advertising exchanges - open the market!
TRANSCRIPT
Advertising Exchanges: Open the Market!DFW Interactive Marketing Association
March 11, 2008
Jay SearsSenior Vice President, Strategic Products and Business Development
ContextWeb, Inc.917-408-6300 or [email protected]
IAB ConferenceFebruary, 2008
“My Space is Your Space”
Current state is “daunting but exhilarating”The “consumer is calling the shots”There are many “strange bedfellows”Let’s sell value, not priceLet’s “distinguish between quality and commodity”We “must not trade our assets like pork bellies”
Wenda Harris MillardIAB ConferenceFebruary, 2008
Brian McAndrewsSVP of Advertiser and
Publisher SolutionsMicrosoft, Inc.
Former CEO, aQuantive
IAB ConferenceFebruary, 2008
Rob Norman, Group MIAB ConferenceFebruary, 2008
“Holy crap!!What now?”
Ad Exchanges
Why Now?Media Fragmentation
Current Marketplace ResponsesPortals, Sites, Ad Networks React
What is an Ad Exchange?What Problems are Being Solved
Questions to Ask Your Ad Exchange
Media Fragmentation Started in the 1980s
2004
Friends – Series Finale
12.8 Nielsen rating
Most‐watched showin 4 years
1986
Head of the Class
12.8 Nielsen rating
#40 show that year
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
More Choice - The Proliferation of Media
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”
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
15-month Trend Line
The Long Tail is The Passion Tail
TheStreet.com & Cramers-Mad-Money.comFoodNetwork.com & JoyOfBaking.com
SI.com & ChicagoHoops.com
Consumers use the “Long Tail” to pursue their passions.
Brands want passionate users.
Passionate users are in the right mindsetfor a brand message.
Consumers live their “passion” across sites of all sizes
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
Home Pag
e
Investi
ng
Mutual Funds
Cramer’
s
Mad M
oney
AOLTheS
treet.
com
Cramers
-mad
-money
.com
# of
Vis
its
# of
Vis
its
The Web
Passion Passion
Offline vs. Online: Time Should Mean Money
* Forrester Research, 2006
** Internet Advertising Bureau
Online Time Online Money
5.8%19%
Fat Tail vs. Passion Tail
CareerBuilder
Gannett
Fox Interactive
IAC
Monster
AOL
MSN
eBay
Yahoo!
Property26%1
15%2
8%3
7%4
7%5
4%6
3%7
2%8
2%9
2%10
2007(est)
77% of dollars
Size
of S
ites
Passion
# of Sites
Pages of Passion
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
Marketplace Response
Branded Sites create Extended NetworksMartha Stewart creates Martha’s CircleReader’s Digest, Forbes, Warner Brothers, Glam Media
Marketplace Response
Ad NetworksGeneral 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
Vertical Ad Networks
Marketplace Response – Travel Vertical
ComScore February 2008
Behavioral Targeting
Contextual Targeting
Remaining IssuesBut there is still FRICTION in the process
Paper IOs, faxes, phone callsLack 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 scaleAd 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 reachMore brand dollars are coming onto the web
Ad Exchanges can allow the advertiser various placement controls.
Questions for Your Ad ExchangeInventory
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?
PricingControl of pricing for buyer and seller?Pricing models: CPM, CPC, CPA?
Targeting availableContextual, behavioral, other?Graphical, rich media, text formats?
Publisher typesLong Tail and/or large site and/or ad network inventory?Inventory from content sites and/or social media?
Randall Rothenberg
IAB
Jerry YangCEO, Yahoo!
Sue DeckerCFO, Yahoo!
IAB ConferenceFebruary, 2008
Randy FalcoChairman and CEO
AOL
From Brian McAndrewsMicrosoft, Inc.
IAB ConferenceFebruary, 2008
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 valueof the outputs we are perfectly entitled to do that too.”
Photo credit: IAB
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Jay SearsSVP, Strategic Products and Business Development917-408-6300 or [email protected]
In DallasScott Bowdouris
Senior Account Executive800-452-7967 or
After this slide is all extra / junk for now
What Does This Mean to Advertisers?Trends Implications
Increasingly fragmented media environment and declining ratings for traditional media vehicles
Need for diverse media mix to generate reach
The empowered consumer and the development of personalized media
Customize message and have a plan that includes emerging technology
Standing out amongst the clutter/competition by seeking out media apertures that resonate with consumers
Integrated communication to surround consumer with greater more relevant impact
The reality of today’s media environment
Fragmented audience
Decreased media efficiency
1980
MEDIA
CONSUMERS
•Broadcast TV
•Radio
•Outdoor
•
a world of
LIMITED
options
PUSHED
to mass
consumers
a world of
LIMITED
options
PUSHED
to mass
consumers
•Broadcast TV
•Cable TV
•Outdoor
•Digital Radio
•Satellite Radio
•Internet
•DVRs/VOD
•IPTV
•Video Search
•Blogs
•Podcasting
•Advergaming
•Mobile Phones
•
a world of
INFINITE
options
PULLED
by individual
consumers
a world of
INFINITE
options
PULLED
by individual
consumers
2010
MEDIA
CONSUMERS
37
The True Exchange
DIRECT
Agency Network AuctionPricing Exchange
Advertisers
Agency Agency
The Publisher’s Media InventoryPremium Inventory >>>>> Remnant Inventory
Negotiated
Automated
True control for publishers and advertisers throughthe new exchange model.
True Exchange
ContextWeb
Agency
PublishersPremium
Advertisers
Redundant – may be deleted
Online Advertising Marketplace Has Evolved
DIRECT
Negotiated
Automated
Control of pricing has
been driven by advertisers.
Advertisers
Agency Network AuctionPricing Exchange
Agency Agency
The Publisher’s Media Inventory
Premium Inventory >>>>> Remnant Inventory
True Exchange
ContextWeb
PublishersPremium
Advertisers