The document outlines the evolution of online advertising through 7 acts, describing how the industry has transitioned from direct deals between advertisers and publishers to the complex current ecosystem involving networks, exchanges, demand side platforms, and supply side platforms, with the goal of optimizing ad delivery through real-time bidding on individual impressions within milliseconds.

1. Agenda
1. Online Advertising in 7 Acts
2. Understanding Real Time Bidding
3. The Concept of Optimization
4. What I do
5. Open Discussion

2. Online Advertising in 7 Acts: Act 1
Advertiser Publisher
Advertiser Publisher
Advertiser Publisher

3. Act 1: Pros/Cons
Advertisers Viewpoint Publisher’s Viewpoint
Pros: Pros:
1. Control over placement of ad 1. High prices for inventory
2. Can buy premium inventory 2. Can do cool things with
3. Custom execution possible advertiser to enhance user
experience
4. Lots of creative options
3. Know exactly which
5. Wined and dined by publisher advertisers are on website
sales reps
Cons:
Con:
1. Only sell half their inventory at
1. Expensive (Sales reps mark best
up inventory)
2. Pay sales reps to go after
2. Separate deals with each agencies
publisher
3. Have to deal with many
3. Labor intensive advertisers

4. Online Advertising in 7 Acts: Act 2
Advertiser Publisher
Advertiser Publisher
Network
Network

5. Act 2: Pros/Cons
Advertisers Viewpoint Publisher’s Viewpoint
Pros: Pros:
1. Single point of contact for 1. Sell more inventory
buying ads across multiple 2. Don’t have to pay sales reps
sites
Cons:
2. Opens access to the Long Tail
1. None!
3. Less expensive than direct
buy
4. Wined and Dined by Networks Networks Viewpoint
Con: Pros:
1. Less premium inventory 1. They can exist
2. Less control over placement Cons:
of ads 1. Hard to match up supply and
demand exactly
(unpredictable delivery)

6. Online Advertising in 7 Acts: Act 3
Advertiser Publisher
Advertiser Publisher
Network
Network
Network

7. Online Advertising in 7 Acts: Act 3b (daisy
chain)
Advertiser
Network
Network
Network
Publisher

8. Act 3: Pros/Cons
Networks Viewpoint
Pros:
1. Solves supply/demand
imbalance
Con:
1. Creates daisy chain (like a
game a telephone)
2. Harder to maintain quality
experience because the
advertisers and publishers are
separated by multiple parties

9. Online Advertising in 7 Acts: Act 4
Advertiser Publisher
Advertiser Publisher
Network
Network
Exchange
Network

10. Act 4: Pros/Cons
Ecosystem Viewpoint
Pros:
1. Eliminates daisy chains
2. Polices ad quality

11. Online Advertising in 7 Acts: Act 5
Network Network
Publisher
Advertiser
Exchange
Publisher
Advertiser
Exchange
Exchange
Network

12. Act 5: Pros/Cons
Ecosystem Viewpoint
Pros:
1. More choices for ad
exchanges
Cons:
1. Defeats purpose of exchange
in the first place – this
ecosystem is a step backward
toward daisy chained
networks

13. Online Advertising in 7 Acts: Act 6
Network Network
Exchange
Publisher
Advertiser
DSP SSP
Exchange
Advertiser Publisher
Exchange
Network

14. Act 6: Pros/Cons
Ecosystem Viewpoint
Pros:
1. Tries to recapture efficiency
with single points of contact
for advertisers and publishers
Cons:
1. Way too many intermediaries

15. Online Advertising in 7 Acts: Act 7
Network Network
Exchang
DSP e
Publisher
Advertiser
Exchang SSP
ATD
DSP e
Advertiser Publisher
Exchang
e
ITD DSP
Network

16. Act 7: Pros/Cons
Ecosystem Viewpoint
Pros:
1. ATD’s keep more money for
Agencies
Cons:
1. Way way too many
intermediaries

17. Real Time Bidding – Set up
Network Network
Exchang
DSP e
Publisher
Advertiser
Exchang SSP
ATD
DSP e
Advertiser Publisher
Exchang
e
ITD DSP
Bidding parameters are
entered into “Bidders” up Network
front – some networks
have bidders – all DSP’s
have bidders

18. Real Time Bidding – Auction 1
Network Network
Exchang
DSP e
Publisher
Advertiser
Exchang SSP
ATD
DSP e
Advertiser Publisher
Exchang
e
ITD DSP
Every impression that
comes onto a publisher site
is auctioned off individually
Network – sending an “bid request”
to the exchange that is
acting as the publisher ad
server

19. Real Time Bidding – Auction 2
Network Network
Exchang
DSP e
Publisher
Advertiser
Exchang SSP
ATD
DSP e
Advertiser Publisher
Exchang
e
ITD DSP
Each exchange then calls
each bidder with a bid
request (as well as other
Network exchanges, who each call
their bidders)

20. Real Time Bidding – Auction 3
Network Network
You Exchang
won! e
DSP Publisher
Advertiser
Exchang SSP
ATD
DSP e
Advertiser Publisher
Exchang
e
ITD DSP
The exchange acting as
SOR then calculates who
has the highest bid and
Network sends a request back to
the bidder who won for an
ad

21. Real Time Bidding – Auction 4
Network Network
Ad
Served
Exchang
DSP e
Publisher
Advertiser
Exchang SSP
ATD
DSP e
Advertiser Publisher
Exchang
e
ITD DSP
The winning ad is then
served to the publisher
Network The whole process can
take no longer than 100
milliseconds

22. Real Time Bidding – Auction 5
Network Network
DSP Publisher
Advertiser
Exchang SSP
ATD DSP e
Advertiser Publisher
DSP Data
ITD
Provider During the auction
process, data providers
add more detail to the
profile of the person
viewing the ad