How Big Data is Reshaping the Digital Advertising Industry An Entravision Company TDWI EXECUTIVE SUMMIT 2015 How Big Data is Reshaping the Digital Advertising Industry Oscar E. Padilla Senior Vice President, Digital Media & Insights September 23, 2015 © 2015 Pulpo is a fully owned Entravision company

Key areas we’ll cover today Who we are State of the digital advertising industry The ad tech ecosystm Programmatic 101 and key trends The role of data in programmatic advertising Automotive industry case study Closing remarks

Who is Pulpo: Uniquely positioned to serve the Hispanic market. 140M Individual consumers 30M Hispanic Individuals 8B Transactional records 30TBs Monthly Data Refresh1 1,800 Data Sources 200+ Data Attributes True Hadoop Platform The only holistic ad network that reaches Hispanics across acculturation levels and digital devices. Exclusively focused on (i)Hispanics Data–driven platform (i)Hispanic acculturation model #1 comScore–ranked digital platform for delivering and reaching the (i)Hispanic market. 56 TV Stations 49 Radio Stations 76 Station Websites 300 Radio Network Stations 2M Monthly Mobile Connections 641K Social Media Connections 100+ Local Events

So How did we evolve into a media and Insights company? We brought together two core business units that compliment and help deliver a holistic ad experience PRECISE ONLINE TARGETING Leverage in-depth & actionable consumer insights, and hyper-targeted segmentation, based on acculturation, to improve ROI BEHAVIORAL INSIGHTS Leverage transactional data to improve KPIs, derive business value, and accelerate growth by uncovering new business opportunities DATA DRIVEN INSIGHTS

U.S. Total Media Ad spending by media ($billions) Source: eMarketer, Sept 2015

US Digital ad Market is projected to reach nearly $100Bil. By 2019 US Digital AD Spending, 2014-2019 ($Bil.) % Change and % of total media ad spending

Hispanic Targeted Ad Spend Increased by 63% since 2010 Over the past five years, the top 500 advertisers boosted their spending in Hispanic targeted media by 63% or $2.7 billion from $4.3 billion in 2010 to $7.1 billion in 2014 US Hispanic media ad spending increased 12.0% in 2014 Expenditure on digital formats, network TV and cable TV is driving growth The top 500 US marketers increased their share of US Hispanic advertising to 8.4% in 2014 from 5.5% in 2010

Digital Display Ecosystem 101 At its very core, the ad tech world is very simply. It’s comprised of a two party partnership between Advertisers (buyer) and Publishers (sellers) Two Party Partnership Advertiser (Buyer) Publisher (Seller)

Understand Demand Side and Supply side PLayers Publishers Audience Ad Networks Publishers Audience Agencies & Media Buyers Publishers Audience Advertisers / Customers Demand Side Platform Real-Time Bidding (RTB) Publishers Audience Data Mgmt. Platform (DMP) Third-Party Data Supplier Ad Networks Publishers Audience Demand side (DSP) Buyer Supply side (SSP) Seller

‪IAB: The Evolution of Online Display Advertising: ‬

Demand Side Platforms = Programmatic With programmatic advertising, brands and agencies can buy ad inventory in an automated way. You can anonymously target individuals with ads that are relevant to their needs and interests, regardless of the website the ads are shown on. This practice of mining data to serve more relevant ads in an automated way is called programmatic advertising.

What is Programmatic? It’s the Automation of Buying and Selling Advertising Using Technology Programmatic approaches have primarily been deployed in scale in digital media while TV and Radio are still at the early stages, and rapidly growing Media Programmatic Tools to trade media using business logic to buy inventory. Vendor aggregates inventory from multiple sources. Programmatic & Real Time Bidding Real-Time-Bidding is a method of buy/selling in real-time. This approach in programmatic broadcast is still at its early stages Data Programmatic Data is used to hyper-target audience. Targeting is based on behavioral targeting through either first-party or third party sources

Why is programmatic so important to advertisers? Source: Forrester Research 2014

Less than One-Quarter of Marketers “Get it” Pick the statement which best describes your level of understanding of programmatic buying I understand it and use it to execute campaigns 23% Source: AOL Platforms, “7 Things You Need to Know About Programmatic Right Now. August 2014

1900 2000 2014 Traditional Digital Data Driven Marketing Complexity 1900 2000 2014 Traditional Digital Data Driven Print, Catalog, Direct Mail, Radio, TV, Telemarketing Email, Website, Search, Display, Affiliates, Video, Mobile, Social Addressable TV, Cross-Device, Personalization, Programmatic Data is critical in supporting programmatic initiatives; it drives personalization, targeting and achieving more precise and relevant targeting.

Data “onboarding” Overview It’s the process of matching offline data with an online data source and creating a targetable cookie pool

How the process works Source: LiveRamp data onboarding process

Finding an anonymous record match online Source: LiveRamp data onboarding process

Automotive Business Use Case Leveraging first-party data to develop lookalike models

Automotive online advertising is projected to grow to over $12 billion by 2019 U.S. Automotive Industry Digital Ad Spending 2013-2019 ($ Billions) $7.8 billion Source: eMarketer, March 2015

Display and video advertising are the most effective digital tools for shaping purchase decisions Online ad platforms that most influence automotive purchase decisions of US internet users (% respondents) Source: Television Bureau of Advertising and the Fugures Company Q3 2014

But precisely targeting audiences that matter most continues to be a challenge

Client First Party Data Luminar Consumer Behavior Data Approach: develop look-alike models based on best customer and through data enrichment Client First Party Data Luminar Consumer Behavior Data How we do it: Luminar integrated client first party data with Luminar’s transactional data to enrich client guest file, identify known Hispanics, and build a richer behavioral consumer profile.

Building high-value prospect from media conversion data We leverage client’s media conversion data to generate greater consumer intelligence and deliver robust targeting solutions for both online and offline channels 1 Ingest Customer Frist Party Data * 2 Luminar Data Enrichment 3 Custom Modeling 4 Identify High-Value Prospects Ingest conversion data from digital campaigns and other past campaign conversion data assets 140 Million Households 30+ Millions Hispanics 1,200 Data Sources Formulate appropriate models based on your needs Score Luminar data sources with custom client models Customized Audience Reach High Value Prospects After Scoring Propensity media output can be over layered with Pulpo for precise targeting online CPM reach program Drive audience either through dedicated landing page or Automotive main page Pulpo delivers audience media reach Integrate Chevy’s automotive KPI objectives

Data Matching three-step process 1 2 3 SECURE UPLOAD MATCHING DISTRIBUTION Custome r Records Online Devices PII Removed Securely uploaded enriched data set ready for modeling Anonymous matching of segmented data Data activated for use in marketing applications

Results We leveraged customer data as first party data to develop appropriate models Ingesting conversion data and modeled offline providing a scalable approach to build a more robust predictive analysis, then onboard the final prospect list Keep in mind that the average anonymous cookie has fewer than 25 different pieces of targeting data associated with their profile The predictive models helped find new prospect to target online who were in the path to purchase but not yet in market We were able to produce “custom audiences” of customers to target across channels and devices

Five Key Take aways… By the end of 2015, programmatic will account for 55% of all U.S. digital display ads ($14.8Bil.) 1 Demystifying the programmatic landscape is critical to reach its full potential, only a small percentage of marketers fully understand programmatic advertising 2 Data is essential to a programmatic strategy 3 Marketers are turning to their first-party data to drive the greatest value (i.e. CRM, transactional data) 4 5 Programmatic is beginning rapidly propagate outside digital and into non-digital media (TV, Radio)

Thank you! Oscar Padilla, Pulpo Senior VP Marketing, Digital Media & Insights opadilla@luminarinsights.com