RTB: The Global Tool, The Local Solution - Internet...

Internet Advertising Conference – April 25, 2013

RTB: The Global Tool, The Local Solution

Farzad Khorsandjamal, Commercial Director, EMEA

Ad Tech: A Confusing, Fragmented Space

Denotes acquired company Denotes shuttered company © Luma Partners LLC 2013

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Clarity in the Ad Tech Landscape

Premium

$5–$100

$2-$5

Publishers Advertisers

Ad exchanges

Supply side

ad server

Data

exchanges

SSP DCO

DSP

Trading

desks

Demand side

ad server

Agencies

Measurement

/ analytics

<$2

M I D Open

AdStream

Data

suppliers

2 Indirect

1 Direct

Ad

verification

L

O

N

G

T

A

I

L

[DFP]

[DFA]

Ad networks

Targeting

2000-2003 2005 2006 2007 2008 2009-2013

Early days

Video

AdServers

Ad Networks

Ad Operations

Digital Agencies

Analytics

Ad Exchanges

Vertical Ad Networks

Publisher Tools

Yield Optimizers

Creative Optimization

Data Ecosystem

DMP

DSP/SSP

Trading Desks

RTB

Video

Mobile

OpenX Recent News

• 265 employees

• Global offices: in Los Angeles (HQ),

New York, London, and Tokyo

• Major infrastructure investment

(eg. disaster recovery)

Partners

2012 Key Metrics

• 3 Trillion total ad transactions

• 250+ Billion monthly ad transactions

• 12+ Billion daily bids (buyers)

• $150M+ revenue

• Profitable

Purchase Investor Accolades

External Perspective 2 (Luma Partners)

OpenX well positioned for the Coming Convergence

How Programmatic Currently Works

Display Used To Be Sold Very Differently

Guaranteed

Non-Guaranteed Guaranteed

Non-Guaranteed

How Do Publishers Sell? As Predictably

20% of the inventory… …drives 80% of the revenue

Programmatic Can Solve Publisher Pain Points

6%

25%

36%

52%

59%

60%

68%

None of the above

Ad quality review

Price Negotiation

Trafficking

Optimization

Billing/Reconciliation

Insertion order workflow

What elements of the traditional direct sales process do you think can be

replaced programmatically?

Q:

Does Programmatic Benefit Publishers and Buyers Equally?

25%

30%

45%

Yes

Don't know

No

Publishers

38%

44%

18%

Yes

Don't know

No

Buyers

In its current state, does programmatic selling benefit buyers and sellers equally?

If no, who benefits more and why?

Q:

Does Programmatic Benefit Both Sides Equally?

If not (benefit equally), why not?

• “Benefits buyers more, because it allows them to use their 1st-party data to

identify valuable audience and buy it cheaply -- because the seller does not

know the value.”

• “It benefits buyers. Not because it can't benefit sellers, but because sellers just

haven't figured out how to use it to their benefit yet…”

• “The sell side still doesn't have the insight, controls and automation to really

optimize yield and manage an integrated direct/indirect strategy.”

Majority of Publishers Saw Revenue Increase, Will Trade Even More in the Year Ahead

Q:

Revenue: 12 Month Period

37%

No Change

55%

Up by 21%

8% Down by 19%

Inventory: The Year Ahead

21%

Will fall 19%

58%

Will rise 25%

21%

No Change

How has programmatic selling affected your total

revenue in the last 12 months vs. the year previous?

Q: Given your experience with programmatic selling, how much

more or less of your digital ad inventory do you anticipate will be

sold programmatically in the coming year…?

The advantage for the Czech Republic market:

Programmatic Premium

Online Advertising Performance

Programmatic Premium: What is it?

Programmatic Will

Become Race to the Top

If It’s Not Programmatic

Premium, Then What Is It?

The Evolution of

‘Programmatic Buying Into

‘Programmatic Premium’

Programmatic Premium

Isn’t Just About

Efficiency

Programmatic

Premium Is Not About

Bidding

Paths to Programmatic

Premium, Part 1: The

Meadow Beyond RTB

Premium Pushing The

Case For Programmatic

Buying

Why 2013 Will Be the

Year of Programmatic

Premium Guaranteed

OpenX Defines “Programmatic Premium”

Direct relationships between buyers and sellers facilitated through

programmatic (automated) means. The two programmatic elements

are:

• Automated discovery, negotiation and workflow

• Agreed-upon rules ensure brand safe environments through

ad verification partner govern the inventory that’s purchased

‘Premium’ is in the eye of the beholder.

To Contribute More Premium Inventory, Publishers Want

Control Over Pricing, Relationships

4%

47%

47%

54%

54%

66%

67%

75%

None of the Above

Maintain Data Security

White List Buyers

Predictable Volume/Revenue Guarantees

Set Different Terms For Buyers

Control Ad Quality/Brand Safety

Maintain Direct Relationships

Control CPM/Pricing

What would lead you to sell more premium inventory programmatically? Q:

Buyers Want More Data and New Inventory

29%

39%

57%

67%

68%

More Easily Negotiate Direct Buys

Maintain or Expand Direct Buying Relationships

Preferred Access to Inventory ("First Look")

Exposure to Inventory Not Currently Available

More Data to Inform Bids

What would lead you to buy more premium inventory programmatically? Q:

What do you need

to execute programmatically?

Programmatic Requires the Right Platform

19%

81%

No

Yes

Does your ad server integrate

exchange capabilities?

5%

33%

62%

Less likely

No impact

More likely

If yes, are you more or less likely to

engage in programmatic selling?

29%

35%

35%

Not at all likely

Somewhat likely

Highly likely

If no, will you convert within

the next 12 months?

Do you use an ad server…that has exchange capabilities integrated into the platform?

If you answered “yes” are you more or less likely to engage…? If you answered “no”

how likely are you to convert to an ad sever that accommodates programmatic…?

Q:

How does OpenX address this?

The First Integrated Online Ad Platform

The OpenX Mission

Maximize ad revenue for digital media companies on any connected screen

OpenX products are available a la carte

or as a fully integrated solution

Farzad Khorsandjamal farzad.khorsandjamal@openx.com

www.openx.com/whitepaper-programmatic-premium