24 Feb 2016

PROGRAMMATIC IN BRIEF

"All advertising should…connect an individual person's needs to a business that can offer that individual value."

David Ogilvy

‘programmatic’ as defined

for robots

Programmatic Advertising is machine-to-machine

automation of advertising/media transactions. This

typically involves machine-learning decisioning and

both biddable and non-biddable inventory, but currently

relies on human input to create rules for both the buy

and sell side.

Some examples of programmatic:

Ad Networks

Search

Real Time Bidding

Automated Guaranteed

‘Programmatic’ defined

for people like us

Forget the phrase “Programmatic“ - it’s terrible.

It’s actually about targeted and personalised

advertising.

It’s about reaching an audience and individual

consumers, not the publisher/media channel

It’s about serving relevant advertising to the right

person at the right time.

It about reducing wasted advertising spend

PROGRAMMATIC FLIPPING THE MARKET

100%

80%

60%

40%

20%

0% 2011 2017 2012 2013

Programmatic

2014 2015 2016

Non- Programmatic

11

In 2015, the spending scale tipped towards

programmatic:

55% of all

US digital display

ads were bought

programmatically

in 2015, worth

$14.88 billion

why is RTB growing so fast? From past to present

Buyers

Sellers

Past Present

Execution Transparency

Cheap Media

High liquidity

High ROI on Direct Response

Scale

Data Collection

Transparency & ROI

Access to premium inventory

Contextual Relevance

Operational + Media efficiencies

Flexibility in planning

1st party data access

Yield Management

Revenue for unsold media

Sales Channel Conflict

Transparency

Premium Environments

Control

Scale

Operational Efficiency

Higher Yield

1st Party Data Usage

the programmatic evolution Ad Networks ad networks aggregated

inventory and sold it to

advertisers. helped

publishers by selling

inventory they could not

sell themselves.

Ad Exchanges

& SSPs real-time

marketplaces with a

large pools of liquid

inventory not sold in

direct buys; SSP’s

have more controls

for publishers to

optimize yield

DSPs Bidding technology

designed to help

advertisers/agencies

target and optimize

their buys across

multiple ad

exchanges/publisher

inventory pools

Reservation

Buying ads sold via direct

transactions between

advertisers/agencies

and publishers

1990s

Private

Exchanges &

Automated

Guaranteed Exclusive advertiser-to-

publisher inventory

relationships for

programmatic

purchasing in brand

safe environments

Programmatic

Premium

Direct Sold/

Guaranteed/

Reserved

Indirect/

Programmatic/

Unreserved

Now

terminology: the painful stuff

RTB Real Time Bidding –the technology that allows the selling and buying of inventory one impression at a time.

Ad Exchange Transparent real-time marketplace where large pools of inventory are bought and sold.

Agency Trading Desk

Holding company-created division to execute audience buying strategies, both direct and programmatic.

DSP Demand Side Platform - Technology company that powers RTB buying for advertisers and agencies. Leverages

Demand Side Decisioning.

SSP Supply Side Platform - Technology platform that powers RTB selling for publishers. Aka a ‘publisher biased exchange.

PMP Strategy to create a premium sales channel using RTB to execute direct buys, aka Private Exchange.

DMP Data Management Platform - 1st party and 3rd party

Automated Guaranteed

Workflow automation and execution channel for direct sold reserved inventory.

Bid Request/ Bid Response

Action in auction where SSP solicits all requests for bids, and DSPs respond with bids.

MARKETPLACE

actors & acronyms What role each plays in the ecosystem

AD

VE

RT

ISE

R /

AG

EN

CY

P

UB

LIS

HE

R

DSP

AD

VE

RT

ISE

R A

D S

ER

VE

R

SSP

AGENCY TRADING DESK

DMP

PU

BL

ISH

ER

AD

SE

RV

ER

SERVICES

DMP

Google confidential

Powerful segmentation

Gain insights and optimize

Understand and reach your audience

Google confidential

Segment your audience for powerful targeting

Interested in baby shoes

Interested in fashion shoes

Sh

Interested in sneakers

Rule Builder

Create powerful audience segments based on Customers’ online behaviour

Signal/data source Dynamic ad template Personalized ads

Dynamic creative Targeted Messages Segment your audience for powerful targeting and send the right message to the right audience at the right time

Interested in fashion shoes

Interested in Hogan sneakers

Interested in baby shoes

90+% reach of

typical cookie lists

across exchanges,

Gfooorgmle caontfsid,enatianl d geos

All your display channels in one place: desktop, mobile, video, tablet

Reach more of your audience

+140B Impressions available globally

Google confidential

impressions seen monthly in ZA

Reach more of your audience 10 billion

the agency reclaims budget control

Programmatic Budgets climb as % of total Digital Spend

> Half of Senior Ad Buyers allocate between 31-60% of digital budget

to programmatic > By 2016, programmatic will be 65% of US Digital Spend

Programmatic Budgets determined at Agency Level

> Agencies have reclaimed control of programmatic budgets

> Agency Trading Desk Model is challenged i.e. Vivaki

> Agencies have created programmatic teams in-house

As Agencies drive budget, demand increases for innovative

products

> Viewability

> Rising Stars

> Guaranteed buys (thru AG or PMP G)

how does a publisher manage its business?

Transaction Automation

Programmatic

World

> Price

> Delivery

> Sell thru (STR)

> Revenue

> Yield

> Fill

> Transparency

> Data Leakage & Protection

> Viewability

> Discoverability

Before

Programmatic

> Price (CPM)

> Delivery

> Sell thru (STR)

> Revenue

Within

programmatic,

there are two

main

subcategories:

RTB and

programmatic

direct

> High CPM and yield

> Direct Demand

> Non Standard

> High Volume

> Guaranteed Delivery

> Prioritized remnant

> Repackaged media

> Undifferentiated media

> Demand-Supply

imbalance

prioritization in the ad server a.k.a. “The Waterfall”

PREMIUM

DIRECT

STANDARD

DIRECT

PREMIUM

PROGRAMMATIC

OPEN

PROGRAMATIC

> Sponsorship

> Custom Executions

> Context Targeting

> Audience Targeting

> ROS & RON

> PMP

> SSP

> Ad Nets

Typical Publisher

Automated Guaranteed

Private Marketplace

Open Market

Direct bought guaranteed inventory access, non-RTB

Direct bought RTB based inventory access

RTB based inventory access in open marketplace

Predictable and scalable high value placements

Controlled buying with price agreements for bids

Efficient and targeted audience buying

channels definition value

Pro

gra

mm

atic D

irect

layers of programmatic Premium at scale, across all buying channels

PREMIUM

DIRECT

PREMIUM

PROGRAMMATIC

STANDARD

DIRECT

OPEN

PROGRAMATIC

> Sponsorship

> Audience Targeting

> Custom Executions

> PMP

> Targeted Media

> ROS

> RON

> SSP

> AdNets

prioritization in the ad server

PREMIUM

DIRECT

STANDARD

DIRECT

PREMIUM

PROGRAMMATIC

OPEN

PROGRAMATIC

> Sponsorship

> Custom Executions

> PMP

> SSP

> Ad Nets

a.k.a. “The Waterfall”

Typical Publisher Future

> Context Targeting

> Audience Targeting

> ROS & RON

Big Data

Marketers will look beyond publisher and third party

cookies to other data sources

CRM

Cross-device

Offline purchase

data

Marketers’ Key Challenge: Delivering the Right Message

to the Right Audience in a Fragmented Environment

Create a Complete, Unified Customer Profile

Deliver a Consistent Message Across Channels

Throughout all Stages of the Customer Lifecycle

Multiple Data Sources Multiple Channels Multiple Lifecycle Stages

Mar alified

O ity

Cu mer

Su

pp

ort/S

erv

ice &

Ren

ew

Up

/Cro

ss-s

ell

Data

Purchase Own

Maintain

Expand Research

Evaluation

Data-Driven Modern, Personalized Marketing

Requires Data to Inform Decisions for all Channels and Stages

Interest

Data

Email Mobile Web Social Direct Display Ads Search Mail

• Enables precise and efficient

personalization that scales

across channels

• Orchestrates unique

messaging, regardless of

customer lifecycle stage

• Transforms multi-sourced

primary and secondary data

into actionable information

• Provides rich data on target

audience and customers as

they progress through funnel,

convert, and reactivate

Industry Leading Data Management Platform • Allows marketers to manage 1st party data, supplement with 3rd party data, and create private use 2nd party actions

• DMP allows marketers to work with multiple execution partners and across channels, including web, mobile, email,

offline and social

• One of the most scalable marketing DMPs with 200 billion activities generating more than 7.5 trillion outputs per month

• 3 of the Top U.S. Wireless Telcos

• 3 of the Top U.S. Retailers

• 3 of the Top U.S. Banks

• 3 of the Top Global Travel Brands

• 3 of the Top Technology Providers

…All Rely on DMPs to

Maximize their Marketing Spend

• Access to the largest aggregation of

licensed 3rd party data providers

available anywhere

• Provides customers more than

30,000 data attributes including

intent, B2B, past purchases,

geo/demo, interest/lifestyle, branded

and qualified demographics

• Over 700 million global profiles

• More than 200 data providers

• 200+ customers across multiple

industries

Audience Data Marketplace for Digital Marketers

Tracking Trends for 2016

Combined, US programmatic direct and private

marketplace spend accounts for:

43% of US

programmatic

digital display

ad spending in

2015

A projected

58% in 2016

2. Longstanding concerns about inventory

quality will finally be addressed

3. Interest and talk around programmatic TV will

far outweigh investment

Programmatic is more apt to come to TV in

stages vs. widespread adoption

Addressable TV

Linear TV

– Spot & scattered

– Upfront & national:

Data-driven

– Upfront & national:

True automation

4. Where programmatic will make gains is with

connected TV and over-the-top (OTT) video

“ This year, we’ll see real

auctions running inside of many of

the apps that sit inside your Roku,

your Amazon Fire or your Apple TV.”

—Jeff Green, CEO of The Trade Desk

5. As other devices and screens enter the mix,

expect programmatic to play a significant role

© 2015 eMarketer Inc.

Key Takeaways:

Programmatic has tipped the scale on digital display ad

spend this year

Mobile was and will be a driving force

Programmatic direct and private marketplaces will draw

new ad dollars and from RTB and open market places

Improvements to ad quality will become mandatory

2nd

and 3rd

party Data will continue to prove critical

Programmatic buying is coming to TV and wearables,

but 2016 won’t be the breakthrough year