Millennial Global POV

Millennial Media

Millennial Media was founded in 2006 with the goal of aggregating mobile WAP sites to make mobile buying scalable for advertisers. As mobile grew, Millennial grew with it and became one of the largest mobile ad networks in the US and expanded into application based advertising.

In recent years the mobile ad network space has become very competitive with very little differentiating features between companies. Understanding the market place in 2013, Millennial purchased one of its closest competitors Jumptap who was the market leader for data and targeting. The acquisition made Millennial even stronger in the space but as mobile technology advances advertisers look for more transparency which is why Millennial recently partnered with Appnexus to pilot a DSP launch.

Global Market Place: Mobile Programmatic

Unfortunately there is limited 3rd party data available that speaks to the size of the major competitor for each region. In fact the syndicated research tools in the US cannot accurately project the audience size for mobile ad networks due to the lack of cookie based tracking. Millennial claims they are responsible for over 30% of all mobile purchased programmatically at a global level (data source not provided).

The mobile network space continues to be competitive and although there is not market share break outs by region available; below is a chart of the major mobile network in each region. On top of the mobile networks StrikeAd, Adelphic, Turn and Media Math are DSPs that can be used globally to garner scale.

Previous Experience

Previous Spend:GM is very familiar with Millennial in the US and last year spent $3.6MM with them and $3.1MM with Jumptap for a combine total of $6.7MM. Thru May of 2014 GM has booked $3.1MM with Millennial and the divisions are forecasting an additional $2.9MM for the remainder of the year. This would put GM on pace for $6MM with Millennial in 2014. Outside of the US, GM has only purchased Millennial in Canada at a very minimal spend.

Previous Performance:Millennial has been one of the strongest performers in the mobile network space in the US which has made them one of a few preferred mobile partners.

Package/Offer:Millennial is looking for an $18MM global commitment with $13.8MM in the US and $4.2MM in other regions which is almost triple what we are projecting. With this commitment we would get the following:

-33% Rate reduction on current rate card-Creative consultancy including production resources & first look opportunities-Access to insights by region-Metrics, data and dashboards

-12 Brand lift studies-4 Cross screen attribution studies -8 Studies on foot traffic to dealership-6 Auto purchase rate studies-Data pipeline into reporting (cross channel campaign performance)

Considerations:In efforts to help clients get more efficient with their programmatic dollars, agencies had minimized their spend with display ad networks about five years ago and video networks 2-3 years ago to build trading desks. Trading desks are essentially an extension of the digital buying team that purchases across multiple DSPs and is transparent on both rates & sites as well as provides market insights. Prior to trading desk it was rumored that networks took 50-60% margins on the inventory purchased. Mobile inventory hasn’t been as readily available via DSP’s in the last couple year however there has been quite a bit of evolution in the past 18 months and spend is starting to follow.

Millennial is proposing a 100% managed service where they purchase inventory off their exchange while managing the bids and site level optimization. As part of a cost exercise we had Aegis’s Trading Desk AMNet pull average CPM by country with three different mobile DSPs. On average the inventory that AMNet can buy via a self-service platform is 30-40% less expensive than the rates Millennial is offering thru their managed service.

We would estimate the added value studies listed above at $600k

Recommendation:

Millennial is looking for GM to increase spend by 300% YoY for a buying avenue (managed service) that will continue to lose market share over the next couple years. Although we value Millennial as a current partner in the US this is a lot of money to invest with one vendor in a very crowded space. Historically, other regions haven’t purchased Millennial so adding a $4.2MM commitment might take away from their preferred mobile partners.

Additionally a good portion of the benefits listed i.e. lower spend, insights, metrics and dashboads can already be garnered through Carat’s Trading Desk. AMNet can actually purchase off Millennial’s DSP and others at a 30-40% rate reduction without a spend commitment. Although the added value studies ($600k) are enticing they would not justify a spend increase of $12MM.

At this point we would not recommend this program with Millennial for the reasons listed above. If there is an appetite for a global programmatic mobile solution we would recommend testing a couple different DSPs including Millennial via AMNet at a lower scale. This would allow for optimal learning aptitude for each region.