• Democratization of content – consumers as creators as well as
consumers: “Citizens Media”

10.
Media Fragmentation
While portals were once the dominant source of news and information, page
views on the top 3 portals declined 18% from August 2004 to August 2007
vs. an overall 21% total internet growth in page views.
BUT, media spend is still lopsided—over 75% of media spend goes to the
top 10 Internet properties

11.
15-month Trend Line

12.
The Long Tail is The Passion Tail
Consumers use the “Long Tail” to pursue their passions.
Brands want passionate users.
Passionate users are in the right mindset
for a brand message.
Consumers live their “passion” across sites of all sizes
TheStreet.com & Cramers-Mad-Money.com
FoodNetwork.com & JoyOfBaking.com
SI.com & ChicagoHoops.com

13.
Pages of “Passion”
The “Passion Tail” is composed of pages – not sites.
75% of site entry is a “deep dive” via search.
The Street.com The Web
# of Visits
# of Visits
om
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Passion Passion
m
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C

14.
Offline vs. Online: Time Should Mean Money
Online Time Online Money
* Forrester Research, 2006
19% 5.8% ** Internet Advertising Bureau

15.
Fat Tail vs. Passion Tail
Property 2007(est)
1 Google 26%
77% of dollars 2 Yahoo! 15%
3 eBay 8%
Size of Sites
4 MSN 7%
5 AOL 7%
Pages of Passion 6 Monster 4%
7 IAC 3%
8 Fox Interactive 2%
9 Gannett 2%
10 CareerBuilder 2%
# of Sites
Passion

16.
Marketplace Response
Portals Acquire to Create “Platforms”
Yahoo! buys RightMedia ($850M), BlueLithium
($300M)
Google buys DoubleClick ($3.1B)
Microsoft buys aQuantive ($6.1B), AdECN
($75M)
AOL buys Tacoda ($275M), Quigo ($300M) to
create Platform A

17.
Marketplace Response
Branded Sites create Extended Networks
Martha Stewart creates Martha’s Circle
Reader’s Digest, Forbes, Warner Brothers, Glam Media

18.
Marketplace Response
Ad Networks
General networks are in decline
- Inefficiency
- Biased
Category specialty
- Adify estimates there are @ 75 niche networks
- Travel Ad Network, Gay Ad Network
Technology specialty
- Behavioral, contextual

19.
Vertical Ad Networks

20.
Marketplace Response – Travel Vertical
ComScore February 2008

21.
Behavioral Targeting

22.
Contextual Targeting

23.
Remaining Issues
But there is still FRICTION in the process
Paper IOs, faxes, phone calls
Lack of control, lack of transparency
Ad Exchanges can automate and provide control and transparency to
buyer and seller.
Where is the Long Tail in these solutions?
Portals have no “tail”
Branded sites create small networks with limited scale
Ad networks are typically “mid-tail” remnant solutions
Ad Exchanges can allow Long Tail publishers to participate and
control pricing.
Where is brand-safe media that can scale for the advertiser?
Advertisers that use portals and site specific buys need more reach
More brand dollars are coming onto the web
Ad Exchanges can allow the advertiser various placement controls.

24.
Questions for Your Ad Exchange
Inventory
Remnant or premium inventory?
Spot market (bided) vs. futures market (reserved inventory)?
Safe for brands or direct only?
Designed for agency and/or SEM workflow?
Pricing
Control of pricing for buyer and seller?
Pricing models: CPM, CPC, CPA?
Targeting available
Contextual, behavioral, other?
Graphical, rich media, text formats?
Publisher types
Long Tail and/or large site and/or ad network inventory?
Inventory from content sites and/or social media?

25.
Randall
Jerry Yang
CEO, Yahoo!
Rothenberg
IAB
Sue Decker
CFO, Yahoo!
IAB Conference
February, 2008

26.
Randy Falco
Chairman and CEO
AOL

27.
From Brian McAndrews
Microsoft, Inc.
IAB Conference
February, 2008

28.
Rob Norman, GroupM
“Today, we plan and trade on
behalf of our clients. Tomorrow
and in some places today we
also trade on our own behalf
where we can create value and
deserve our place in the chain”
“We charge at the moment for
the cost of inputs but again if we
charge on the basis of the value
Photo credit: IAB
of the outputs we are perfectly
entitled to do that too.”

29.
Get ADSDAQ-ified:
Join ADSDAQ: http://www.ADSDAQ.com
Read the Blog! http://blog.contextweb.com
ContextWeb: http://www.contextweb.com
In Dallas
Jay Sears Scott Bowdouris
SVP, Strategic Products and Business
Senior Account Executive
Development
800-452-7967 or
917-408-6300 or sears@contextweb.com
sbowdouris@contextweb.com

30.
After this slide is all extra / junk for
now

31.
What Does This Mean to Advertisers?
Trends Implications
Increasingly fragmented media Need for diverse media mix
environment and declining ratings for to generate reach
traditional media vehicles
The empowered consumer and the Customize message and
development of personalized media have a plan that includes
emerging technology
Standing out amongst the Integrated communication to
clutter/competition by seeking out media surround consumer with
greater more relevant impact
apertures that resonate with consumers

32.
The reality of today’s media
environment
Fragmented audience
Decreased media efficiency

33.
MEDIA
1 a world of
a world of •
Broadcast TV
LIMITED
LIMITED •
9 options
options Radio
•
8 PUSHED
PUSHED Print
to mass
to mass •
0 consumers
consumers
Outdoor
•
CONSUMERS

34.
•
Broadcast TV
•
Cable TV
•
Print
•
Outdoor
MEDIA •
Digital Radio
•
a world of
a world of Satellite Radio
•
2 INFINITE
INFINITE Internet
•
options
options DVRs/VOD
0 PULLED
PULLED
•
IPTV
•
1 by individual
by individual Video Search
•
consumers
consumers Blogs
0 •
Podcasting
CONSUMERS •
Advergaming
•
Mobile Phones
•

35.
The True Exchange
Redundant – may be deleted
True control for publishers and advertisers through
the new exchange model.
The Publisher’s Media Inventory Publishers
Premium Inventory >>>>> Remnant Inventory Premium
D
I
R Auction True
Agency Network Pricing Exchange Exchange
E
C
T Agency
Agency Agency
Advertisers Advertisers
Negotiated
ContextWeb
Automated
37

36.
Online Advertising Marketplace Has Evolved
The Publisher’s Media Inventory
Premium Inventory >>>>> Remnant Inventory Publishers
Premium
Control of D
pricing has I Auction True
Agency Network Exchange
R Pricing Exchange
been driven by E
advertisers. C
T
Agency Agency
Advertisers
Negotiated
Advertisers ContextWeb
Automated