Audience Extension Survey 2014

Presented by Audience Accelerator and Digiday

T H E VA LU E O F

DIGITA L PUBL I S HER S ’AUDI E N C ES

Q3 201 4

2THE VALUE OF DIGITAL PUBLISHERS’ AUDIENCES Q3 2014

ABOUT DIGIDAYDigiday is a media company and community for professionals who work in the

digital media, marketing, and advertising industry. Our mission is to connect

the industry with insightful analysis and perspective, as well as each other.

We provide key insights and information through our online publications and

conferences that cover the changes and trends—and we communicate why they

matter. The focus is on quality, not quantity, and honesty instead of spin. Digiday

is driven to produce the highest quality publications, conferences, and resources

for our industry.

ABOUT AUDIENCE ACCELERATORRocket Fuel’s Audience Accelerator business unit provides an unparalleled full-

service audience-extension platform, exclusively servicing websites, networks, and

data companies. We help our partners leverage their data to effortlessly scale their

audiences with outstanding results. Powered by our proven artificial intelligence

(AI) technology, we enable our partners to model their unique audiences and

extend reach to up to 99% of the online universe in the United States. Audience

Accelerator’s full-service team handles set up, training, and execution. We provide

access to industry experts; RFP responses; and detailed, actionable campaign

analysis—saving technology, staff, and infrastructure investment.

Rocket Fuel delivers a leading programmatic media-buying platform at Big Data scale

that harnesses the power of AI to improve marketing ROI in digital media across

web, mobile, video, and social channels. Rocket Fuel powers digital advertising and

marketing programs globally for customers in North America, Europe, and APAC.

Rocket Fuel currently operates in more than 20 offices worldwide and trades on the

NASDAQ Global Select Market under the ticker symbol “FUEL.”

3Presented by Audience Accelerator and Digiday

INTR ODU C TI ONWhen we first conducted research on Audience Extension with Digiday in

our 2013 Audience Extension Industry Overview, our goal was to gauge the

marketplace and identify how publishers and advertisers were responding to

advancements in audience targeting through Big Data and programmatic buying

in a rapidly changing marketplace. One year later, our goal is to identify changes

in the marketplace and shifts in messaging and attitudes around extension.

As with last year’s survey, to understand these shifts Audience Accelerator

partnered with Digiday to survey its readers and key professionals on the

publisher and buyer sides about their attitudes and strategies around audience

extension. The insights in this survey will highlight those shifts over the past

year and forecast future shifts.


TOPLINE• More than ever, publishers are looking to audience-extension solutions

to increase their revenue through greater reach.

More than half of publishers (52%) are offering audience extension to

their advertising partners, a slight increase from last year’s survey. Those

publishers who do offer extension solutions are leveraging them often,

however, with one third (33%) offering them on either “most” or “all” of their

campaign proposals to advertisers. This is a 31% increase (8.6 percentage

points) from one year ago.

• Publishers are more sophisticated than they were a year ago, with a

greater understanding of the benefits of audience extension.

More than two-thirds (77%) of publishers now say they are “very familiar”

with audience extension, underlining a significant shift from a year ago

overall (+23% increase in familiarity).

• Publishers looking to the future want better reporting tools and more

transparency from audience-extension platforms.

A direct consequence of greater levels of familiarity and sophistication is a

greater understanding of the benefits a publisher can receive from audience

extension. Publishers are seeing more benefits overall, primarily when it

comes to meeting goals for clients—two-thirds of publishers (67%) say that

audience extension has allowed them to meet client goals that would have

otherwise not been met, nearly double the number from one year ago.

P U B L I S H E R S


More than ever, publishers are looking to audience-extension solutions to increase their revenue through greater reach.

0%

10%

20%

30%

40%

50%

60%

70%

2014 actually2015 planned

20132014 planned

0% 0%

8% 7%

0%

64%

39%

21%

12%

48%

NEVER RARELYmaybe once

or twice

SOMETIMES it depends on the campaign

OFTEN on most

campaigns

ALWAYS

Q. HOW OFTEN DO YOU INCLUDE/PLAN TO INCLUDE AUDIENCE EXTENSION ON CAMPAIGN PROPOSALS?

More than half of publishers (52%) are now offering audience

extension to their advertising partners, a slight increase from

last year’s survey. Those publishers who do offer extension

solutions are leveraging them often, however, with one

third (33%) offering them on either “most” or “all” of their

campaign proposals to advertisers. This is a 31% increase

from one year ago. Although the majority of publishers

offering extension are still offering it on a case-by-case basis

(58%), that percentage declined from one year ago (64%), in-

line with the projections provided by publishers when asked

to estimate how often they planned to include extension

over the next 12 months. Similarly, publishers predict a

continuing increase in extension use, with more than half

(61%) planning to include extension on either “most” or “all”

of their campaign proposals. Comparatively, this is a much

larger planned shift than last year’s results showed.

One of the key drivers for this shift is the need to create

additional reach or impressions to satisfy advertiser demand

when responding to RFPs—nearly three-fourths publishers

offering extension (73%) say that they include extension on

a proposal when they need additional reach or impressions

to deliver a campaign. This is a jump of more than 55%

from a year ago (47%). Similarly, publishers have become

more aware of how extension can help address campaign

objectives or reach channels that were previously beyond the

publisher’s reach. Publishers have also become more adept at

creating unique products to roll out to advertiser clients, with

two-fifths (39%) having done so. This is a 31% increase from

last year.


Q. HOW DO YOU CURRENTLY INCLUDE AUDIENCE EXTENSION ON CAMPAIGN PROPOSALS? (PLEASE SELECT ALL THAT APPLY)

At this point, the majority of publishers offering extension

have been doing so for at least one year (77%). Compared to

a year ago, the methods have changed: Publishers are relying

less on third-party ad networks and seats on ad exchanges

and instead choosing to rely more and more on data-

management platforms (DMPs) for extension solutions, with

nearly half of publishers leveraging either a DMP (45%) or a

digital-service provider (DSP) (41%) for audience extension.

Publishers are more sophisticated than they were a year ago, with a greater understanding of the benefits of extension.

More than two-thirds (77%) of publishers now say they

are “very familiar” with audience extension, underlining

a significant shift from a year ago overall (+23%

increase in familiarity).

Publishers have a greater understanding of the benefits of audience extension than they did a year ago.

A direct consequence of greater levels of familiarity and

sophistication is a greater understanding of the benefits a

publisher can receive from audience extension. Publishers

are seeing more benefits overall, primarily when it comes

to meeting goals for clients—two-thirds of publishers (67%)

say that audience extension has allowed them to meet

client goals that would have otherwise not been met, nearly

double the number of one year ago. Similarly, more and more

publishers are leveraging audience extension to win more

money on proposals (55%) or take business that they would

have otherwise had to turn down (42%). This underlines

the importance of using audience extension to generate

additional reach, particularly across new platforms.

20142013

73%

47%

42%

50%

39%

30%

30%

23%

9%

6%

58%

50%

Other

We include it when an RFP asks for channelsthat we don’t have (e.g. mobile, video, social)

We created a unique product androlled it out to our top advertisers

We include it when an RFP asks fordata-driven, audience-based buys

We include it when it addresses an objectivespecifically asked for in an RFP

We include it when we need additional reachor impressions to deliver a campaign


Q. IS THERE A SHIFT IN TYPE OF PLATFORM USED THIS YEARS VS LAST YEAR?

Third-party ad network

Integration with my ad server

In-house network

Data management platform (DMP)

Demand side platform (DSP)

Seat on an ad exchange

Supply side platform (SSP)20142013

0% 10% 20% 30% 40% 50% 60%

Somewhat familiarVery Familiar

Not at all familiar

77%

17%

6%

Q. HOW FAMILIAR ARE YOU WITH THE CONCEPT OF AUDIENCE EXTENSION?

SPECIFICALLY, THE PRACTICE WHERE ADVERTISERS CAN PURCHASE AD INVENTORY THAT IS TARGETED TO A PARTICULAR PUBLISHER’S PREMIUM SITE AUDIENCE ELSEWHERE ON THE INTERNET.


Other

We’ve been able to keep businessthat we’d have otherwise lost

Offering audience extension hashad no effect on our revenue

We’ve been able to win new business

We’ve been able to take business thatwe’d have otherwise turned down

We’ve been able to win moremoney on proposals

We’ve been able to meet goals for customersthat we’d have otherwise not met 66.7%

54.9%

42.4%

42.4%

36.4%

9.1%

3.0%

+31

+9

+12

+0.2

-1.4

+0.2

-1.4

2014

2013

Our CPMs for audience extension are:

Lower than on-site inventoryLess than half those of on-site inventory

Higher than on-site inventoryAbout the same as on-site inventory3

3.3

%

5.6% 25.6

% 35.6

%

35.6%

9.09% 9.09 % 18.18%

6

3.64 %

Q. HOW HAS OFFERING AUDIENCE EXTENSION AFFECTED YOUR REVENUE? (PLEASE SELECT ALL THAT APPLY)

Q. COMPARED WITH YOUR ON-SITE INVENTORY, ARE YOUR AVERAGE CPMS FOR AUDIENCE EXTENSION HIGHER OR LOWER?

2014

2013

Our CPMs for audience extension are:

Lower than on-site inventoryLess than half those of on-site inventory

Higher than on-site inventoryAbout the same as on-site inventory3

3.3

%

5.6% 25.6

% 35.6

%

35.6%

9.09% 9.09 % 18.18%

6

3.64 %


When pricing audience extension, publishers have largely settled on a best

practice, choosing to price CPMs for audience extension lower than on-site

inventory (64%), or in-line with CPMs for on-site inventory (18%). Fewer than

10% price their audience extension CPMs above on-site inventory (9%), and the

same proportion price extension at less than half the price of on-site inventory.

This shows a dramatic shift from last year’s results as the market has increased in

sophistication: Only one-third of publishers were pricing extension at a lower CPM

than on-site inventory, while an even proportion were charging the same price, and

one-quarter were charging higher CPMs for extension.

As a result, publishers ultimately realize significantly higher revenue totals from

audience extension, even if audience extension does not necessarily constitute

an increasingly larger proportion of that revenue. Publishers say that extension

currently accounts for between 1 and 10% of ad revenue (79%), with 15% saying

extension accounts for 11-20%. Over the next year, publishers expect these

numbers to increase, with one-third (36%) of publishers saying that they

expect extension to account for between 11 and 20% of ad revenue over the

next 12 months.

Publishers looking to the future want better reporting tools and more transparency from audience extension platforms.

When asked what developments they’d like to see in the audience-extension

category in the next year, publishers’ primary concerns were around better tools

in their existing platforms, to provide 1) better reporting, 2) clearer inventory

forecasting, or 3) audience-overlap estimates. Transparency is also a hot topic

among publishers, who want greater insight into their platforms—how they’re

operating, and where ads are being served—and would like to have access to better

inventory (such as through private exchanges) when offering extension. Publishers

are also frustrated with the lack of adoption for extension in the industry, as well

as the number of options—in addition to better education in the space, many would

prefer to have a one-stop-shop-style solution for extension, data management, and

data protection rather than having to work with several vendors.


Choosing an extension platform is still a lengthy process, with many stakeholders to consult.

The process of choosing an extension platform is not

a short one—publishers commonly say it takes their

organization between three and four months to choose an

extension platform (45%), though for 24% it can take even

longer. This is partly due to the number of departments

and individuals that typically weigh in on the process: 60%

of publishers listed more than one key decision-maker in

the process of choosing an extension platform, and one

quarter (24%) listed three or more key decision-makers for

choosing an extension platform. It is also due to the number

of platforms publishers are evaluating before picking a

solution: 42% evaluate three partners, and 27% go as far

as to evaluate four to six partners before choosing one.

When it comes to making the decision on an extension

platform, little has changed in the past year: The ability

to choose from site lists or purchase brand-safe inventory

when delivering extension is still the most important

factor (91% rate it either “very important” or “somewhat

important,” for an average score of 3.57 out of 89%), followed

by the ability to reach consumers on other platforms (e.g.

mobile, video, etc.) and the ability to retarget.

DMPs

There are a number of DMPs on the market, and customers

have their choice of providers. According to our respondents,

most DMP providers saw an increase in the percentage of

respondents using DMPs, with Acxiom, Krux, and Adobe

Audience Management all having double-digit percentage

increases. While fewer respondents indicated having a DMP

in place this year as compared to than last year, the actual

difference was rather small (14% fewer respondents), and is

not likely to reflect an overall trend.

When choosing a data-management platform, the two

most important features for consideration are the ability to

build and target customer segments (95%) and access to

customer insights (93%). Principally, these results reflect

the primary concern of having the ability to drive results

to find out about and locate new customers on the horizon.

DMPs not addressing these issues risk potentially losing the

interest of prospective clients.

Data security was also a major topic of interest (93%) and

rated third on the list of “must-haves” for a DMP. In light of

the recent large-scale hacks on Home Depot, Target, and

PlayStation Network, respondents appear to be expressing

concern about the security of their information in an

increasingly digital world.

Publishers’ Strategic Changes

As a result of the advent and proliferation of programmatic

buying, publishers have had to adjust strategy, largely

choosing to adopt an “if you can’t beat them, join them”

strategy: 65% of publishers polled have put some or all

of their inventory on exchanges, and nearly half (45%)

are participating in or creating private exchanges. Many

attempt to differentiate their media or offerings by

either creating unique ad formats/units (46%) or focusing

on custom sponsorships and programs (46%). Only 18%

of publishers have not made any adjustments to their

business as a result of programmatic buying.


20142013

65.38%

43.8%

46.15%

39.6%

44.87%

22.9%

17.95%

20.8%

6.4%

8.3%

46.15%

35.4%

We have reduced or eliminatedour media sales team

We have not made anyadjustments to our business

We have created or are participating in a premium private exchange

We have focused on sellingsponsorships and custom programs

We have created unique ad units/formats that are not available on ad exchanges

We have put some or all of ourinventory on ad exchanges

Q. HOW HAS THE ADVENT OF PROGRAMMATIC BUYING AFFECTED YOUR BUSINESS? (PLEASE SELECT ALL THAT APPLY)

A D V E R T I S E R S


TOPLINE• Advertiser adopters of audience extension view the offering and its

benefits favorably.

Half of advertisers are at least “somewhat familiar” with audience extension

and its uses, and just under a third (29%) are currently working with a

partner providing audience extension on one or more of their campaigns.

• Viewability, performance, and access are important for advertising buyers.

For advertisers, brand safety, performance, and cross-platform opportunities

are the most important factors for when evaluating publisher proposals that

include audience extension. However, bundled access to preferred ad units

or native advertising was significantly more important this year—advertisers

are 58% more likely to rate bundled access to these ad units as either “very

important” or “somewhat important” this year (as opposed to last year)

when evaluating an extension proposal.

• Advertisers see extension as a way to make their budgets go farther.

Advertisers primarily see audience extension as a way to get more out of

their buys on premium content sites for branding campaigns (73%), and see

the benefits to these campaigns as the ability to access a unique audience

(55%), while staying within brand-safe content.


Advertiser adopters of audience extension view the offering and its benefits favorably.

Half of advertisers are at least “somewhat familiar” with

audience extension and its uses, and just under a third (29%)

are currently working with a partner providing audience

extension on one or more of their campaigns. Overall,

advertisers don’t seem to have a strong opinion on audience

extension yet, with most (58%) viewing it neither favorably

nor unfavorably, and none viewing it either very favorably or

very unfavorably. Overall, advertisers tend to rate their prior

experience with publishers offering extension either “Good”

or “Fair,” as opposed to “Excellent” or “Poor.”

For many advertisers, access to extension makes them

more likely to spend more with a publisher, with 50%

of advertisers saying that they are likely to spend more

with publishers who offer audience extension—a slight

increase from results one year ago. Conversely, only

8% of advertisers say they are likely to spend less with

publishers offering extension. As with last year’s results,

advertisers are more likely to include extension as part

of a campaign (39%) than not (10%).

Viewability, performance, and access are important for advertising buyers.

For advertisers, brand safety, performance, and cross-

platform opportunities are the most important factors

for when evaluating publisher proposals that include

audience extension. However, bundled access to

preferred ad units or native advertising was significantly

more important this year—advertisers are 58% more

likely to rate bundled access to these ad units as

either “very important” or “somewhat important” this

year (as opposed to last year) when evaluating an

extension proposal.

Advertisers see extension as a way to make their budget go farther.

Advertisers primarily see audience extension as a way to

get more out of their buys on premium-content sites for

branding campaigns (73%), and see the benefits to these

campaigns as the ability to access a unique audience

(55%), while staying within brand-safe content (55%).

Ultimately, the appeal for advertisers is in the ability to

access additional premium-content sites (59%), and to

do so with more options (41%). Many advertisers also

appreciate the ability to diversify their spend or audience

through extension (48%) or to do more custom targeting

against their audience on premium sites (44%). For these

advertisers, the value in audience extension reflects the

importance of brand-safe environments and finding new

customers within those channels. Publishers offering

extension should feel more comfortable approaching

advertisers with extension as a brand solution for reaching

premium audiences at scale and not just a way to meet DR

goals for a campaign.


Q. HOW FAVORABLY DO YOU VIEW AUDIENCE EXTENSION? No opinion

Very Favorably

Unfavorably35.48%

58.06%

6.45%

Changing strategies in 2015.

Heading into 2015, nearly half (38%) of advertisers predict that they’ll allocate a

higher percentage of their budget to publishers offering audience extension, while

the remaining 62% anticipate maintaining the same level of spend. Comparatively,

advertisers plan to spend more on programmatic across the board in the next year,

and most (60%) feel that programmatic buying saves them time. Few advertisers

feel that programmatic buying devalues premium content sites (28% “somewhat

agree”) and most feel that their programmatic campaigns perform better (64%).


METHODOLOGYA sample of 226 publishers, and agency and brand professionals—at the Director

level or higher—responded to this survey as part of the Digiday Executive

Forum. The survey was fielded between August 13th and September 5th, 2014.

Publishers involved in the Executive Forum range in audience size from less than

250,000 uniques per month to more than 50 million uniques per month.

EFFORTLESSLY SCALE YOUR AUDIENCE WITH SPECTACULAR RESULTS

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Audience Extension Survey 2014