Parsing the Mayhem: Developments in the Advertising Technology
Landscape May 3, 2010 Terence Kawaja GCA Savvian Advisors
Parsing the Ad Tech Value Chain ANALYTICS INVENTORY INVENTORY
Media SUPPLY AGGREGATION Where? DATA DATA AUDIENCE DATA MEDIA
Audience SUPPLY AGGREGATION SEGMENTATION OPTIMIZATION BUYING Who?
CREATIVE CREATIVE Creative ORIGINATION OPTIMIZATION What?
ANALYTICS
Display Advertising Technology Landscape Agencies Media Buying
Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools
Horizontal Trading Desk A P D U A Video / Rich Media Yield V
Optimization B U E L D R Vertical I I T E S I N Targeted Publisher
H C S Creative Data Data Exchanges / Tools E E Optimization
Optimization E Aggregators R R Performance S S Ad Servers Ad
Servers Analytics Verification / Mobile Data Suppliers Attribution
Ad Ops / Infrastructure Please direct any inquiries or comments on
the landscape to Terence Kawaja at [email protected] or (212)
999-7082
Lets Not Forget About the Principals
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data DSPs Platforms Exchanges / Social Tools 1. Overcrowded
Marketplace Horizontal Trading Desk A P D U A Video / Rich Media
Yield V ries Optimization B U ego E L D R cat Vertical I I T 24 S E
ies N pan I H Targeted Publisher C om S Data Tools E ted Creative
Data E 2c Exchanges / Optimization Optimization E Aggregators ves R
19 n in R Performance S illio S Ad Servers $2 .5 b Ad Servers
Analytics Verification / Mobile Data Suppliers Attribution Ad Ops /
Infrastructure Please direct any inquiries or comments on the
landscape to Terence Kawaja at [email protected] or (212)
999-7082
Ad Stack - Circa 2000 Ad Operations Agency Ad Server
Ad Stack - Circa 2005 Analytics Ad Operations Ad Network Agency
Ad Server
Ad Stack - Circa 2010 DSP Analytics Verification Ad Ad
Operations Exchange Data Ad Optimization Network Creative
Optimization Yield Optimization Data Aggregator Agency Ad
Server
Display Advertising Technology Landscape Agencies Media Buying
Ad Ad Networks Sharing Data DSPs Platforms Exchanges / Social Tools
Horizontal Trading Desk A P D U A Video / Rich Media Yield V
Optimization B U E L D R I I T $8 B Vertical E I i llion S N
Targeted Publisher H C S Creative Data Data Exchanges / Tools E E
Optimization Optimization E Aggregators R R Performance S S Ad
Servers Ad Servers Analytics Verification / Mobile Data Suppliers
Attribution Ad Ops / Infrastructure Please direct any inquiries or
comments on the landscape to Terence Kawaja at
[email protected] or (212) 999-7082
Search Advertising Technology Landscape SEM Agencies SEM SEO
Providers / Tools Search Engines Agencies Tools A P D U A V B U E L
D R $17 I I T I Billi S E N S E on Data Optimization Data Exchanges
/ Performance H E R C E R Aggregators S S Analytics Verification
Data Suppliers Mobile
Television Advertising Technology Landscape Agencies A TV Ad
Brokers P D U A V B U E L D R I I T E S N I H C S E E E R R S
S
Sizing the Market Opportunity (Fun With Math) 2010 2014 Total
Online Display Ad Sales $ 8,000 $ 16,000 % Audi ence Targeted 13%
50% Audience Targeted Ad Sales 1,000 8,000 % Media Bought on DSP
Platform 20% 50% DSP-based Audience Targeted Ad Sales 200 4,000 %
Fees to Demand-Side Intermediary 15% 10% DSP Net Revenue 30 400
Over $400 million has been raised by demand-side intermediaries
alone; over $2.5 billion on the entire landscape Illustrative
analysis only
Carving Up the Stack - Network World $5.00 CPM $5.00 ($0.50)
$4.00 $3.00 (C PM) ($2.00) $2.00 ($0.25) $1.80 CPM ($0.35) ($0.10)
$1.00 $0.00 Advertisers Agency Ad Network Data Provider Ad Exchange
Ad Serving / Publisher Rich Media
Carving Up the Stack - DSP / Exchange World $5.00 CPM $5.00
Efficiency from Optimized Media Buying $4.20 CPM ($0.50) $4.00
($0.40) ($0.50) $3.00 (CPM) (C PM) ($0.75) $2.15 CPM ($2.00)
($0.30) $2.00 ($0.25) ($0.10) $1.80 CPM ($0.35) ($0.10) $1.00 $0.00
Advertiser Advertisers Agency Ad DSP Network Data Provider Ad
Exchange Ad Exchange Ad Serving / Serving Publisher Rich Media Rich
Media
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data DSPs DSPs Platforms Exchanges / Social Tools
Horizontal 1. Overcrowded Marketplace Trading Desk 2. Demand side
capabilities likely A P D to amalgamate Yield U A Video / Rich
Media V Optimization B U E L D R Vertical I I T E S I N Targeted
Publisher H C S Creative Data Data Exchanges / Tools E E
Optimization Optimization E Aggregators R R Performance S S Ad
Servers Ad Servers Analytics Verification / Mobile Data Suppliers
Attribution Ad Ops / Infrastructure Please direct any inquiries or
comments on the landscape to Terence Kawaja at
[email protected] or (212) 999-7082
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data DSPs Platforms Exchanges / Social Tools Horizontal 1.
Overcrowded Marketplace Trading Desk 2. Demand Side Capabilities
likely to A P amalgamate D U V 3. Google is Video / Rich Media to
display in aB A coming Yield Optimization U E big way L D R
Vertical I I T E S I N Targeted Publisher H C S Creative Data Data
Exchanges / Tools E E Optimization Optimization E Aggregators R R
Performance S S Ad Servers Ad Servers Analytics Verification /
Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please
direct any inquiries or comments on the landscape to Terence Kawaja
at [email protected] or (212) 999-7082
Google is Well Positioned in Display Agencies Media Buying Ad
Ad Networks Sharing Data / DSPs Platforms Exchanges Social Tools
Horizontal A P D U A Video / Rich Media Yield V Optimization B U E
L D R Vertical I I T E S N I Targeted Publisher H C S Creative Data
Optimization Data Exchanges / Tools E E Optimization Aggregators E
R Performance R S S Ad Servers Ad Servers Analytics Verification /
Data Suppliers Mobile Attribution Ad Ops / Infrastructure
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data / DSPs Platforms Exchanges Social Tools 1. Overcrowded
Marketplace Horizontal Trading Desk 2. Demand Side Capabilities
likely to A P amalgamate D U A V 3. Google is coming to display in
a Video / Rich Media Yield Optimization B U E big way D L R I I 4.
Data becomes ubiquitous and Vertical E T commoditized S N I
Targeted Publisher H C S Creative Data Optimization Data Exchanges
/ Tools E E Optimization Aggregators E R Performance R S S Ad
Servers Ad Servers Analytics Verification / Data Suppliers Mobile
Attribution Ad Ops / Infrastructure
Exception: All Data is Not Created Equal Data Hierarchy Example
Companies Social Sharing Value Search Intent Click Stream Publisher
Cookie Segmentation
Exception: Proprietary Data Sets
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data / DSPs Platforms Exchanges Social Tools 1. Overcrowded
Marketplace Horizontal Trading Desk 2. Demand Side Capabilities
likely to A P amalgamate D U A V 3. Google is coming to display in
a Video / Rich Media Yield Optimization B U E big way D L R I I 4.
Data becomes ubiquitous and Vertical E T commoditized S N I
Targeted Publisher H C S Data 5. Life gets tougher for agencies
Data Tools E Creative Optimization Optimization Exchanges /
Aggregators E E R Performance R S S Ad Servers Ad Servers Analytics
Verification / Data Suppliers Mobile Attribution Ad Ops /
Infrastructure
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data DSPs Platforms Exchanges / Social Tools 1. Overcrowded
Marketplace Horizontal Trading Desk 2. Demand Side Capabilities
likely to A P amalgamate D U V 3. Google is Video / Rich Media to
display in a A coming Yield Optimization B U E big way L D R I I 4.
Data becomes ubiquitous and Vertical E T S commoditized N I H
Targeted Publisher C S 5. Data / gets tougher for Agencies E Life
Tools Creative Optimization Data Optimization Exchanges E E
Aggregators R R 6. Publishers Performance to leverage data need S S
for their benefit Ad Servers Ad Servers Analytics Verification /
Mobile Data Suppliers Attribution Ad Ops / Infrastructure Please
direct any inquiries or comments on the landscape to Terence Kawaja
at [email protected] or (212) 999-7082
SSP = Sell Side Platform Ad Networks Sharing Data / Horizontal
Social Tools P Video / Rich Media Yield U A Optimization B U L D
Vertical I I E Publishers can make data S N work for them Targeted
Publisher H C Tools Sell it raw E E Brand it Performance R Target
better (higher CPMs) S Ad Servers Mobile Ad Ops /
Infrastructure
Landscape Observations Agencies Media Buying Ad Ad Networks
Sharing Data DSPs Platforms Exchanges / Social Tools 1. Overcrowded
Marketplace Horizontal Trading Desk 2. Demand Side Capabilities
likely to A P amalgamate D U V 3. Google is Video / Rich Media to
display in a A coming Yield Optimization B U E big way L D R I I 4.
Data becomes ubiquitous and Vertical E T S commoditized N I H
Targeted Publisher C S 5. Data / gets tougher for Agencies E Life
Tools Creative Optimization Data Optimization Exchanges E E
Aggregators R R 6. Publishers Performance to leverage data need S S
for their benefit 7. Consolidation likely from Servers Ad several
Ad Servers Verification / buyer groupsMobile Analytics Data
Suppliers Attribution Ad Ops / Infrastructure Please direct any
inquiries or comments on the landscape to Terence Kawaja at
[email protected] or (212) 999-7082
Diverse Strategic Interest in Ad Tech Innovators Agency
Marketing Targets Technology Network / Data Ad Networks
Strategic Ad Tech Investment Activity to Date Over $13 billion
of investment activity from all potential buyer groups =
Acquisition = Investment
Diverse Strategic Interest in Demand-Side Ad Tech Strategic Fit
Ability / Willingness to Pay
Consolidation Will Likely Come in Waves
The First Deal Will Likely Trigger the Initial Wave
The Ad Tech Optimization Scorecard Advertisers Publishers
Agencies Ad Networks DSPs Data Providers Data Aggregators
Wall Street and Madison Ave; Separated at Birth? Name Named
after a street in Manhattan Unit Standardized, high volume Buyers
Looking for a good ROI Sellers Looking for the highest price Agent
Intermediaries Handful of global firms in New York, Europe Rating
Agencies Provide independent third party measurement Distribution
Channels Partner sales channel which aggregates demand Auction
Marketplaces Exchanges facilitate the trading of units
GCA Savvians Digital Media Advisory Business Deep Industry
Knowledge Think Like Principals Offer Trusted Advice to Clients
Terence Kawaja Managing Director +1 212.999.7082
[email protected] TOKYO SAN FRANCISCO CHICAGO NEW YORK LONDON
Leading investment banking firm with over 200 professionals
worldwide Services include advice on mergers and acquisitions,
private capital finance and restructurings Advised on over $60
billion in transactions since 2006 Advisor to media companies new
and old
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