1030 omma display joanna o connell
TRANSCRIPT
© 2011 Forrester Research, Inc. Reproduction Prohibited1
© 2011 Forrester Research, Inc. Reproduction Prohibited2 © 2009 Forrester Research, Inc. Reproduction Prohibited
The Future of Digital Media Buying
Joanna O’Connell, Senior Analyst
November 7, 2011
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It’s more than an evolution in media buying. It must be a revolution.
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• Small handful of sites to choose from
• Manual, site level negotiation, management, optimization, and reporting
• Focus on content-based buying as a proxy to reach desired audience
• Thousands of sites to choose from
• Manual site level buying and management continues but…
• …supplemental reach and efficiency found through ad networks
• Continued reliance on content as proxy for audience though remarketing is a sign of a changing tide
• Millions of sites to choose from
• Increased reliance on growing number of undifferentiated networks for reach and efficiency
• Lack of visibility and insight frustrates buyers and their clients
• Increase in audience targeting options; interest in audience buying grows
Mid-1990’s Early-2000’s Mid-2000’s
Digital media buyers have faced unprecedented change over the last 15 years
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Thank you, RMX & MediaMath, for opening my eyes
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• Opaque Pricing– undisclosed margins (differential between price paid to publisher and charged to buyer) leaving buyers in the dark as to “real” impression value
• Media bundling – impressions typically sold packaged in bundles of 1000, limiting buyer’s ability to pick and choose only desired impressions
• Lack of placement level transparency – site lists often provided, but no guarantee of placement on any given site, or site level reporting
• Black box optimization –optimization methods largely opaque to end buyer; little insight into what drove performance and why
• Price Transparency – auction based media pricing model increases impression-level price transparency
• Granularity– cherry picking impressions allows buyers to choose only those desired impressions and bid at the impression level, de-averaging pricing based on expected return
• Control – buyer can sit “in the driver’s seat”, making the buying decisions, pulling the optimization levers
• Insight – more transparent buying, optimization and reporting means deeper insights and the knowledge needed to make repeatable decisions
Exchanges and DSPs illuminated issues we didn’t even know existed
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Transparency
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Granularity
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Control
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Insight
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Buyers and sellers alike are trying to figure it all out
Data
Clien
t
Pu
blish
er
Ag
ency
Tradin
g D
esk
DS
Ps
Exchanges
Ad
Ne
two
rks
SS
Ps
Data Providers
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Entrenchment remains an issueThe three martini lunch model has a strong legacy
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And buyers have been taught to haggle on price
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The old skills don’t necessarily translate in this new world
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Change is painful and happens slowly
Media Partner Flight Placements CPM Monthly Spend Total Spend Total ImpressionsPublisher 1 Jan 1 - March 31 ROS 10.00$ 35,000.00$ 105,000.00$ 10,500,000 Publisher 2 Jan 1 - March 31 ROS 8.00$ 25,000.00$ 75,000.00$ 9,375,000 Publisher 3 Jan 1 - March 31 ROS 12.00$ 45,000.00$ 135,000.00$ 11,250,000 Ad Network 1 Jan 1 - March 31 RON 0.75$ 50,000.00$ 150,000.00$ 200,000,000 Ad Network 2 Jan 1 - March 31 RON 1.00$ 50,000.00$ 150,000.00$ 150,000,000 Ad Network 3 Jan 1 - March 31 RON 1.15$ 50,000.00$ 150,000.00$ 130,434,783 Ad Network 4 Jan 1 - March 31 RON 0.85$ 50,000.00$ 150,000.00$ 176,470,588 Ad Network 5 Jan 1 - March 31 RON 1.00$ 50,000.00$ 150,000.00$ 150,000,000 Ad Network 6 Jan 1 - March 31 RON 1.25$ 50,000.00$ 150,000.00$ 120,000,000 Ad Network 7 Jan 1 - March 31 RON 3.00$ 50,000.00$ 150,000.00$ 50,000,000 Ad Network 8 Jan 1 - March 31 RON 2.25$ 50,000.00$ 150,000.00$ 66,666,667 Ad Network 9 Jan 1 - March 31 RON 1.25$ 50,000.00$ 150,000.00$ 120,000,000 Ad Network 10 Jan 1 - March 31 RON 1.00$ 50,000.00$ 150,000.00$ 150,000,000 DSP Jan 1 - March 31 RON 0.75$ 50,000.00$ 150,000.00$ 200,000,000 Total 1,965,000.00$ 1,544,697,038
Overlap
Loss of Frequency Control
Waste
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In the long term, media buyers must specialize
Strategy
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Specialization, centralization, and data will rule
Cen
tralized M
edia B
uyin
g P
latform
1s
t and
3rd
Party D
ata
Real Time Biddable Supply Sources
Online Video
Mobile
Display
Search
Addressable TV
Data M
an
agem
ent an
d A
nalytics P
latform
Ind
epen
den
t Trad
ing
Desk
Clien
tIn
-ho
use Trad
ing
Desk
Publisher Direct
Publisher Direct
Publisher Direct
Bran
d
Exp
erience
Bu
yers
Pro
gram
matic
Bu
yers
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The best thing you can do is educate yourself
RTBDSP
SSP
Data Exchange
DMP
ATD
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And if you’re a client, understand how your money is being spent
Media Partner Flight Placements CPM Monthly Spend Total Spend Total ImpressionsPublisher 1 Jan 1 - March 31 ROS 10.00$ 35,000.00$ 105,000.00$ 10,500,000 Publisher 2 Jan 1 - March 31 ROS 8.00$ 25,000.00$ 75,000.00$ 9,375,000 Publisher 3 Jan 1 - March 31 ROS 12.00$ 45,000.00$ 135,000.00$ 11,250,000 Ad Network 1 Jan 1 - March 31 RON 0.75$ 50,000.00$ 150,000.00$ 200,000,000 Ad Network 2 Jan 1 - March 31 RON 1.00$ 50,000.00$ 150,000.00$ 150,000,000 Ad Network 3 Jan 1 - March 31 RON 1.15$ 50,000.00$ 150,000.00$ 130,434,783 Ad Network 4 Jan 1 - March 31 RON 0.85$ 50,000.00$ 150,000.00$ 176,470,588 Ad Network 5 Jan 1 - March 31 RON 1.00$ 50,000.00$ 150,000.00$ 150,000,000 Ad Network 6 Jan 1 - March 31 RON 1.25$ 50,000.00$ 150,000.00$ 120,000,000 Ad Network 7 Jan 1 - March 31 RON 3.00$ 50,000.00$ 150,000.00$ 50,000,000 Ad Network 8 Jan 1 - March 31 RON 2.25$ 50,000.00$ 150,000.00$ 66,666,667 Ad Network 9 Jan 1 - March 31 RON 1.25$ 50,000.00$ 150,000.00$ 120,000,000 Ad Network 10 Jan 1 - March 31 RON 1.00$ 50,000.00$ 150,000.00$ 150,000,000 DSP Jan 1 - March 31 RON 0.75$ 50,000.00$ 150,000.00$ 200,000,000 Total 1,965,000.00$ 1,544,697,038
?
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© 2009 Forrester Research, Inc. Reproduction Prohibited
Thank you
Joanna O’Connell+1 212.857.0718
www.forrester.com