The document discusses the evolution of programmatic advertising models and the need for new ad formats to improve user engagement. It describes current programmatic models like open marketplaces, private marketplaces, and programmatic guaranteed buys. While targeting and efficiency have improved, ad formats have not changed much since the 1990s, and user engagement is lacking. The industry now needs to invest more in new formats that integrate ads with content better to balance both targeting objectives and user experience.

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P R E S E N T E D B Y D e n n i s B u c h h e i m ⎪ A u g u s t 1 4 , 2 0 1 4
The Possibilities of Programmatic

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Yahoo 2014 Confidential & Proprietary.
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The promise of digital advertising
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Yahoo 2014 Confidential & Proprietary.
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T A R G E T I N G & E F F I C I E N C Y
USERENGAGEMENT
Achieving 1:1 through programmatic
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Yahoo 2014 Confidential & Proprietary.
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OFFERING TYPE OF BUY PRICING PARTICIPANTS ALSO CALLED...
Programmatic
Guaranteed
Reserved Fixed One Seller
One Buyer
• Programmatic Direct
• Programmatic Premium
• Premium Direct
• Programmatic Reserved
• Automated Guaranteed
Private
Marketplace
Unreserved Auction One/Few Sellers
Few Buyers
• Deal ID
• Private Auction
• Invitation-Only Auction
• Closed Auction
• Private Access
Open
Marketplace
Unreserved Auction Many Sellers
Many Buyers
• Open Exchange
• Open Auction
Programmatic models

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Yahoo 2014 Confidential & Proprietary.
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Source: AdExchanger, Q214 State of Programmatic Media report
0%
10%
20%
30%
40%
50%
60%
70%
Open Marketplaces Private Marketplaces Programmatic Guaranteed
2014 2015
-16%
+14%
+60%
Alternative models on the rise

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Yahoo 2014 Confidential & Proprietary.
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Private Marketplaces
B E N E F I T S T O AD V E R T I S E R S
Exclusive,
high-quality
inventory
Limited
competition
Brand
protection
ControlTransparency
6

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Yahoo 2014 Confidential & Proprietary.
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Programmatic Guaranteed
B E N E F I T S T O AD V E R T I S E R S
Placement
guarantee
No
competition
Operational
efficiency
Volume
guarantee
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Yahoo 2014 Confidential & Proprietary.
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T A R G E T I N G & E F F I C I E N C Y
USERENGAGEMENT
Industry has evolved toward
targeting and efficiency
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Yahoo 2014 Confidential & Proprietary.
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Efficiency…at any cost?

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Yahoo 2014 Confidential & Proprietary.
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Yahoo 2014 Confidential & Proprietary.
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An unbalanced situation
• Targeting driven by demand-
side objectives
• Efficiency focused on inventory
standardization and bidding
TARGETING &
EFFICIENCY • Supply-side doesn’t know what’s
being shown to their users
• Ad formats haven’t evolved
enough since 1990s
USER
ENGAGEMENT

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Yahoo 2014 Confidential & Proprietary.
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Industry has to make greater investments in user engagement
Industry Dilemma
No new
(supply) without
demand
AD FORMATS
No
without new proven
ad formats (supply)
READY DEMAND
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Yahoo 2014 Confidential & Proprietary.
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Stream Ads

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Yahoo 2014 Confidential & Proprietary.
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Content Marketing

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Yahoo 2014 Confidential & Proprietary.
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Image Ads

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Yahoo 2014 Confidential & Proprietary.
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Display Ads

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Yahoo 2014 Confidential & Proprietary.
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Video Ads

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Yahoo 2014 Confidential & Proprietary.
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Search Ads

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Yahoo 2014 Confidential & Proprietary.
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Where do we go from here?
QUAL IT Y
SUPPLY
QUAL IT Y
DEM AN D
GOOD
T ARGET I NG
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Engine is only as fast as its
slowest part
• Industry must place higher importance on
user engagement
• Ad formats will be more integrated into
content with modular creative
• Publishers will begin to influence which ads
are shown and how they are displayed
• The lines between programmatic models
will blur
• A unified advertising platform is required to
navigate these changes

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Thank you!