Starving at the feastWhy big media is struggling to be part of the advertising

boom

Media industry is brand new

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spaper

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Prin

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books

radio

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More media is being produced, for cheaper, than ever before

More money is being spent on advertising than ever before

Technological change creates media growth across all mediumsMore demand for advertising from new products

and services

Unless technlogy is a replacement for old technologiesPrinting press versus scribesCD vs tapeDVD vs CD

Economies of scaleBig media businesses are formed

NewscorpDisneyTime Warneretc

Control access to media Restrict access to competitors

Control legislated channels (airwaves)Create scales of economy that thwart new

entrants (printing presses, distribution, shelf space)

Distribution = market power

Imperfect information for advertisers

Measurement models drive behaviorCirculation vs readershipBundling of content vs actual readsBulking up advertising per user (actual share of

voice is not on the page)

Creates and grows from market inefficiences

Imperfect information for audience

Hard for new media options/competitors to launchCost to launch (advertising on existing media)Access to airwaves or shelfspace

Audience options are limited due to lack of knowledge of alternatives

Scarcity drive profitsLimited choice enables greater audience on a

platform

Requires lowest common denominator content vs highest quality contentCheaper to produce content

More audience and limited ad breaks equals more profits

Welcome the internet

Distribution From control to anarchy.Imperfect information From lack of data to in-depth data.Scarcity From limited ad space an audience

to unlimited adspace and audience.

From limited content to unlimited content.

DistributionInternet erodes government power to create

monopolies

Reduces switching cost between media to zero

Allows anyone to be a media company

Glut of choice becomes the challenge (disovery) vs scarcity

scarcityAudience utilises multiple media platforms per

day due to low switching costs

Harder to sell audience specifically as can be reached on other mediums (high substitution)

Near perfect informationAdvertising was sold

on wastage

Targeting and event based advertising (CPM, CPC, etc) reduce cost of advertising reachOnly pay for actual

benefit receivedAdvertising spend (in

theory) more effective

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Choice requires better content

Better = more relevant for you right now

Butterfly enthusiast can publish blog in butterflies

Other butterfly lovers love the content but not relevant to most

Butterfly lovers also buy BMWs – so BMW can advertise there too OR employ CPC OR employ affiliates

Reach vs RelevanceGoogle model based on relevance of ad based

on what user is looking for

Relevance is better indicator of success than reach

CPC is best indicator of relevance

Throwing away the rate card

Google give advertising away for free!Other media charge you to show your brandGoogle only charges you if user clicks on your

advert (CPC)

There is no google rate cardAuction basedKeywords can be over R100 per click (and still

more effective than traditional media)

Law of large numbers ensures google make a LOT of money

TargetingUser tracking is now consistent

Cookies Sessions Etc

You can use data to target Demographic Behavioral

Targeting audience can happen on any site and across sites Retargeting

Targeting makes ads more effective

Ad Networks and low cost of sales

Cost of sales is dropping to zero

Makes it easier to buy and sell advertising

No more “unsold” mediaRevenue maximization versus yield management

Behavioural Targeting

Data optimization

(Bizo, Quantcast, adchemy)

Data Exchanges(Bluekai, eXelate, Rapleaf)

Google AdX

AdWords (+

access to GCN)

AdSenseWorkflow

(DSM, freewheel does as well)

Video serving with

DRM, etc(eg Instream,

Freewheel

DNB,Adify, etc)

Video playersFreewheel, Brightcove

Ad Planners (eg Google Ad Planner,

Comscore, Akamai)

Analytics(Omniture, GA, etc)

Adsense Backfill

Direct Sales

Billing systems (eg

SAP)

External “Sales House”

Advertiser

Agency/ Ad Network / Affiliate Network

Buyers Sellers

Publisher Website

SSP: Seller Optimizing(Rubicon, Admeld,

Pubmatic)

Adservers DFP / other

Media Buyers(vivaki, Atom,

cadreon)

Dart Search

MSN

Deal

DealDFA /other

Buyer info

Seller info

eCPM(optimiz

e)Adapt

(optimize)

CRM (eg

Salesforce)

Data suppliers and consolidators (eBay, Expedia) (Business Objects, SAS, Claritas)

Planning tools (Aprimo, Unica)

Mobile Ad serving

Creative Optimization

(Teracent, Adready)

Demand Side

Platforms(DataXu,

Turn, InviteMedia

)

Verification Attribution

(DoubleVerify, mPire)

Other Ad Exchanges

AdECNRighMedia

OpenXAdvertising

.com

Ad NetworksVertical, Horizontal,

targeted , performanceGoogle CN

Implementation, migration & Integration Marketer Services Exchange Brokering

Private Network

Email

DATAKey next battlefront for media owners

War may be lost before its even begunGoogleMicrosoft

Opportunity to match targeted audience to premium advertiser and command superior yield per ad spotCPC?CPM