The online ad technology marketplace

Sep 19th, 2011, New York City
1

Agenda
•  Introduc*on
–
Jeffrey
Silverman

•  Presenta*on
–
Sco9
Hoffman,
Geoff
Judge

•  Break
(Networking)

•  Panel
Roundtable
Discussion
led
by
Nick
MacShane
–

Progress
Partners

•  Brian
Kaminsky
–
Huffington
Post

•  Art
Muldoon
–
Accordant
Media

•  Albert
Azout
–
Sociocast

•  Sco9
Meyer
–
Evidon

•  Moritz
Loew
–
MSNBC

•  Jon
Greenwood
–
Media
Informa*on
Group

2

Coaching Team
Jeffrey
Silverman

Partner
Laconia
Ventures

Former
execu*ve
at
DoubleClick

On
Twi9er
@LaconiaVentures

Geoff
Judge

Partner
iNovia
Capital

Former
execu*ve
and
founder
at
24/7
Media

On
Twi9er
@GPJudge

Sco4
Hoffman

COO
Sociocast

Former
execu*ve
at
Yahoo

On
Twi9er
@Cliqology

3

The year is 1995
•  Bill
Clinton
is
president.

•  Jerry
Garcia
is
s*ll
singing.

•  Toy
Story
is
leading
at
the
box
office.

•  The
O.J.
Simpson
trial
is
pre-‐emp*ng
soap
operas.

•  The
Dow
Jones
has
closed
above
4,000
for
the
first
*me.

•  Pamela
Anderson
wed
Tommy
Lee
in
a
white
bikini.

•  “Java”
is
s*ll
a
cup
of
coffee.

•  Email
is
something
for
computer
science
geeks.

•  And
online
adver*sing
was
about
to
be
born….

5

In 1995…
•  Buying
online
media
was
a
simple
transac*on

•  The
publisher
had
a
direct
rela*onship
with
marketer

•  “Banner”
ads
were
predominant

•  Purchased
inventory
ran
on
a
publisher,
either
every
page
or

randomly,
for
the
length
of
contract

•  There
was
no
underlying
technology

•  There
was
no
repor*ng

6

In 1996…
•  A
technology
called
Ad
serving
was
born

•  Defini*on:
Ad
serving
describes
the
technology
and
service

that
places
adver*sements
on
web
sites.

•  Typical
func*onality
of
ad
servers
include:

•  Uploading
adver*sements
and
rich
media.

•  Trafficking
ads
according
to
differing
business
rules.

•  Targe*ng
ads
to
different
users,
or
content.

•  Repor*ng
impressions,
clicks,
post-‐click
&
post-‐impression
ac*vi*es,

and
interac*on
metrics.

•  Ad
serving
is
the
godfather
of
all
the
ad
technologies
in
the

marketplace
today

•  Ad
serving
was
primarily
a
back-‐office
solu*on

7

Significant other advances
•  Avenue
A
&
Adver*sing.com

•  Tracking
backend
performance

•  Dart
For
Adver*sers
(DFA)

•  Aﬃliate
Networks

•  Amazon

•  Linkshare,
BeFree,
Commission
Junc*on

•  Rich
Media

•  AdSense

8

Social Media creates
massive amounts of “data
exhaust” on people

12

1995 2010 %
Data Size / Webpage 14.1k 320.1k +2,285%
Data Transfer Speed 28.8k Baud 10.15 Mbps +44,020%
People on the Net 16 Million 1,971 Million +12,318%
Hours consumed .5 Hours a Week 13 Hours a Week +2,600%
Data Storage Cost $100 = 117 Mb $100 = 1.2 Tb +1,041,000%

18

What’s all this technology mean
•  To
the
investor

•  A
lot
of
capital
investments
have
been
made
in
the
adver*sing

ecosystem
space,
and
investment
con*nues.

•  To
the
entrepreneur

•  Barrier
to
entry
into
the
space
has
never
been
lower;
So
if
you
can

dream
it
do
it,
but
don’t
forget
someone
else
may
have
already
or
will

“copy”
your
solu*on
if
your
successful.

•  To
the
consumer

•  A
future
where
relevant
marke*ng
messages
are
delivered
when

they
make
the
most
impact.

20

The complete picture
General'Ad'Agency Media'Buying'Platform DSP Ad'Exchange Contextual Search CPA Social'Tool Portals Social'Network
Havas Mobext+(Havas) AdBuyer.com adapTV ContextWeb Bing+(MSFT) Advertising.com Clearspring Aol Facebook
IPG ATOM AppNexus AdBrite Google Google Affiliate+Fuel Disqus MSN identified
MDC+Partners AudienceFuel Chango ADECN+(MSFT) Peer39 Kanoodle+(Seevast) Azoogle+Ads Gigya Windows+Live LinkedIn
Omnicom+Group b3 Collective BidPlace+(AOL) Pulse360+(Seevast) LookSmart C+J+(VCLK) Livefyre Yahoo! Google+
Publicis Cadreon DataXu ContextWeb Yahoo! MIVA CPX ShareThis MySpace
WPP Varick+Media Invite+(GOOG) DoubleClick+(GOOG) Yahoo! News'&'Info
Vivaki LucidMedia OpenX Behavioral CPM Publisher'Tool CNN+(TWX) Blog
Digital'Ad'Agency MediaMath RightMedia+(YHOO) AudienceScience Email 24/7RealMedia+(WPP) FatTail HuffPo+(AOL) Blogger
360i Ad'Optimization TheTradeDesk SpecificMedia Adknowledge BurstMedia Lijit IMDb+(AMZN) TypePad
Acronym+Media Adisn TURN Data'Exchange/Aggr Undertone+Netwk silverPOP Casale Yieldbot MSNBC+(CMCS.A) Xanga
AKQA Adroit+(MediaMath) Acerno+(AKAM) Wunderloop DrivePM+(MSFT) YieldBuild NYTimes.com
Ave+AcRazorfish AudienceFUEL DSP'I'Data AlmondNet [X+1] InIText Gorilla+Nation Yieldex Video
Beyond+Interactive ChoiceStream Magnetic BlueKai Kontera PrecisionClick Content Aol+
Carat+Fusion Criteo Media6Degrees Demdex+(Adobe) Social Vibrant+Media Right+Media+(YHOO) SSP AC+(YHOO) Dartfish.tv
GSD&M Dapper+(YHOO) Simpli.fi eXelate 33Across Tribal+Fusion AdMeld+(GOOG) Demand+Media Facebook
iCrossing+(HTV) Exponential+Interact. Triggit Legolas+Media Adapt.ly RSS United+Online PubMatic Patch+(AOL) Vimeo+(IACI)
IMPAQT SnapAds X+1 Lookery Buddy+Media FeedBurner+(GOOG) Rubicon Skyword Youtube+(GOOG)
Innovation+Interact. Sociocast Magnetic Facebook Pheedo CPC Suite101
iProspect Teracent Verification/Attribution RapLeaf Media6Degrees AdBrite Ad'Server Photo'Sharing
Moxie Tumri Admetry TrackSimple Mobile AdCloud Accipter+(MSFT) Email Facebook
OMD+Digital AdSafe Video'/'Rich'Media AdMob+(GOOG) Google AdVantage Gmail Filmloop
Organic Data'Optimization AdXpose Data'Supply Adconion ADTECH+(AOL) MSN+Ad+Center AdTech+(AOL) MSN+Hotmail Flickr
RadiumOne Accordant+Media AnChor Acxiom BBE Crisp+Wireless Yahoo! Atlas+(MSFT) Yahoo!+Mail Photobox
The+MiG Adchemy ClickFacts Datalogix+(ORCL) Brightcove Go2 Bluestreak+(Aegis) Photobucket
Universal+McCann Aggreg.+Knowledge ClickForensics eBay BrightRoll Greystripe Vertical'Focus DoubleClick+(GOOG) Search Photorocket
AudienceFUEL Convertro Experian LightningCast+(AOL) InMobi Adify MediaPlex Aol. Winkflash
Emerging'Holding Bizo Dimestone Gageln Revver JumpTap BOOM+Media+(Eons) OpenAdstream Ask+(IACI)
Arkitektive Brilig DoubleVerify Hoovers ScanScout+(Tremor) Xtify FreeFi OpenX Bing+(MSFT) Online'Gaming
Engine+UK/USA Datran+Media Evidon Infogroup Tremor+Video Millennial+Media Glam ValueAd Google Activision
Magnet+360 Dotomi+(VCLK) TagMan IRI Vibrant Mojiva Gorilla+Nation Zedo Technorati EA
Project:Worldwide JovianData Vizu TargusInfo VideoEgg Transpera IDG+Tech+Network Yahoo! Newtoy
W2+Group Milabra YuMe Jumpstart Yield'Optimization Pogo
Permuto Analytics Ad'Ops/Infrastructure Local'Focus NetShelter Yieldbot Rovio
Quantcast AdSafe DDS Affiliate'Programs Centro Travel+Ad+Network Yieldbuild SecondLife
Red+Aril Coremetrics+(IBM) Adify Affiliate+Fuel Go2 ZDNet Yieldex Yahoo!+Games
Google+Analytics Centro C+J+(VCLK) MediaSpan Zynga
Rich'Media Localytics MediaBank Junction WorldNow Proprietary App'Network
Eyewonder Omniture+(ADBE) Operative LinkShare iAd+(AAPL) W3i
Pictela+(AOL) Trust+Metrics Solbright Blog FreeFi ZuMobi
PointRoll+(GCI) Unica+(IBM) Theorem Audience'Targeting Federated+Media
SpongeCell Webtrends TraffIQ xGraph Pajamasmedia

Visit: www.industrymaps.com
22 © 2011 Progress Partners, Inc. All right reserved.

Advertising/Media Agencies


Defini8on:

Act
as
purchasing
agent
and
execu*on
arm
on
behalf
of

marketers.
Research,
data,
crea*ve
may
also
be
included.
Trading
desks,

op*miza*on
by
media
vendor,
evalua*on
&
ac*va*on
of
3rd
party

technology.

Upside:

Not
associated
with
a
single
point
solu*on;
can
use
all
technology

available
for
benefit
of
clients

Downside:

Ad
Agencies
are
primarily
service
businesses
and
con*ngent
of

good
rela*onships
with
major
marke*ng
clients;
act
cau*ously
as
it
isn’t

their
direct
money;
some*mes
in
conflict
with
client
needs.

24

Current
marketplace:

Adver*sing/media
agencies
con*nue
to
consolidate

under
the
major
holding
companies.
Independent
agencies
specializing
in

social
media
are
hot
acquisi*on
targets.

In
the
Future:

Look
for
more
media
agencies
to
develop
or
acquire
their

own
technology;
for
example,
WPP’s
Xaxis,
a
data
mining/exchange.

25

2006 – 6 Holding Companies

26

2010 – 4 Holding Companies

27

Ad Exchanges


Ad Exchanges
Deﬁni8on:

“Wall
Street”
like
ad
exchanges
are
technology
plaoorms
that

facilitate
the
bidding,
buying
and
selling
of
online
media
adver*sing

inventory
from
mul*ple
ad
networks.
The
approach
is
technology-‐driven
as

opposed
to
the
historical
approach
of
nego*a*ng
price
on
media
inventory.

Upside:

Ad
exchanges
can
be
useful
to
both
buyers
(adver*sers
and

agencies)
and
sellers
(online
publishers)
because
of
the
eﬃciency
&
liquidity

they
provide.

Downside:

Publishers
have
li9le
control
over
“intangible”
pricing
like
brand,

caliber
of
content,
etc.

Supply/demand
economics
is
the
driving
force,
and

to
date
supply
has
consistently
out-‐paced
demand.

29

Ad Exchanges
Current
Marketplace:

Ad
exchanges
and
the
organiza*ons
that
purchase

inventory
on
them
(commonly
referred
to
as
DSPs)
are
growing
rapidly,
as

they
present
an
opportunity
to
use
advanced
data
output
to
drive
scale
and

ROI
on
media
investments.

In
The
Future:

Look
for
private
exchanges,
where
associated
publishers
who

have
rela*onships
oﬀer
their
own
inventory
to
selected
marketers
on
an

automated
basis.

30

Marketing Data Services


Defini8on:
Data
Services
companies
perform
a
variety
of
different
ac*vi*es

around
marke*ng
data
primarily;
collec*on,
storing,
and
selling
data.
Some

data
services
also
make
data
opera*onal,
by
op*mizing
audiences,
crea*ng

marke*ng
segments,
and
matching
offline
customers
to
online
customers.

Upside:

Data
has
proven
itself
a
very
valuable
commodity
over
the
past

several
years.
Search
behavior
data
is
one
of
the
large
contribu*ng
factors
to

Google.
Many
other
data
sets,
like
Social
&
Check-‐in,
have
yet
to
be

untapped.
Data
can
be
applied
to
many
online
channels,
like
Video
&

Mobile.

Downside:
The
two
current
dangers
facing
the
marke*ng
data
services

companies
are
an
overreliance
on
cookie
technology
and
US
and
Global

legisla*on
around
consumer
privacy.

33

Current
Marketplace:

The
marke*ng
data
services
are
s*ll
in
their

nascence.
There
is
huge
fragmenta*on
in
how
data
is
accessed
and
how
it
is

used.
Quality
of
data
and
collec*on
methods
are
s*ll
heavily
scru*nized.

In
The
Future:

Look
for
centralized
clearing
houses
for
data.
Companies
like

Blue
Kai
and
eXcelate
have
already
started
this
trend.
Look
for
the
big

owners
of
marke*ng
data
to
join
the
marketplace;
Google,
Facebook,
and

Yahoo.

34

Ad Networks


Ad Networks
Deﬁni8on:
An
online
adver*sing
network
or
ad
network
is
a
company
that

connects
adver*sers
to
web
sites
that
want
to
host
adver*sements.
The
key

func*on
of
an
ad
network
is
aggrega*on
&
arbitrage
of
ad
space
supply

from
publishers
and
matching
it
with
adver*ser
demand.

Upside:

Ad
Networks
have
large
reach,
various
diﬀerent
points
of
data

collec*on,
which
lead
to
big
revenue.
It
is
es*mated
that
Ad
Networks

capture
20%+
of
all
online
adver*sing
spending.

Downside:
As
networks
are
dependent
on
performance,
margin
pressure,

compe**on,
barrier
to
entry
low,
constant
need
to
develop/purchase
new

technology,
need
to
tap
new
inventory
sources.
Typically
guarantee
CPM
&

$
Volume
to
Publisher.

37

Ad Networks
Current
Marketplace:

Ad
networks
choosing
sides
(morphing
into
SSP
or

DSP).
Ver*cal
content
networks
models
gaining
trac*on.
We
are
also
seeing

growth
in
Mobile
ad
networks.

In
The
Future:
While
the
role
of
Ad
Networks
is
a
certainty,
because
of
their

ease
of
use
(for
both
publisher
and
marketer),
their
longevity
in
current
form

is
endangered,
primarily
by
the
advent
the
exchanges
and
the
evolving

nature
of
programma*c
buying
and
selling
of
adver*sing
inventory.

38

Ad Networks – By Pricing Model


Ad Networks – By Pricing Model
Performance
Marke8ng:
Performance
marke*ng
is
a
marke*ng
prac*ce
in

which
a
business
rewards
one
or
more
media
partners
for
each
visitor
or

customer
brought
about
by
the
media
Partners'
own
marke*ng
efforts.

Cost
Per
Thousand
(CPM):
CPM
is
used
for
measuring
the
worth/cost
of
a

specific
e-‐marke*ng
campaign.
Each
*me
a
online
adver*sement
loads

onto
a
user's
screen
it
counts
as
one
impression.

Cost
Per
Click
(CPC):

is
an
Internet
adver*sing
model
used
to
direct
traffic
to

websites,
where
adver*sers
pay
the
media
service
when
the
ad
is
clicked.

Cost
Per
Ac8on
(CPA):
(some*mes
known
as
Pay
Per
Ac8on
or
PPA)
is
an

online
adver*sing
pricing
model,
where
the
adver*ser
pays
for
each

specified
ac*on
(a
purchase,
a
form
submission,
and
so
on)
linked
to
the

adver*sement.

40

An Aside: Who owns the Risk

CPM CPC CPA
• Cost Per Thousand • Cost Per Click • Cost Per Activity
• Performance Risk • Shared Risk • Performance Risk
shouldered between Marketer shouldered by
Marketer and Publisher publisher

41

Publisher Tools


Publisher Tools
Deﬁni8on:
HTML
elements
that
can
easily
be
added
to
a
web
page,
instead

of
the
Publisher
having
to
build
them.
Common
types
of
Publisher
Ad
Tools

are
Search,
Social
Sharing,
Ra*ngs/Reviews,
Commen*ng
systems.

Upside:

These
tools
have
wide
coverage
and
reach.
Their
appeal
and
ease

of
use,
even
for
a
rela*vely
unsophis*cated
web
publisher
have
allowed

these
companies
to
successfully
cross
the
bridge
between
professionally

produced
web
sites
to
user
generated
content.

Downside:
Publisher
ad
tools
are
rela*vely
easy
to
build,
so
distribu*on
and

syndica*on
of
the
tools
becomes
the
only
barrier
to
entry.
Rela*onships

with
publishers
is
oven
*mes
not
mone*zable
through
direct
adver*sing
in

within
the
space
of
the
widget

43

Publisher Tools
Current
Marketplace:

Many
Publisher
Ad
tools
are
currently
abandoning
an

overt
mone*za*on
eﬀorts
with
direct
adver*sing
and
rather
becoming

suppliers
of
data
to
the
ad
marketplace.

In
The
Future:

Look
for
a
con*nued
roll-‐up
in
this
space.
As
independent

publisher
tools
become
more
popular
and
garner
higher
distribu*on,
bigger

companies
with
large
sets
of
tools
will
buy
them
up.

44

Publisher Ad Infrastructure


Deﬁni8on:

Sets
of
tools
like
Ad
Servers,
Ad
Op*mizers,
Sell
Side
Plaoorms

(SSP)
all
designed
to
deliver
the
maximum
revenue
for
a
publishers
ad

inventory.
The
bulk
of
the
these
tools
decide
where,
when,
and
how
many

*mes
to
place
and
adver*sement
on
a
publishers
website.

Upside:

These
tools
are
ubiquitous,
especially
Ad
Servers,
are
an
essen*al

part
of
any
successful
website
adver*sing
business.

Downside:

This
is
a
mature
business,
with
li9le
innova*on
or
growth.

46

Current
Marketplace:

The
technology
side
of
the
business
has
largely
gone

undeveloped
since
the
advent
of
the
adver*sing
networks
&
the
combined

purchases
of
DoubleClick
by
Google
&
Atlas
by
Microsov.
Commodity
like

pricing.

In
The
Future:

Look
for
companies
that
gather/protect/organize
publisher

data
sets
and
integrate
into
ad
servers
for
op*miza*on
of
inventory
within

their
site,
and
op*miza*on
of
price
that
a
publisher
can
get
from
a
buyer.

47

Publishers / Content Creators


Deﬁni8on:

The
dissemina*on
of
literature
or
informa*on
—
the
ac*vity
of

making
informa*on
available
to
the
general
public.
In
some
cases,
authors

may
be
their
own
publishers,
meaning:
originators
and
developers
of

content
also
provide
media
to
deliver
and
display
the
content.

Upside:

The
web
has
allowed
any
one
to
become
a
content
creator
and

disseminator
of

news,
informa*on
and/or
opinion
as
very

low
cost
of

distribu*on.

Downside:

One
person
(bloggers)
can
now
compete
on
equally
foo*ng

with
giant
publishers
(Conde
Nast).

49

Current
Marketplace:

Tradi*onal
publishers
(Time,
Inc.,
NY
Times,
etc.)
are

not
only
struggling
to
compete
with
online
publishers
(TechCrunch)
and
as

well
as
protect
their
stories
from
aggregators
(Google,
Yahoo,
etc.).
but

develop
a
revenue
stream
beyond
adver*sing.

In
The
Future:

Look
for
tradi*onal
publishers
to
streamline
their
businesses

by
focusing
more
on
digital
distribu*on
and
less
on
print.

Also
expect
to
see

more
publishers
charge
for
their
online
content
as
NY
Times
and
Wall
Street

Journal
does.

50

Panel Roundtable Discussion
•  Nick
MacShane

-‐
Founder
&
Sr.
Managing
Director
–

Progress
Partners
–
Moderator

52

•  Brian
Kaminsky
–
SVP
/
GM,
Huﬃngton
Post
Media
Group

53

•  Art
Muldoon
–
CEO
&
Co-‐Founder,
Accordant
Media

54

•  Albert
Azout
–
CEO
&
Founder,
Sociocast

55

•  Moritz
Loew
–
Chief
Agency
Oﬃcer,
MSNBC
Interac*ve

56

•  Sco9
Meyer
–
CEO
&
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The online ad technology marketplace

The online ad technology marketplace

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The online ad technology marketplace