DIGITAL MARKETING HUB v2.0 - AdExchanger

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Digital Marketing Hub <strong>v2.0</strong> BMO Capital Markets Agency Trading Desks (ATD) Agency trading desks are the major communications holding companies primary entry into the programmatically bid, IP-advertising ecosystem. ATDs are often built upon licensed DSP technology and are housed within the holding companies broader media planning and buying arms. Along with other ad technologies, the holding companies (aka agencies) have generally been leaning toward partnering with the technology developers (which is complicated at times by the fact that they buy advertising from many of these same companies). Exhibit 51. Ad Holding Companies and Their Respective ATDs Holding Company Media Group Agency Trading Desk MaxComm Media Group Source: Company reports. Sell-Side Platforms (SSP) The term sell-side platform came to prominence in 2010 and grew out of a category we used to call “yield optimization.” These tools are designed for publishers to maximize ad sales, essentially a counter to buy-side tools like DSPs and ATDs. By optimizing the inventory for a variety of publishers, sell-side platforms can also serve as liquidity pools, similar to ad exchanges. In fact, like with the ad network-ad exchange relationship, SSPs, DSPs, and ATDs can also tie and buy and sell impressions from each other. Sell-side platforms also deliver intelligence to the human sales force in order to optimize rate cards for premium/guaranteed advertising. By giving a more transparent view than a “blind” ad exchanges or ad networks, publishers gain greater insight into what impressions and individual advertiser or agency is buying from them. This data can then be used by the broader sales and ad ops teams to optimize revenue generation. A member of BMO Financial Group 64 June 7, 2012
Digital Marketing Hub <strong>v2.0</strong> BMO Capital Markets Private Exchanges In aiming to maintain control over “second channel” ad pricing, private exchanges have become common in the past 18-24 months. These are exclusive marketplaces where a single website publisher (or group of publishers, e.g., Disney/ESPN family of websites) can sell its non-guaranteed inventory directly to buyers, including agencies/ATDs and DSPs. Private exchanges allow publishers to select and exclude certain buyers and set price floors for its inventory. At times, access to newly created private exchanges has required buyers to guarantee that they will spend more with the publisher in the following year. Tools to manage “direct buys” are increasingly being integrated into each of DSPs, ATDs, SSPs, and private exchanges. For example, independent DSPs and SSPs have recently begun connecting select pre-approved buyers and sellers, creating smaller, more controlled marketplaces that still take advantage of programmatic and real-time bidding technology. The point, as always, is that these business models are constantly overlapping and shapeshifting as innovation continues apace. Data Management Platforms (DMP) Up until now, we’ve mostly been describing these the Web 2.0 ad tech business models as being based around media/impressions; but in IP advertising ecosystem, data can be viewed as a separate asset/input altogether. Each impression generates multiple types of data (IP address, browser type, etc.), in a sense making it a much larger potential “marketplace.” In this sense, modern digital advertising data finds its roots in business models like direct mailing list vendors. The term “data management platform” has been a popular one lately, but remains relatively elusive to pin down. We first heard the term applied to start-ups like Bluekai, Exelate, Lotame and TargusInfo (acquired by public Neustar) in recent years. These companies began by creating massive caches of online usage data through cookies and then sold it to parties on both the buy and sell-side of the ecosystem in order to help optimize ad buys and sales. Today many of these companies also offer first-party data (see below) management tools and are increasingly integrating intent and purchase data. From here, we’ve seen the term adopted by more established players like Acxiom and Alliance Data’s Epsilon over the past six months. These companies have long-established relationships hosting marketers’ first-party marketing databases – including services to “cleanse” them and remove duplicates -- and then often layered on (or appended) their own third-party data products. Moreover, other ad technology companies that may normally be recognized as demand-side platforms, ad networks or other terms have built their own proprietary “data management platforms.” No doubt, the business model is in store for much more innovation and evolution in years to come. The term data management platform (DMP) has come to describe companies that deliver data via programmatic technology tools, in particular APIs. The source of the data was primarily from cookies that the DMP would drop on users’ browsers. Often called and/or branded as aggregators or exchanges, DMPs began to play the role of third party “fuel source” for the Web 2.0 display advertising ecosystem. Because of the intimate connection between media and data, DMP-like functionality is often found in DSPs, ad networks, and other business models (another example of the always innovating and overlapping ecosystem). A member of BMO Financial Group 65 June 7, 2012
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DIGITAL MARKETING HUB v2.0 - AdExchanger

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