This presentation shares the evolution of programmatic media and how programmatic media works.

1. A HISTORY OF PROGRAMMATIC MEDIA

2. I. Programmatic Evolution
II. How Programmatic Works
Table of Contents
2

3. PR OGRAMMATIC E VO LU TIO N

4. RTB GOES
MAINSTREAM
1994 1996 2005 2007 20112000
DIGITAL AD EVOLUTION
DSPs
LAUNCH
AD
EXCHANGES
LAUNCH
ADWORDS
LAUNCH
(SEARCH)
AD
NETWORKS
LAUNCH
DIGITAL
ADS
LAUNCH
4
2008
MDC
LAUNCHES
VMM

5. Advertiser and Publisher negotiate CPM and budget to show
an ad for a given period of time
Advertiser
Publisher
5
IN THE BEGINNING…
DIGITAL AD BUYING WAS RELATIVELY SIMPLE

6. AdvertiserPublishers
More parties to deal with / Higher cost to attain reach / Higher overhead
6
BUT IT BECAME EXPONENTIALLY COMPLEX
Publishers

7. MARKET OPPORTUNITIES DEVELOPED
• Inventory centralization
• Reduced overhead
• Scale at lower costs
• Automation
• Smarter targeting
• More data
7

8. Pros:
Advertisers: Centralized
buy; lower cost
Publishers: Helped sell
inventory at scale
Networks aggregate site inventory into single package
Cons:
Advertisers: less transparency and
precision with pubs and audience
Publishers: Still a large amount of
unsold inventory
Tremor
Network
Reuters
Men’s Fitness
Food Network
Sports Illustrated
AOL Network
VH1
USA Today
Ellen
Comedy Central
8
NETWORKS SIMPLIFIED THE PROCESS

9. A marketplace to make real-time bids for ad inventory (like search)
Pros:
Advertiser: Greater site
flexibility and lower costs
Publisher: Sell larger amounts
of ad space
Cons:
Advertiser: Need technology to manage
multiple exchanges and hit audience
Publisher: Difficult to maximize
profitability
Google (ADX)
Exchange
Yahoo
Exchange
NetworksNetworks
9
EXCHANGES ADDED SCALE
Publishers Publishers

10. -Focuses on the audience rather than the site
-Centralizes point of access for inventory
-Access to robust data for smarter decisions
Programmatic
Exchange
Network
Publishers
10
PROGRAMMATIC EMPOWERED WITH CONTROL
Programmatic uses intelligent software to purchase digital advertising

11. PROGRAMMATIC FLIPPING THE MARKET
11
0%
20%
40%
60%
80%
100%
2011
2012
2013
2014
2015
2016
2017
Programma3c
Non-­‐Programma3c
eMarketer: “US Display Ad Spending Share, by Type” 2013

12. HO W
PROGR AMMATIC
WORKS

13. Definition
(IAB)
Publisher
Advertiser
Programmatic
Guaranteed
(Premium, Direct)
Private Exchange
(Invite-Only
Auction)
RTB
(Open Auction)
TYPES OF PROGRAMMATIC BUYING
13
Purchase of ads through
real-time auctions
Publisher restricts auction to
select buyers/advertisers
Resembles traditional direct
sales; differentiated by
automation of RFP, IO,
trafficking for publisher

14. Definition
(IAB)
Publisher
Advertiser
Programmatic
Guaranteed
(Premium, Direct)
Private Exchange
(Invite-Only
Auction)
RTB
(Open Auction)
TYPES OF PROGRAMMATIC BUYING
14
Purchase of ads through
real-time auctions
Publisher restricts auction to
select buyers/advertisers
Resembles traditional direct
sales; differentiated by
automation of RFP, IO,
trafficking for publisher

15. PROGRAMMATIC
RTB
PROGRAMMATIC RTB IN LUMASCAPE
15

16. • Traders (trading desks): the people
• Demand Side Platform (DSP): trading desk tool
• Data Management Platform (DMP): data
• Supply Side Platform: publisher tool
COMPONENTS OF PROGRAMMATIC RTB
16

17. 2. Publisher
reaches out to SSP
to sell inventory
DMP
3. SSP sends
bid request with
audience data
(DMP) to DSPsPublisher
Traders Advertisers
$2.00 CPM
$1.50 CPM
5. SSP chooses
winner; advertiser
pays $0.01 more
than competitor
$1.00 CPM
4. Traders send bids to
show ad for audience
(DMP) to DSP
Winner
$1.51 CPM
Programmatic
Programmatic
SSP
1. User lands on
publisher site
PROGRAMMATIC RTB FLOW
DMP
DSP
DMP
DSP
DMP
DSP

18. • The people (RTB buyers)
• An organization that manages programmatic
media typically using DSPs and other audience
buying technologies
– Place ads based on target audience
– Manage bids, placements, and targets
TRADERS
18

19. • Trading initially very complicated, requiring
specialized expertise from traders
• Technology has evolved, making
programmatic buying more intuitive
• New technology empowers agencies and
brands to take back control of
programmatic buys with in-house traders or
search teams
EVOLUTION OF TRADERS
19

20. • Tool for trading desk (advertiser)
• A piece of software used by traders (advertisers) to buy advertising
placements with real-time bids
• Benefit of DSP for Advertisers
– Central access to publishers, networks, exchanges, SSPs
– Targeting/control options
– Robust reporting
– Automated optimizers (targeting/ads)
– Brand protection (white list, content, viewability)
DEMAND SIDE PLATFORM (DSP)
20

21. Targeting Control
Audience
• Demographic
• Interests/Behavior
Ø First Party
Ø Third Party
• Geography
Site
• List
• Category
• Content
• Budget
• Bids
• Day Part
• Frequency
• Brand Protection
21
DSP LEVERS

22. • Data for both advertisers and publishers
• A data warehouse that houses information and spits
it out in a way that’s useful for marketers and
publishers
• Benefit of DMP for Advertisers
– Data to develop and target specific targets
– Target specifications applied across large source
DATA MANAGEMENT PLATFORM (DMP)
22

23. • Tool for publishers
• A piece of software used by publishers to sell advertising in
an automated fashion
• Benefits of SSP for Publisher
– Access to advertisers, networks, ad exchanges, DSPs
– Automated yield management
– Robust reporting
– Block advertisers
– Price floors
SUPPLY SIDE PLATFORM (SSP)
23

24. • Companies cross lines
– Rubicon (SSP + Exchange): Advertising Automation Cloud
– AppNexus (DSP + SSP): Flexible Technology
– Google (DSP + Exchange + SSP): Internet Monopoly
• Issues
– Market confusion
– Who is more important? Advertiser or Publisher?
• Bottom Line for Advertisers: Does it work?
24
BLURRED LINES

25. TACTI CS AND
STRATEG IES

26. Prospecting
• Targeting ads using audience or site data
• Scale new customers
• Learn about audience
Retargeting
• Targeting ads based on users’ past site visitation
• Convert intent into sale
• Overlay prospecting strategies
26
TACTICS

27. Control Parameters (Campaign)
Budget: $1,000/day
Max CPM: $10
Frequency: 4/day
Brand Safety: No Sexual Content
Targeting Requirements
Geo: NY/NJ
Day Part: Weekends
Demographics < User Age < 36-45
Demographics < HHI $150k-250k
• Jewelry brand
• Goal: Drive qualified traffic and revenue
27
PROSPECTING EXAMPLE

28. 28
PROSPECTING TARGETS
Demographic
s
Social Media Users
Very Highly Engaged
Social Media Users
Very Highly Engaged
Social Media Users
Very Highly Engaged
Interest
Fashion and Style Attitudes:
Timeless fashion
Fashion and Style Attitudes:
Timeless fashion
Fashion and Style Attitudes:
Timeless fashion
In-Market
Women’s Fashion and Apparel
Fine Jewelry
Apparel & Accessories
Luxury Retailers
Clothing & Accessories
Luxury Accessories
Target 1 Target 2 Target 3

29. Target 1:
Fine Jewelry
Target 2:
Luxury Retailers
Target 3:
Luxury Accessories
Low CPA
Low Cost
High Volume
High CPA
High Cost
High Volume
Low CPA
Low Cost
Low Volume
Metrics Optimization
Increase daily budget
Pause
Increase CPM or frequency
Test without ‘Timeless Fashion’
29
PROSPECTING OPTIMIZATION

30. NEED PRODUCT DATA 30
RETARGETING STRATEGIES
iPad Page
(no purchase)
Retarget with
iPad Ads
General
Sequential
Messaging
Last Page Visited Search
Apple Page
(no purchase)
Retarget with
iPad Ads
Second Ad:
iPad Sizes (DR)
First Ad:
Lifestyle Ad (TV)
Upsell
Search for
‘tablet’
Retarget with
iPad Ads
Bought
iPad
Retarget with
iPad Cases

31. PROGR AMMATIC
VIS ION

32. The majority of media will be bought programmatically through self-
service platforms, which makes media buying more transparent,
flexible, and efficient. But this technology requires a new type of
media professional. With insight into this evolution, The Media Kitchen
has developed the Programmatic Media Team.
The Programmatic Media Team will oversee 3 major areas:
• Programmatic RTB (includes banners, video, and mobile)
• Programmatic Direct (includes banners, video, and mobile)
• Paid Search (e.g. Google and Bing)
• Paid Social Media (e.g. Facebook, Twitter, LinkedIn)
32
PROGRAMMATIC MEDIA TEAM

33. THA NK
YOU