New York Media Credit Group

March 2017

Hello my name is:

Patrick Dolan

Executive Vice President, Chief Operating Officer, IAB

Advance Open Water Diver

Say hi on Twitter -@patrickdolan@iab

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We Are Digital Media’s Biggest Tent

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650+ LEADING MEDIA COMPANIES RESPONSIBLE FOR SELLING 86% OF U.S. DIGITAL ADVERTISING

What we do

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Public PolicyDevelop Technical

Standards

..as well as Events

Industry Research

Education

2017 IAB Events

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Certification, Training, and Development

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Established benchmarks for digital advertising knowledge across your organization and programs for improvement in sales and operational effectiveness

CERTIFICATIONS +10,000 PARTICIPANTS IN 40 COUNTRIES

TRAINING AND PROFESSIONAL DEVELOPMENT

IAB and Our Partners

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LEADERSHIPIAB Board

IAB Mobile Marketing Center of Excellence

IAB Digital Video Center of Excellence

IAB Data Center of Excellence

PARTNERS

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Digital Advertising Supply Chain

Digital Advertising Supply Chain

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Digital Advertising Supply Chain

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Programmatic

Programmatic Advertising

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It’s Not New, Just Evolution

Search – Since the early 2000’s, search has been transacted in bid based automated environment

Display, Video, Mobile – More recently programmatic has offered new flavors – shifting away from traditional ad networks - making bid based automated buying of display, video and mobile more desirable for brands

Social – Over time, social has shifted to sPMD (ie, SocialCode) bid-based automated environments

Native, OOH, Radio, TV – although not originally part of the digital media ecosystem, digitization of traditional channels is opening up this advertising space to the same automated tools

Programmatic = Efficiency + Efficacy

TargetingMaximize accuracy in reaching users with

minimal waste

SegmentationIdentify different user types

and speak to them differently

StreamliningUse technology to manage

And refine relationships

ScaleReach users at volume,

Across the web

AutomationBuy and optimize campaigns effectively at

scale

Popular Use Case: Retargeting

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Popular Use Case: Tailored message

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Why it is important – Programmatic is the New Normal

• 2015 is the first year that the majority of digital investment ($15.8B, 59%*) is estimated to be programmatic

• Growth is undoubtedly being driven by mobile and video investments

• In 2014, 70% was Open Exchange / 30% PMP

• 75% of spend is with the top 10 publishers

• … BUT we’re still in our infancy

*Excludes search, lead gen, and classifieds

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Digital Trends

20 Years of Tracking Internet Ad RevenueIn

bil

lion

s

’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14’96 ’97

First Internet Ad Revenue

Report

1996 1997 1998 2005 2006 2007 2008 2009 2010 20112000 2001 2002 2003 2004

Mobile Subformats

AddedMobile Added

1996$267M

Video Added

Formats Added to Report: Banners,

Sponsorships, Interstitials, Email, Other

Social Media Added

Quarterly Internet Ad Revenue Growth Trends, in Billions 1996–2015

1999

Search Added

Rich Media, Lead Gen& Classifieds

Added

2012 2013 20142015

2016$59.6B

19IAB 2015 Full Year and Q4 2015 Internet Advertising Revenue Report

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First Half 2016 Year-Over-Year Ad Revenue Growth

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$ Bi

llions

*Source: The Nielsen Company, MonitorPlus (Standard Calendar, Total includes B2B, National Internet (Display only), FSI Coupons), Oct. 2016

Total Media Ad Revenue Growth

(HY 2015 vs. HY 2016)

The Nielsen Company estimates total media revenues for HY 2016 decreased by -2% from HY’15 to $57.9B*

$27.5

$32.7

$0

$5

$10

$15

$20

$25

$30

$35

HY 2015 HY 2016

Digital Ad Revenue Growth (HY 2015 vs. HY 2016)

19%

Highlights: Mobile Surges to Nearly Half All Revenue… Video and Social Also Up

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Mobile ad revenue, up 89% to $15.5 billion, now accounts for nearly half (47%) of internet ad revenue for the first half of 2016Total video ad revenue (mobile + desktop) is up 51% to $3.9 billionTotal social media revenue (mobile + desktop), across all formats and platforms, is up 57% to $7 billion, growing by over 50% every half year since 2012

IAB First Half Year 2016 and Q2 2016 Internet Advertising Revenue Report

$27.5 $32.7Internet

First Half 2016 Ad Revenue Growth: Digital vs. Top Non-Digital Media

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Total Ad Revenue First Half 2015 vs. First Half 2016 ($ Billions)

$7.3

$2.9

$4.9

$12.6

$27.1

$6.9

$3.0

$4.4

$13.0

$27.0

Magazine

Radio

Newspaper

Cable TV

Broadcast TV

First Half 2016

First Half 2015

PercentYoY Change

19%

-1%

4%

-10%

3%

-5%Note: The total US advertising market includes other segments not charted here. Broadcast TV includes Network, Syndicated, Spot, and Spanish Language Network TV advertising revenue. Cable TV includes National Cable Networks, Local Cable, and Spanish Language Cable TV advertising revenue. Radio includes Network, and Spot Radio advertising revenue. Newspaper includes Local, National, and Sunday Supplement. Magazine includes Local and National.

*

Source: Nielsen HY 2016, Oct. 2016 *Source: IAB Q2 and First Half Year 2016 Internet Advertising Revenue Report

Industry Challenges

2017 Trend: Cross Channel - Data Driven - Programmatic

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Attribution – Who gets the credit?

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Cross Channel Attribution – increased complexity

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Consumer Privacy – The Ad Choices Program

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Fraud

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Opportunity $8.2 Billion*

* IAB EY Study “What Is An Untrustworthy Supply Chain Costing the Digital Advertising Industry?” Dec 2015

Ad Blocking – the LEAN DEAL

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23%

19%

18%

14%

8%

6%

5%

Video ads (not in a video player) that automaticallystart playing somewhere on the page

Large, high quality ads that take over the screen temporarily

Blinking ads

Targeted ads that are relevant to yourbrowsing habits (ads that 'follow' you from site to site)

Video ads in a video player

Many small ads that are in the usual places on a page

Low quality ads (cheap looking)

Type of Ad that Motivates Ad Blocking Usage

AutoStart Rich Media Ads

Takeover Ads

Blinking Ads

Intrusive Ads

Standardized Ads

Creepy Ads

Measurement

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Wind At Our Backs - Marc Prichard from P&G

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Thank You

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patrick@iab.com@patrickdolan