This document provides an overview of various players in the ad technology sector to help marketers navigate the space. It describes ad exchanges, agency trading desks, demand-side platforms, data management platforms, and supply-side platforms. For each sector, it outlines their purpose, major players, business models, benefits, and concerns or questions for marketers to consider before employing their services. The overall goal is to help marketers understand the value proposition and potential issues within each part of the ad tech ecosystem.

1. A guide for Marketers
Navigating
PlanetAdTech
dat
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analys
is
dist
ribution
valuation
identi
fy
IN THIS REPORT
2 Part One: The Ad Tech Sectors
Ad Exchanges
6 Part Two: Pricing
Cost Per Mille
7 Part Three: Tactics
Audience Targeting
8 Part Four: Big Topics
Cookies
T
he promise of ad
technology is to get
marketers closer to
their customers via
data analysis, immediate valu-
ation and distribution. This
means using data to accurately
identify audiences, determine
the value of those audiences,
and deliver the right messages to
them instantly. The problem is
there’s an abundance of ad tech
firms all trying to capture their
portion of the media budget by
offering these services. With so
many players to choose from
marketers are finding it frustrat-
ing to navigate the space. The
purpose of this report is to out-
line the various players in the
ad technology sector and clearly
communicate their value propo-
sition, business model and
history in order to help marketers
ask the right questions.
+

2. 2 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 1: THE AD TECH SECTORS
Ad Exchanges
An ad exchange is a marketplace where
media is bought and sold, with complete
transparency and fluidity, modeled
after the same principals as the stock
exchange. It is in the exchange where
bidding from agency trading desks and
demand side platform (DSPs) is done.
Who has an ad exchange?
Appnexus, Google Adx, OpenX and Yahoo
RMX. Supply Side Platforms (SSPs) such
as PubMatic, Admeld and Rubicon also
act as exchanges.
History of ad exchanges
Ad exchanges were created as venues for
the real-time exchange of media inventory
to be executed by multiple buyers. When
introduced in 2007, real-time bidding
(RTB) allowed advertisers to bid auction
style on an impression-level basis and
load an ad in milliseconds.
How ad exchanges make money
Ad exchanges collect a percentage of
each transaction (e.g. 20%); thus their
incentive is to conduct as many transac-
tions as possible, sometimes resulting in
transactions that may not be transparent
to the publisher.
Benefits of ad exchanges
Exchanges provide publishers and adver-
tisers with an open and automated online
advertising market, promising
liquidity, operational efficiency, the
ability to cherry-pick impressions and
transparency.
Concerns with ad exchanges
In reality there is no such thing as a true
exchange for media. Every publisher and
advertiserhasproprietaryrelationshipswith
various platform providers. Every exchange
has its own relationships with various
Demand Side Platforms (DSPs) and SSPs.
Advertisers should split their buys across
multiple platforms to make sure they are
exposed to all available publisher inventory.
Today most of the inventory found on
exchanges is of varying quality, including
a mix of long-tail and premium inventory
offered side by side.
Many exchanges may not give the
context of where an impression is being
served (e.g. the publisher) as much value as
it should. Qualitatively, it can be difficult to
score or value an impression.
There are potential challenges around
brand safety and fraud if impressions are
not served as the buyer intends them to be:
forexample,adsmightbeservedondisrepu-
tablesitesormaybefraudulentlygenerated.
Some ad exchanges offer their own buy-
ing platforms so that advertisers can pur-
chase media directly through the exchange.
Advertisers should know this can result in a
conflictofinterest,sincetheexchangeisnow
representingboththeadvertiser(buyer)and
seller (publisher) of media under one roof.
Questions to ask before employing
an ad exchange
n How do I ensure I am not buying
blindly in a large category?
n What is the level of visibility into the
impressions I am buying?
n What is the percentage of your
inventory by category?
Agency
Trading Desks
Agency trading desks are the audience-
buying divisions of agency holding
companies. Their promise is to help
match the right audiences to the right
ad impressions efficiently at scale.
● Trading desks do not typically own
proprietary technology. They are made up
of people who specialize in analytics and
ad trafficking, and they often license one
or more demand side platforms (DSPs),
which collect and analyze audience data,
to deliver on this promise. The trading
desk team may also include ad operations
teams from each of the agency DSPs.
Where are trading desks found?
Most large holding company owned adver-
tising agencies have trading desks and a few
independent ones exist also. Those owned
byagencyholdingcompaniestypicallyserve
their own clients, and include WPP’s Xaxis,
MDC’s Varick Media, Omnicom’s Accuen,
also Publicis’s AOD , IPG’s MAP, Dentsu’s
AmNet and, Havas’ AffiPerf. Accordant
Media is an independent trading desk.
History of agency trading desks
Agency trading desks emerged for reasons
of operational efficiency. By 2007 it was
clear that advertising productivity could
be enhanced using technology, making it
easier for the agency staff to pick and
choose the best media placements on
behalf of their clients.
Buying and delivering online media is
more expensive and labor intensive than
traditional media, so trading desks were
created to streamline the system and keep
the costs in check.
Benefits of agency trading desks
Agency trading desks crunch and analyze
audience behavioral and demographic
data to uncover the insights needed to
help a client reach its optimal audience
and deliver on its key performance indi-
cators (KPIs).
TheAd
TechSectors
Part One

3. 3 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 1: THE AD TECH SECTORS
Data
Management
Platforms
A growing number of ad tech vendors
are incorporating data management
platforms (DMPs) as part of their service
to clients. DMPs are data warehouses
for gathering and analyzing both first
and third-party data.
● Some of this data is collected offline,
or at least off the Internet; for example
supermarket data collected from loyalty
cards, or customer registration data. The
rest is collected online, either from past
campaigns or via cookie data.
DMPs can now also track mobile data
assets, as well as unstructured audience
data collected online from sources like
video, social and web analysis tools, and
points of sale.
DMPs are aggregators, collecting and
managing data that enables marketers to
scrutinize characteristics of an audience
segment, which can then be translated
into more focused and effective cam-
paigns and content. This means clas-
sifying audiences into categories, such
as “Technology Enthusiast” or “Soccer
Mom.”
DMP technology is typically deployed
within a marketing department or inside
the agency’s trading desk to help marketers
understand their customers.
What DMPs are out there?
Examples of stand-alone DMPs include
Aggregate Knowledge, Adobe (Demdex,
now called Adobe Audience), Audience
Science and Lotame. Third-party data
providers like Blue Kai and eXelate,
who aggregate behavioral data to create
thousands of targetable audiences, are
now positioning themselves as DMPs/
DSPs with integrated data management
functionality.
Acxiom, Adchemy, Datalogix, Demdex
(now owned by Adobe), Digilant, Epsilon,
eXelate, Experian, Krux Digital, Lotame,
Mediamath, Targetbase, Targusinfo,
They also operate within the existing
advertising agency making it possible for
the client to maintain fewer relationships.
The agency trading desk may also benefit
from the traditional media buying teams
being under one roof because they can
leverage and share information internally.
Howagencytradingdesksmakemoney
Trading desks make their money on fees,
commissions, or in some cases, arbi-
trage—profits earned by reselling media
to their clients.
Concerns with trading desks
Most of the criticism regarding trad-
ing desks is focused on transparency of
pricing, and specifically on the issue of
arbitrage, a term familiar to many from
international currency trading. Arbitrage
in this context is buying up media inven-
tory space as principal to the transaction,
then reselling it to an advertiser (agency
client) usually at a higher price, violating
the concept of “agency”. Not all trading
desks engage in arbitrage.
The trading desks are justifying their
practices by claiming that the “impres-
sions” they are selling (each time an online
ad is displayed constitutes an impres-
sion) become more valuable once they
have layered on their own insights. They
also claim that arbitrage profits are rein-
vested into new technology, which in turn
benefits the client.
It’s essential to ask questions before
employing a trading desk. Here are a
few examples.
Questions to ask before choosing
a trading desk
n What is your business model?
Do you practice arbitrage?
n How much money goes to the agency,
how much to the trading desk?
n How do you set performance goals?
n How can I be certain I am reaching
my target audience?
n How many inventory sources
are you connected to?
n What technology platforms do you
use and what criteria do you use
to evaluate their performance?
n Do you use ad verification?
n How are your partners evaluated
on an ongoing basis, and by whom?
n How do you protect my brand?
n What inventory sources outside
of the ad exchanges are you
connected to?
n How is my data protected?

4. 4 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 1: THE AD TECH SECTORS
Demand-Side
Platforms
Demand side refers to the purchaser of
media—or the advertiser. Demand-side
platforms (DSPs) are systems that serve
ads on behalf of the advertiser in real-
time based on specified rules. Those
rules are based on the data provided by
advertisers and by inventory sources
(Exchanges and SSP’s) when an
impression is offered for auction or sale.
● The data stream, sometimes called
bid stream, provides limited information
about a user and the content where the
impression will be displayed. A DSP may
use behavioral targeting data to deter-
mine if the audience segment and con-
tent should be targeted. If the targeting
criterion meets the advertiser’s objec-
tives some DSPs determine how much
it should bid for such impressions on
behalf of their client using algorithms
that analyze the incoming data stream.
DSPs are most often licensed by
agency trading desks but they are also
used directly by independent agencies
that don’t have internal trading desk
teams, ad networks and some brands
that do their own media planning and
buying. DSPs focus mainly on display
advertising but are increasingly tapping
into video and mobile inventory, as well
as newly developed social opportunities.
Who has a DSP?
Platforms include Dataxu, Digilant,
Invite (acquired by Google) MediaMath,
Rocketfuel, The Trade Desk, Turn,
and [x+1].
History of DSPs
DSPs were created to facilitate real-time
bidding on ad exchanges. Each DSP
must hold a seat on each exchange in
order to receive the bid stream infor-
mation. In response to slow adoption by
agencies, the first DSPs (Turn, Rocket-
fuel, [x+1]) positioned themselves as ad
networks, a perception that persists in
the marketplace.
and [x+1]are DSPs with DMP functionality,
sometimes referred to as consolidated
media buying platforms, while Collective
and Turn offer similar services plus addi-
tional publisher offerings.
History of DMPs
Demdex,thefirstDMP,waslaunchedin2008
as an improvement upon cobbled-together
in-housesystemsworkingtocollectandana-
lyze the large volume of new online data.
Publishers started using DMPs to manage
and segment their audience data, enabling
them to profit from audience targeting and
site personalization. Real-time audience
buyingpromptedagenciesandbrandstouse
DMPtechnologytounderstandandoversee
the customer journey.
Benefits of DMPs
DMP technology exists to help marketers
and publishers simplify data analysis to
discover trends and deconstruct audience
behavior so that clients can formulate
optimal targeting strategies.
A DMP can tell you, for example, how
many users bought children’s clothes in a
certain range of sizes and also searched
for video game software; it is also possible
to estimate those users’ income levels,
geographic location and other interests.
DMPs have a quite varied range of
offerings. None of them provide all of the
following services so it is important to
know what you are trying to deliver before
selecting a provider.
Here is a smapling of those varied
services:
n Integrate reporting across real-time
bidding (RTB), non RTB and other
digital channels.
n Analyze and report on third-party data
audiences that are right for the brand.
n Develop derivative audience or look-
alike models of combined data assets.
n Distribute audience buys across RTB/
non RTB inventory sources.
n Integrate advertiser first-party
non-digital CRM data with digital
network data.
n Integrate publisher first-party data
with extended digital data.
How DMPs make money
Pure-play DMP vendors charge a flat
monthly fee based on volume of data
assets. Companies that offer integrated
DMP services may bake their fees into the
cost of media.
Concerns with DMPs
As ad tech vendors offer increasingly
comprehensive solutions for clients,
some traditionally stand-alone DMPs
have begun to offer audience buying as
well. But this can be problematic since it
may incentivize the DMP to share data
from various customers across the DMP
organization to improve the overall
performance of audience buys.
Another concern is whether some
DMPs can provide the analytics to explain
why an audience might be the right target
to achieve a marketer’s KPIs. All too often
the information provided doesn’t contain
actionable insights into what influences
customers. And it can still be difficult to
show that the data improved ROI.
Questions to ask before employing
a DMP
n How will you define the metrics that
will best help me best understand my
customer or potential customer?
n How will you measure the reach of
those users across media channels
and across touch points, both online
and offline?
n How do you manage third-party
data vs. first-party data?
n How is data exchanged between
different platforms?
n How would you handle a client
that wants to take a certain segment
of data and cross-reference or
combine it with another data set
from another provider?
n How do you know what a good
prospect looks like?
n How can I be sure the data you are
using is accurate and current?
n Are you reselling or giving away any
data that might be private?
n How can I generate new sales by
using a DMP?

5. 5 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 1: THE AD TECH SECTORS
direct connections to DSPs. And all SSPs
offer yield management tools for publishers
tohelpthemmaintainandcontrolpriceand
volume of inventory.
Who has an SSP?
The big ones are Pubmatic, Rubicon and
Admeld (acquired by Google). Some ad
networks are now referring to themselves
as SSPs as well.
History of SSPs
SSPs emerged as a more efficient way for
larger publishers to navigate ad networks
and fill as much remnant inventory space
as possible.
How SSPs make money
The SSP collects a percentage of each
transaction (10-15%) from the DSPs.
Benefits of SSPs
SSPs help marketers access more valuable
inventory during the real-time bidding
process, and they help uphold a publish-
er’s brand standards by maintaining the
right to block certain advertisers from
accessing their inventory.
Concerns with SSPs
SSPs, like exchanges, offer publishers
yield management tools to manipulate
the open market. Some examples include
the ability to set floor prices, which give
the publishers control over the minimum
price of an impression sold via the SSP.
Another concern is that many SSPs
offer DSP like services in addition to sell-
ing publisher inventory, meaning they
represent both the buyer of media and
the seller. This is often seen as a conflict
of interest. If a majority of the SSPs rev-
enue comes from the sell side, then the
SSP is typically offering tools that favor the
publisher rather than the advertiser.
Questions to ask before employing
a SSP
n What KPIs can you accommodate?
n Which publishers contribute to your supply?
n What is your price floor and how is that
price established?
n How much of your revenue comes from ad
sellers versus ad buyers?
How do DSPs make money?
DSPs collect a percentage (10-30%) of
media spending and pay the exchanges,
supply-side platforms (SSPs) and data
providers. Often their fees are included as
part of the cost of media, but some break
it out as a separate line item.
Benefits of DSPs
DSPs make it possible for advertisers to buy
audiencesonaone-to-onebasis,ratherthan
inbulkfromaparticularpublisher’swebsite
as was done in the past. They also facilitate
buying from multiple inventory sources via
one platform, thus making the process less
complicated for the agency and client.
A DSP can constantly assess available
inventory, refine campaign optimization
models—bothautomatedandmanual—and
make the best possible real-time bidding
decisions. They allow for better price trans-
parency and let buyers choose only their
most desired impressions and then bid for
those users dynamically.
Used well, a DSP can improve intel-
ligence about customers, improve under-
standing and engage more prospects, and
offerpotentialtosignificantlyboostmarket-
ing performance.
Concerns around DSPs
There are complaints that some DSPs bury
their costs in the price of media, which
skews incentives for every vendor in the
tech stack. But the counterargument to this
is that percentage-based engagement gives
incentive to the DSP to overpay for media
and data. This can be manipulated by the
DSP through their bidding strategies, algo-
rithms and inventory curation practices.
All DSPs use the same third-party
data and access the same inventory on the
exchanges, and marketers are wary about
the quality of exchange inventory. To ease
someofthoseanxietiesSSPsbeganenabling
publishers to establish private exchanges,
whereinventoryisonlyvisibletoagenciesor
DSPs that they have privately pre approved.
DSPs can access premium inventory via
private exchanges although the publisher
must have already established its relation-
ship with an SSP in order for this to hap-
pen. But this is still not the panacea that
washopedfor,becausetheprivateexchange
system is still very small in scale.
Another concern is that DSPs some-
times fall prey to click-bots and other
fraudulent activity prevalent on exchange
traded media.
QuestionstoaskbeforeemployingaDSP
n How many inventory sources are you
integrated with?
n How quickly can I create a campaign
using your platform? How quickly can I
make changes?
n What kind of reporting do you provide? Is
your reporting insightful and actionable?
n Is there an application program interface
(API) that will pull reporting out of your
system and integrate it with other systems?
n Do you have any managed services?
What kind of support and training will
my team receive?
n How do you integrate the data to meet
my goals as a client?
n How will you provide insights and infor-
mation on not only my presumed target
audience but my potential audience?
n How will you help teach me to make
smarter, more cost-effective decisions?
n How do you monitor whether a campaign
is working? What kind of analytical
methods do you use?
n What set of features do you offer? How do
they compare to other DSP’s offerings?
n How much do you charge?
n How do you select the quality of an
audience to bid on?
n How will you help me understand what
drives marketing performance and who
is interacting with my brand?
Supply-side
Platforms
Supply refers to the seller of media—in
most cases the publisher. Supply-side
platforms are vehicles for publishers
to make their inventory available for
programmatic buying via an exchange
type marketplace.
● They promise transparency and control
overwhocanseetheirinventoryandatwhat
price. SSPs also act as exchanges, providing

6. 6 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 2: PRICING
buying of online advertising across the
web, targeting specific audiences, often in
real time. The term programmatic reflects
the intended workflow improvements of
automation. Prices may be determined by
an algorithm, or pre-determined based on
specified criteria.
Programmatic buying enables impres-
sion by impression based buying as offered
by automated marketplaces as opposed
to the bundling of impression in CPM or
thousands of impressions blocks. In order
to achieve automated efficiencies the adver-
tising units purchased by programmatic
buyers are standardized with limitations
on the variety of available units. By way of
comparison to traditional buying, which
takes place by negotiating directly with a
publisher’s sales team in CPM blocks and
can include non-standard or custom oppor-
tunities, programmatic buying intends to
be more efficient by offering standardized
impressions. And if the data it is based on
is right, that ad is more likely to be seen
by someone who is more likely to find
that brand, product, or service relevant
because its impression driven rather than
volume driven as traditional bulk buying
is. Data-driven, programmatic advertising
can be used when buying online display
ads, mobile and video ads. The benefits are
automation, workflow improvement and
better results.
Programmatic selling
This is the automated selling of a publish-
er’s online inventory, usually ad space that
was previously unsold; so-called “rem-
nant” inventory ramped up for audience
buying with the help of first and third party
data. It usually takes place through RTB,
but not always. Prices are usually less than
for “direct sales” made between an adver-
tiser and a publisher’s sales team. And
although publishers can help drive up rev-
enue from ad space that would have been
left unfilled this way, some are wary of
the system, out of fear that it drives down
prices, introduces new middlemen, and
cannibalizes their own inventory. There
is also some use of private marketplaces
in programmatic selling which, although
automated, still allows for one-to-one
communication between publisher
and advertiser.
Cost per mille
Cost per mille (CPM) actually represents
cost per thousand, which is the price
an advertiser pays to reach a thousand
viewers. In digital advertising CPM is
calculated by dividing the cost of an
advertising placement by the number of
impressions (expressed in thousands)
that it generates.
How CPM is determined in RTB
RTB providers (trading desks and DSPs)
determine CPM by available impressions,
market volatility, target audience parame-
ters and historical clearing costs of media.
Benefits of CPM pricing
CPM pricing carries less risk for adver-
tisers because it enables them to secure
a flat rate for cost of media regardless of
fluctuations in the cost of media for the
RTB provider.
Concerns with CPM pricing
Due to the dynamic nature of clearing
costs, a fixed CPM does not always guaran-
teed accurate value for buyers and sellers.
Dynamic
cost per mille
Dynamic cost per mille (dCPM) provides
advertisers with the exact clearing cost
of media plus a technology fee, allowing
for variable daily pricing adjustments.
How dCPM is determined in RTB
The dCPM pricing model requires that
RTB providers make media clearing
Pricing
Part Two
costs transparent to buyers daily. They
also charge a transparent technology fee
for every thousand impressions served in
addition to the cost of media.
Benefits of dCPM pricing
Advertisers can determine actual cost of
media and pay a set technology fee for
every thousand impressions served mak-
ing it possible to adapt pricing daily and
seasonally depending on market trends.
Concerns with dCPM pricing
Dynamic pricing requires more hands on
participation by the advertiser because
they must spend more time tracking and
monitoring daily advertising costs.
Defining ad
tech basics
Real—Time—Bidding
RTB enables a marketer to participate in
an auction for the purchase of individual
online ad impressions in “real time,” i.e.
during the milliseconds that elapse while
a user downloads a web page.
The idea is to provide marketers
with the ability to target key audiences
wherever they might be online for an
appropriate price, based on a range of
consumer attributes and their potential
worth to an advertiser. The marketer can
then place a bid and select the most suit-
able advertisement for that particular
targeted consumer. For the first time in
the history of advertising, advertisers no
longer have to rely on the publisher as a
proxy for audience—the consumer can
now be found and targeted with relevant
advertising directly.
Programmatic buying
Programmatic buying is the automated

7. 7 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 3: TACTICS
Concerns with audience targeting
Audience targeting relies on data avail-
able via the browser cookie, and algo-
rithms that analyze the cookie data,
neither of which is a good proxy for
actual human behavior. Algorithms can
also be easily fooled by click-bots or inac-
curate cookie data so advertisers who
deploy them should ask what precautions
are made to avoid this activity.
Some marketers also argue that con-
text is more important than audience
targeting.
Contextual
Targeting.
Contextual targeting is the targeting
of advertisements based on the
classification of inventory.
Most often the classification of
inventory is provided by the publisher
themselves with little concern for
precision. Publishers and automated
inventory providers mark inventory in
categories of broad demand or highly
sought after segments.
Inventory may also be classified for
context by the use of “spiders” that crawl
web pages and analyze the content for
the purpose of ad targeting. Content is
classified by category or taxonomy, so
advertisers can target pages that are
more likely to contain material around a
given subject or idea. Negative contextual
targeting ensures for example that an air-
line ad will not end up running adjacent
to an article about a plane crash. Positive
contextual targeting allows brokerage
firms to run ads on pages with content
relevant to stock trading.
Big data
When it comes to ad tech, “big data”
means taking all the voluminous points
of information on consumer behavior and
then crunching and analyzing that data in
order to pinpoint a target audience, per-
sonalize messaging, and, ultimately, boost
sales. Data has been around for a long
time. What is new is its massive volume
and variety, the speed at which it is cap-
tured, and the ability to store and make
sense of it in real time. A key part big data
is the ability to analyze information and
build predictive models.
Big data can help facilitate real-time
decision making through the analysis of
factors like audience behavior and by pre-
dicting response rates.
Algorithms
Algorithms, the so-called “secret sauce”
for technology giants like Google, are
similarly the secret sauce for ad technol-
ogy firms, driving how bids are made in
programmatic buying of online ad inven-
tory wherever it is found within display,
search, social media, or other venues. In
pure computer terms an algorithm is the
automated code that makes sense of a
group of variables and data in order to
make a decision. In ad tech, an algorithm’s
job is to make the most efficient, targeted,
relevant and customized marketing deci-
sion, by combining instructions on bud-
get, marketing performance, goals, the
market itself, together with factors like a
user’s location, the time of day, informa-
tion on consumer history, and third-party
data, in order to make a bid for a single
ad impression. However, some ad tech
providers are pulling back the curtains
in favor of providing full transparency
and control to clients. These companies
include DataXu with their algorithm mar-
ketplace and Digilant with its custom val-
uation technology known as BOSS.
Because of proprietary issues, the
exact workings of a vendor’s algorithm
and why it works can be tricky to ascer-
tain. The algorithm is not just a machine-
automated task, but something that needs
to be tended and expertly tweaked by pro-
fessionals in order to best leverage their
results for a better and more relevant cus-
tomer experience.
Audience
Targeting.
“Audience” is a euphemism for an
advertiser’s target market, consumers
or people.
Every advertiser is seeking to commu-
nicate directly with audience prospects
that are most likely to improve its busi-
ness goals. Ad technology promises that
ads can be delivered to the right audi-
ence, at the right time.
As David Verklin, an early media
agency player said: “No more diaper ads if
you don’t have or are not expecting a baby.
No more dog food ads if you don’t own a
dog. And no more denture cream ads if
you have a really good set of choppers.”
Benefits of audience targeting
Audience targeting utilizes data to assess
who is behind each impression and how
valuable that impression is. An auto brand
for example will value each of the follow-
ing impressions differently: someone in the
marketforacar,acarenthusiast,andsome-
one who fits the target profile but is not car
shopping at the moment.
Another benefit of ad technology is
the ability to deliver dynamic creative
content that reaches each audience
—changing the message at different
stages of the buying funnel for more per-
sonalization and optimization to control
the response.
Tactics
Part Three

8. 8 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 4: BIG TOPICS
Cookies
A cookie is a tiny text file planted by web
sites on browsers to track what users are
reading, buying and searching for online.
History of cookies
Originally, Web pages did not allow stor-
age of a user’s history or requests. Each
page would load in isolation of the one
that came before it. Netscape designed the
cookie in 1995 to provide a trail to keep
track of where a user was in the midst of
a web application, allowing features like
shopping carts or memory of a user pref-
erences or login information.
First-party cookies
This is information collected by a brand
or an online publisher for its own use. In
the case of Amazon, for example, such
cookies store information about customer
purchases and preferences.
Benefits of first-party cookies
First-party data is considered especially
valuable because it provides the most up-
to-date and clear snapshot of a customer’s
Look-alike
Targeting
This is the attempt to classify the behaviors
and characteristics of people who have
already shown interest in a product or
service, and use probabilities to find new
customers with similar behavior patterns
who are also likely to be interested in the
same products or services.
Benefits of look-alike targeting
Look-alike targeting is a good way to
reach out and prospect for new custom-
ers who are likely to convert.
Concerns with look-alike targeting
By definition, look-alike targeting is a
tactic to reach prospective customers
who may not be familiar with a brand or
product, so it doesn’t necessarily result in
immediate conversion. This is why it is
often considered a higher funnel tactic.
Retargeting
When a consumer visits a website a pixel
often is triggered and a cookie is dropped
on the user’s browser (typical browsers
are Internet Explorer, Chrome and Firefox).
● The retargeting cookie enables ad
technologists to track and analyze a user’s
behaviors online so they can reach them
with additional advertising message
across the different online properties.
Benefits of retargeting
Itworks.Retargetinghasbeenmoresuccess-
ful in boosting clicks and transactions than
anyotherdigitaladvertisingstrategythusfar.
It also provides for the best possible cost per
acquisition, (CPA) because the prospect is
alreadyclearlyinterestedinthebrand.Retar-
geting reliably produces measurable ROI for
clients when using last touch/last click mea-
surement, especially compared to display
advertisingoverall,wheresuccesscanbemore
difficult to trace.
Retargeting can be presented in dif-
ferent ways, such as an additional ad
impression, an offer for free shipping, or a
discount with an expiration date.
Concernswithretargeting
The success of retargeting is wholly depen-
dent on the volume of traffic to a site. It
may be effective in capturing “low hanging
fruit” because those customers are already
aware and therefore more likely to buy any-
way. But it does not help marketers achieve
their overall sales goals, because the pool
of potential targets is small and it does not
attract new business.
BigTopics
Part Four
It is also risky to repeatedly place the same
ad in front of consumers and overexpose them
to the same idea or product. Often consumers
experienceburnoutormaystartforminganeg-
ative association with the brand, even getting
feelingsofbeing“creepedout”bythesensation
they are being followed around the Internet.
Sinceretargetingreachesalimitedaudi-
ence,itisalsopossibleformarketerstoover-
expose users to the same messages when
they engage too many retargeting providers
on a plan. Negative brand perception could
also be created if excessive retargeting con-
tinues after the person has already made a
related purchase.
behavior. First-party cookies enable pub-
lishers and brands to personalize content.
Issues with first-party cookies
Personalizing content based on the cookie
trail limits the user experience and deters
consumers from other paths that could
lead to discovering other interests and
making additional purchases.
Third-party cookies
These cookies are used to follow the same
browsers across the entire internet. Third-
party cookies are placed by a party other
than the site the user is currently visiting.
When a user is detected visiting a pub-
lisher’s site, the publisher sets the first-
party cookie and the advertiser sets the
third-party cookie.
Manyotherpartiesincludingadnetworks,
exchanges and DSPs, set third-party cookies.
Benefits of third-party cookies
Third-party cookies allow the marketers
to track user behavior for retargeting and
audience targeting purposes within the
whole universe of websites.
Issues with third-party cookies
While users recognize the value of

9. 9 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTPART 4: BIG TOPICS
action, including every touch point along
the way.
The challenge for a marketer is to track
those touch points and determine how
they ultimately contributed to a sale.
Marketers need to use tools such as ad
verification services to ensure that an
impression was indeed delivered to the
intended page.
For branding managers especially, it
has become increasingly important to
focus on dwell time and “viewability,” that
is, whether ads are actually seen and for
how long, among the audience they have
targeted. This also has technical limi-
tations. Dwell time can be tracked, but
viewability currently cannot.
The predominant approaches to
viewability are to
n Sample domain viewability by sending
a crawler that follows some of the ad
impressions in order to determine a
probability of viewability. This method
does not measure actual viewability.
n Sample actual impression viewability by
exploiting browser security gaps, and
then extrapolating this sample on the
domain/seller as a whole.
n Sample the probability of viewability by
the propensity of a mouse to move over
an ad.
None of these methods is an actual view-
ability measure that is acceptable as an
auditing function. They are—debatably—
good as relative measures that can allow
an ad buyer to filter/optimize towards
viewability.
Concerns with attribution
The user experience is fragmented among
multiple devices, online and offline, on
websites and social media. A purchase
often occurs only after multiple site vis-
its. Tracking multi-touch-point journeys
and attributing them is challenging.
What to consider when choosing an
attribution model
How does my success rate change when
I use a different attribution model, such
as equal weight or a model that accounts
for decay?
Connecting
The Dots
The ultimate goal of every digital
marketer is to get closer to the
customer. Ad technology can help but
there are points you should consider.
● Most importantly all must realize that
the “Ad Tech” space is still in its infancy.
The associated technologies are still in
early stages of release and its business
models are still evolving. Substantial prog-
ress has been made towards shortening the
gap between consumers and brands at
scale but things are far from perfect.
The distinctions between roles are
blurry, for example a DSP and an agency-
run trading desk may perform essentially
the same function – the management of
a campaign and its media buying. A deci-
sion about which to work with will prob-
ably depend on the marketer’s desire for
expertise, proximity to the technology
provider, contractual structure, budget
allocatedtodigitalchannelsandknowledge.
Advertising Audit and Risk Manage-
ment (AARM), a provider of independent
advertising audit and consulting services,
advises advertisers to ask many questions.
These should include whether or not the
trading desks benefit from rebates or dis-
counts from publishers and others, and if
those reductions are passed on to clients.
AARM also suggests establishing upfront
guidelines to monitor campaign efficiency
and effectiveness.
Agency Trading Desks offer the con-
venience of being closely aligned with a
brand’s agency although as previously
discussed the ATD’s business model may
cause marketer’s concern. Working directly
with a DSP can provide more transpar-
ency and control, and cut out the costs of
media agency and the trading desk. They
offer managed service contracts and some
offer self-service contracts or technology
licenses depending on how your market-
ing team chooses to operate.
Meanwhile, the publishers, particu-
larly top-tier ones, appear caught in the
middle. RTB was pitched as a good
first-party cookies that hold items in their
shopping cart and remember their login
info, tracking by third parties is seen by
many as an invasion of privacy.
Retargeting in particular is seen as an
egregious practice that creates the impres-
sion of being “chased” by ads. Countries in
the EU have already passed legislation to
ensure that users opt in to tracking cook-
ies (fact check), and DNT (do not track)
legislation is being discussed in the United
States. There is also a higher likelihood of
data leakage with third-party cookies than
there is with first-party cookies.
Ad-tech privacy issues
Privacy appears to be the Achilles heel of ad
tech. The assumption has been that people
accept the collection of data regarding
their online behavior because it is not
personally identifiable and enables them
to receive more relevant advertising,
but users are increasingly aware of the
issue and beginning, in some cases, to
push back.
Attribution
Attribution is the ability to identify
the effect of every single impression
across every medium during the
customer journey.
● When a brand employs a mix of TV,
search, and digital display advertising,
to which does it attribute each customer
action? The most common attribution
model used in digital advertising is “last
touch/last click.” One hundred percent
of the customer action is attributed to
either the last ad clicked or the last ad
served. This can be either a display ad,
search ad or other type of digital ad.
But last click/last touch is an imper-
fect measure. For example search tends
to get a disproportionate amount of
credit towards the end of the sales cycle,
where display advertising has clearly
played a role in creating interest for a
particular product or brand. For this
reason attribution has begun to focus
on the more complete story of a cus-
tomer’s journey towards a purchase or

10. 10 NAVIGATING PLANET AD TECH MIT TECHNOLOGY REVIEW + DIGILANTACKNOWLEDGMENTS
This white paper was produced by MIT Technology Review Custom. Thank
you to the following people who contributed their opinions and expertise:
Jeremy Hlavacek, VP,
Strategy and Business
Operations, WeatherFX
at The Weather Channel
(formerly at Varrick)
Jason Fairchild, Chief
Revenue Officer, Open X
Ed Montes, CEO of
Digilant
Joe Zawadzki, CEO, Media
Math
Paul Alfieri, VP Marketing,
Turn
Joshua Koran, Senior
Vice President of Product
Management, Turn
Adam Kasper, Chief Media
Officer, Havas Media,
North America
Sandro Catanzaro, VP
Strategy, Dataxu
Omar Tawakol , CEO,
BlueKai
Pascal Bensoussan, Chief
Strategy Officer, Aggregate
Knowledge
Brian O’Kelley, CEO,
AppNexus
Ari Paparo, Senior Vice
President of Media Prod-
ucts, Baazarvoice
Kirk McDonald, President,
Pubmatic
Duc Chau, Founder and
SVP of Research and
Development, Rubicom
Christina Beaumier, VP
of Product Development,
Xaxis
Perianne Grignon, Chief
Marketing Officer,
X plus One.
Matt Greitzer, Chief
Operating Officer,
Accordant
Arthur F. Muldoon, Jr.
Co-founder CEO,
Accordant
Meredith Levien, Chief
Revenue Officer, Forbes
Matt Prohaska,
Programmatic Advertising
Director, The New York
Times / NYTimes.com
John Slade, Commercial
Director, Digital Advertising,
The Financial Times
Brian Morrissey, Editor-
in-chief, Digiday
Scott Neville, Chief
Marketing Officer,
IPONWEB
Tom Hespos, President,
Underscore Marketing.
Marc Goldberg, CEO,
dailyRx (formerly CEO,
About.com)
Alex Sutton III, Acquisition
Manager, My M M’s,
Mars Retail Group
Debi Kleiman, President,
MITX
Eric Hjerpe, Partner,
Kepha Partners, VC Firm
AboutMITTechnologyReviewCustom
Built on over 100 years of excellence in technology journalism, MIT Technology
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deal for them, a “win-win” because it was
thought that people would pay more for
targeted ads. But that does not appear
to be happening yet. Publishers are also
evolving in the Ad Tech era learning to
balance revenue achievement between
programmatic and direct sales. However
the oversupply of inventory makes this a
challenging situation. The pendulum of
power has swung a bit to favor market-
ers who can take advantage of data and
proprietary information to better value
advertising inventory and react to mar-
ket prices of an oversupplied system. Yet
new tools and developments in the space
developed for publishers are pushing back
against the buyer’s incursion. Applications
such as private deals and marketplaces
empower publishers to create layers of
scarcity and drive up prices. Both buyers
and seller are also learning to make distinc-
tions between “programmatic” efficiencies
and auction or automated marketplace
benefits.
Typically advertisers use a mixed
approach to achieve their goals: a combi-
nation of premium content directly bought
from the publisher along with inventory
auctioned through RTB.
Some publishers are seeing an oppor-
tunity in programmatic buying; a chance to
package segments themselves, like secur-
ing rare high-net-worth-specific audi-
ences by blending their own data with
third-party data. Some UK publishers are
already thinking this way, including The
Daily Mail. The Financial Times is explor-
ing the option and in the United States
The New York Times and Conde Nast are
offering similar services.
Meredith Levien, Forbes Media’s group
publisher and chief revenue officer, argues
that publishers can lead in both worlds;
direct sales and programmatic buying.
She says the intelligence gathered on the
exchange about which consumers are
buying what products can translate into
smarter strategies by the publisher’s direct
sales team.
Ultimately the move towards automa-
tion in digital media is upon us, but it's up
to the advertisers and publishers to deter-
mine how to make it work for them.