Forrester Wave Sell-side Platforms Q112

Making Leaders Successful Every Day

January 3, 2011

The Forrester Wave™: Sell-Side Platforms, Q1 2012by Michael Greenefor Interactive Marketing Professionals

www.forrester.com

© 2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please email [email protected]. For additional reproduction and usage information, see Forrester’s Citation Policy located at www.forrester.com. Information is based on best available resources. Opinions re!ect judgment at the time and are subject to change.

For Interactive Marketing Professionals

EXECUTIVE SUMMARYIn Forrester’s 34-criteria evaluation of sell-side platform vendors, we found that AppNexus and Admeld led the pack because of their highly granular controls for publishers and proven ability to support a diverse array of sales opportunities. !ese leads, however, are far from insurmountable, and they face strong competition from other leading vendors — notably PubMatic and Rubicon Project — which are aggressively ramping up their development e"orts and turning once-distinguishing platform features into table stakes. Customize this Forrester Wave™ to determine which sell-side platform partner suits your needs best.

TABLE OF CONTENTSSell-Side Platforms: A Vital Part Of The Publisher Tech Stack

SSP Vendors Have Distinct Legacies

SSP Evaluation OverviewCurrent SSP O!erings Di!erentiate Across Four Key Areas

SSP Vendors Are Putting More Control Into The Hands Of PublishersVendor Pro!les

Leaders

Strong Performers

Contenders

Supplemental Material

NOTES & RESOURCESForrester conducted product evaluations in Q4 2011 and interviewed more than 20 vendor and user companies.

Related Research Documents“Making Sense Of The Digital Media Buying Platform Landscape”December 7, 2011

“The Future Of Digital Media Buying”September 21, 2011

January 3, 2011

The Forrester Wave™: Sell-Side Platforms, Q1 2012AppNexus and Admeld Lead, With Multiple Vendors Close Behindby Michael Greenewith Emily Riley, David Truog, Jennifer Wise, and James McDavid

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http://www.forrester.com/go?docid=61063&src=60384pdf



© 2011, Forrester Research, Inc. Reproduction ProhibitedJanuary 3, 2011

The Forrester Wave™: Sell-Side Platforms, Q1 2012 For Interactive Marketing Professionals

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SELL"SIDE PLATFORMS: A VITAL PART OF THE PUBLISHER TECH STACK

A#er years of limited investment in ad technology, digital publishers are now investing in tools for real-time bidding, audience targeting, and yield management to more e$ciently and e"ectively meet the needs of their advertisers. As we enter a new era for digital media buying, Forrester believes that the capabilities of sell-side platforms (SSPs) are an important component of this new suite of technologies.1 Why?

· Managing multiple indirect sales channels can be an operational nightmare. It’s unlikely that sales teams %ll 100% of their site’s inventory every month. To %ll the gap, indirect sales channels like ad networks have helped publishers squeeze extra revenues out of their inventory but put logistical strains on an ad operations team. SSPs help aggregate multiple indirect sales relationships and optimize revenue across them.

· Indirect sales come with the risk of cannibalizing direct sales e!orts. Adding several new sales channels creates opportunities for new revenues but leads to channel con&ict that limits control and pricing power. Publishers need tools to help them e"ectively balance channel con&ict risk with revenue opportunities.

· New buying methods require publishers to step up their technical capabilities. Media buyers are rapidly embracing programmatic buying methods such as real-time bidding (RTB) to purchase media both more e$ciently and more e"ectively. In order to take advantage of demand, publishers need tools that let them make inventory available to programmatic buyers.

SSP Vendors Have Distinct Legacies

SSPs began as tools to help publishers manage relationships with multiple ad networks. With the advent of new programmatic buying methods, however, the category has expanded in scope, now encompassing vendors with two distinct legacies:

· Classic SSP vendors. Rubicon Project, PubMatic, and Admeld began as tools to help publishers decrease the operational ine$ciencies that come with managing multiple ad network relationships. !ese vendors also helped publishers maximize revenue by connecting publishers to new ad networks and pitting these against each other in a de facto auction for publisher ad impressions. Today, these vendors are expanding beyond their legacies of ad network remediation into new programmatic buying methods.

· New SSP vendors. Programmatic exchange vendors such as Google’s DoubleClick Ad Exchange (ADX), Right Media, and AppNexus have developed publisher-facing interfaces that enable publishers to source demand from more dynamic buy-side sources such as RTB auctions and to set granular business rules for how the exchange auction allocates inventory to bidders.

© 2011, Forrester Research, Inc. Reproduction Prohibited January 3, 2011


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SSP EVALUATION OVERVIEW

On the basis of our past research, our assessment of what publishers need, and our interviews with vendors and clients, we developed a comprehensive set of 34 criteria to evaluate the vendors. !e criteria fall into three categories:

· Current o!ering. !is set of criteria judges the vendors’ current set of technology and service capabilities across %ve categories: the vendor’s auction model and platform, publisher protection tools, yield controls and optimization, implementation and technical performance, and user interface and reporting.

· Strategy. With this set of criteria, we assessed how well the vendor’s market vision, corporate strategy, and resources align with publishers’ needs.

· Market presence. Finally, we examined the vendors’ size and position in the market based on revenues and %nancial backing of the publisher client base as well as the number of employees across product, sales, and services.

Current SSP O#erings Di#erentiate Across Four Key Areas

Given the rapid pace of innovation among these vendors, many features that were novel di"erentiators just six months ago are now table stakes. Nonetheless, SSP vendors di"er across several critical publisher needs. Still, not all of these capabilities will be equally important to all, so we urge publishers to weigh the importance of these factors to their business model prior to selecting a partner (see Figure 1).

· Ad format acceptance. Ad format support varies widely among SSP vendors. Publishers looking to monetize only basic banner formats like static and &ash banners would be %ne with the limited ad format support of Right Media. On the other hand, publishers looking to manage not only banners but also rich media, video, and mobile through a single platform will have to turn to DoubleClick ADX.

· Yield optimization capabilities. Classic SSPs like Rubicon Project, Admeld, and PubMatic o"er proprietary optimization algorithms for helping publishers maximize revenue. !ese out-of-the-box solutions work well for most publishers. However, some publishers will prefer to manually manage yield optimization or use their own optimization technology that can better take into account publisher-speci%c factors like strength of individual advertiser relationships and seasonality of direct sales results. !ese publishers should turn to a highly &exible vendor like AppNexus.

· Breadth of ad and data management capabilities. SSPs are rapidly expanding their o"erings beyond core SSP capabilities into more parts of the publisher technology stack, such as audience



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data management and primary ad serving. Publishers should weigh the bene%ts of a simpli%ed technology stack against those of weaving together best-in-breed capabilities from disparate vendors.

· Services and support. SSP vendors o"er a wide array of services, from basic technical support to full-on strategic consulting services. While many publishers can bene%t from a broader range of services, these do not come without tradeo"s. First, more extensive support o#en costs more, whether in the form of increased revenue-sharing percentages or one-time costs. Additionally, some services — such as the facilitation of private exchange deals — may require coordination between your advertising clients and the vendor’s media relations teams, adding a layer of complexity to the client relationship.

Figure 1 Evaluated Vendors: Vendor Information And Selection Criteria

Source: Forrester Research, Inc.

Vendor

Admeld

AppNexus

DoubleClick Ad Exchange

PubMatic

Right Media

Rubicon Project

Number of clients

Approximately 500

Approximately 180

N/A

Several hundred

More than 300

More than 300

Product engineeringand support sta!

More than 60

More than 70

N/A

More than 200

More than 250

More than 100

Date evaluated

October 2011

October 2011

October 2011

October 2011

October 2011

October 2011

Vendor selection criteria

Vendor must o!er e!ective auction model and platform.

Vendor must o!er innovative solutions.

Vendor must have generated interest from Forrester clients.

SSP VENDORS ARE PUTTING MORE CONTROL INTO THE HANDS OF PUBLISHERS

Our evaluation uncovered a market in which SSP vendors are rapidly expanding the depth and breadth of controls they provide for publishers and pushing head %rst into RTB. !rough the use of our default weighting of criteria (based on our research into what matters most to large premium publishers), we found that:



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· AppNexus and Admeld lead the pack. AppNexus is a Leader because of its product’s deep &exibility and extensibility and its ambitious vision for how publishers will purchase and utilize ad technology. Although it doesn’t have the prettiest user interface, AppNexus provides a solid foundation for large publishers with lots of ad product strategists, technology developers, and experienced operations pros. Conversely, Admeld is a Leader because of the breadth of its current o"ering and its early innovation around features like private exchange capabilities, variable price &oor controls, and advertiser-level bid reporting. Although other vendors have recently added similar features and functionality, Admeld’s legacy of innovation means that these mechanisms are o#en more re%ned today and that it can aggressively push forward into new development areas.

· PubMatic and Rubicon Project follow closely behind. PubMatic and Rubicon Project have recently improved their o"erings with stronger publisher controls and deeper levels of reporting. PubMatic excels at yield optimization and serving publisher needs like audience data management. Likewise, Rubicon Project succeeds with its mix of an intuitive interface and innovation around bringing new demand sources to publishers.

· DoubleClick ADX is highly competitive. DoubleClick ADX succeeds due to its high reliability and integration into the popular DoubleClick publisher technology stack. !e DoubleClick ADX tool set has expanded rapidly over the past year and is bound to only improve with Google’s acquisition of Admeld.

· Right Media faces an uncertain future. Right Media was the earliest exchange player and introduced many of the publisher-side controls that are rapidly becoming standard on other SSPs. Still, Yahoo — Right Media’s parent company — has a mixed track record of investment in the product. Moreover, in addition to absent leadership, clients report concerns over declining customer service levels and the willingness of leadership to update the product at the same pace as other vendors.

!is evaluation of the SSP market is intended to be a starting point only. We encourage readers to view detailed product evaluations and adapt the criteria weightings to %t their individual needs through the Forrester Wave Excel-based vendor comparison tool (see Figure 2).



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Figure 2 Forrester Wave™: Sell-Side Platforms, Q1 ’12


Go online to download

the Forrester Wave tool

for more detailed product

evaluations, feature

comparisons, and

customizable rankings.

Risky Bets Contenders Leaders

Strong Performers

Strategy Weak Strong

Currento!ering

Weak

Strong

Market presence

Full vendor participation

Incomplete vendor participation

Admeld

AppNexus

Rubicon Project

Right Media

PubMatic

DoubleClick Ad Exchange



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Figure 2 Forrester Wave™: Sell-Side Platforms, Q1 ’12 (Cont.)


CURRENT OFFERING Auction and platform Publisher protection Yield controls and optimization Implementation and performance User interface and reporting

STRATEGY Corporate strategy Product strategy

MARKET PRESENCE Clients Financial viability Employees

Forr

este

r’sW

eigh

ting

50%15%25%30%15%15%

50%50%50%

0%60%20%20%

Righ

t Med

ia

2.452.502.102.303.662.10

1.200.601.80

4.284.603.004.60

Adm

eld

4.444.604.803.605.004.80

3.803.803.80

3.564.403.001.60

AppN

exus

3.924.504.204.104.342.10

4.804.605.00

1.841.403.002.00

PubM

atic

4.093.903.704.605.003.00

3.803.404.20

3.163.003.003.80

Rubi

con

Proj

ect

4.113.104.204.205.003.90

3.203.403.00

3.764.403.002.60

All scores are based on a scale of 0 (weak) to 5 (strong).

VENDOR PROFILES

Leaders

· AppNexus. AppNexus stands out from the pack with its unique approach to enabling publisher monetization. Rather than providing publishers with an out-of-the-box marketplace, AppNexus provides infrastructure and buy-side technical integrations that enable publishers to create their own market for inventory. For publishers that don’t need much support for complex sponsorship programs or other highly customized direct sales e"orts, AppNexus can also be the primary ad server. Making the most of AppNexus capabilities, however, requires strong strategic, technical, and operational skills from the publisher as well as investment in marketing the publisher’s solution to media buyers. So publishers looking for short-term simplicity need not apply. As such, AppNexus is ideally suited for large publishers that need to manage complex monetization challenges across multiple sites or properties and are willing to dedicate resources to building on top of the &exible and robust AppNexus platform.

· Admeld. Like its fellow classic SSPs, Admeld helps publishers manage both ad network and RTB channels, but its early investments in RTB technology have given it a head start over other SSPs. While other vendors have closed the gap on providing granular controls and advertiser-level



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visibility, Admeld continues to distinguish itself through its strategic services capabilities. Admeld clients have been among the most successful in fostering new buying models such as private exchange deals with agency trading desks. And these clients credit Admeld’s strong understanding of buy-side needs as instrumental in the formation and execution of these programs.

During the research process for this document, Admeld became part of Google’s DoubleClick division. We expect Google to model this acquisition a#er its earlier acquisition of demand-side platform (DSP) Invite Media. !is means that Admeld will continue to invest in expanding its current functionality while moving toward strategic product integration inside the DoubleClick stack. Consequently, we took into account Google’s broader ad technology vision when evaluating Admeld’s strategy but assessed Admeld’s current o"ering as an independent product o"ering.

· PubMatic. Although PubMatic is still in the early phases of rolling out advanced RTB features like private exchanges, the vendor impresses clients with strong service o"erings, successful automated optimization capabilities, and broad ad format support. PubMatic also is expanding beyond core SSP o"erings as it incorporates audience data management features into the platform and is looking to help publishers drive value by optimizing advertising and content together.

· Rubicon Project. Rubicon Project excels at helping publishers source and aggregate multiple sources of traditional and programmatic demand and stands out for its robust ad quality protection. It still lags behind other vendors in terms of establishing full private marketplace functionality that helps publishers manage billing and other contractual arrangements. Moreover, some clients may stress the capabilities of the vendor’s services and support teams — particularly in the New York City area — but Rubicon Project is rapidly expanding its East Coast footprint with strong hires to address this challenge. Still, Rubicon Project performs well with its innovation around non-RTB buying methods, including a proprietary integration with agency buying tool Donovan Data Systems (now MediaOcean) and its intuitive buy-side-focused REVV media buying platform.

Strong Performers

· DoubleClick ADX. Google opted not to participate in this Forrester Wave evaluation. Nonetheless, we felt that the substantial market presence of the DoubleClick ADX product warranted its inclusion in this evaluation. While we were not able to go into the same depth as with other vendors, publicly available documents and conversations with ADX clients revealed that ADX’s o"ering is evolving substantially. Historically, ADX has bene%tted chie&y from its strong scale, reliable %ll rates through Google’s ad network, and integration into the DoubleClick technology suite. Additionally, recent product enhancements such as the introduction of anonymous participation, private ad slots, and direct deals mean that publishers now have more controls within the platform. ADX still lacks some highly granular controls, advertiser-level reporting features, and strategic service capabilities of other vendors but will likely add many of those tools and more, with its integration of Admeld and ongoing product development e"orts.



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Contenders

· Right Media. Right Media remains a &exible platform that can meet a variety of ad serving needs and gives publishers a high degree of control. But the vendor has su"ered from a lack of strategic direction from its parent, Yahoo, and only recently launched broad support for buyer-preferred RTB buying. !is move should help streamline processes for buyers, enabling greater demand for publishers. Nonetheless, we have concerns — echoed by Right Media clients — over future investment in Right Media as both Right Media and its parent company undergo leadership changeover.

SUPPLEMENTAL MATERIAL

Online Resource

!e online version of Figure 2 is an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings.

Data Sources Used In This Forrester Wave

Forrester used a combination of three data sources to assess the strengths and weaknesses of each solution:

· Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor quali%cations.

· Product demos. We asked vendors to conduct demonstrations of their product’s functionality. We used %ndings from these product demos to validate details of each vendor’s product capabilities.

· Customer reference calls. To validate product and vendor quali%cations, Forrester also conducted reference calls with three of each vendor’s current customers.

The Forrester Wave Methodology

We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our %nal list. We choose these vendors based on: 1) product %t; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don’t %t the scope of our evaluation.

A#er examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria, we gather details of product quali%cations through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor o"erings and strategies.



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We set default weightings to re&ect our analysis of the needs of large user companies — and/or other scenarios as outlined in the Forrester Wave document — and then score the vendors based on a clearly de%ned scale. !ese default weightings are intended only as a starting point, and we encourage readers to adapt the weightings to %t their individual needs through the Excel-based tool. !e %nal scores generate the graphical depiction of the market based on current o"ering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve.

ENDNOTES1 Media buying technology and operations are undergoing a dramatic transformation — marketers are

replacing traditional relationship marketing tactics and opaque ad networks with programmatic media buying that includes transparent ad exchanges and audience targeting. !ese new options give interactive marketing professionals what they crave — better targeting, less waste, more e$ciency, and better results. However, marketers who don’t take an active role in managing this new form of media buying will pay the price, either by dealing with ine$cient buyers reluctant to abandon the old model or by ceding control to a demand-side platform (DSP) or central trading desk without entirely understanding its methodologies. To take full advantage of the opportunity and move one step closer to achieving the CORE mission, interactive marketers must jump into programmatic media buying by evaluating their current media buying partners against a new set of programmatic vendor and agency options to determine their ideal balance of service and control. See the September 21, 2011, “!e Future Of Digital Media Buying” report.


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