1. programmatic ADVERTISING
April 6, 2017

2. What we’ll cover today
Demystifying programmatic advertising Avoiding pitfalls that will hurt your revenue and reputation Opportunities to grow your revenue

4. ‘Programmatic’ defined
Programmatic Advertising is the automation of advertising/media transactions. This typically involves machine-learning decisioning and both biddable and non-biddable inventory, but currently relies on human input to create rules for both the buy and sell side.
Some examples of programmatic:
Ad Networks
Search
Real Time Bidding
Automated Guaranteed

5. IN A FRACTION OF A SECOND....
PROGRAMMATIC PROCESS
Exchange Notifies Bidder
3. Advertisers place different bids based on what they appear the value of Visitor A to be.
Visitor Enters Website
2. Advertisers given visitor details, publisher site and ad unit info
1. Visitor A accesses site, server requests an ad from the ad exchange
$11.00 Bid
Advertiser A
Ad Exchange
Real-Time Bidding
$10.50 Bid
Advertiser B
Visitor Sees Ad
5. Visitor sees creative and an impressions is counted
$10.00 Bid
Advertiser C
4. Ad Exchange selects the highest bidder and sends creative to the publisher

6. Programmatic explained
Reservation Buying
Ads sold directly between advertisers/agencies and publishers manually
Ad Networks
Ad networks aggregated inventory and sold it to advertisers. Helped publishers by selling inventory they could not sell themselves.
Ad Exchanges & SSPs
Real-time marketplaces with a large pools of liquid inventory not sold in direct buys; SSP’s have more controls for publishers to optimize yield
Indirect/Programmatic/
Unreserved
DSPs
Bidding technology designed to help advertisers/agencies target and optimize their buys across multiple ad exchanges/publisher inventory pools
Private Exchanges & Automated Guaranteed
Exclusive advertiser-to- publisher inventory relationships for programmatic purchasing in brand safe environments
Programmatic Premium
Now
Then
Direct Sold/ Guaranteed/Reserved

7. prioritization in the ad server
a.k.a. “The Waterfall”
Typical Publisher
High CPM and yield
Direct Demand
Non Standard
Sponsorship
Custom Executions
PREMIUM
DIRECT
PREMIUM
DIRECT
Context Targeting
Audience Targeting
ROS & RON
High Volume
Guaranteed Delivery
STANDARD
DIRECT
PREMIUM PROGRAMMATIC
Prioritized remnant
Repackaged media
Audience Extension
PMP
PREMIUM PROGRAMMATIC
STANDARD
DIRECT
SSP
Ad Nets
Undifferentiated media
Demand-Supply imbalance
OPEN
PROGRAMATIC
OPEN
PROGRAMATIC

8. why is RTB growing so fast?
From past to present
Execution Transparency
Cheap Media
High liquidity
High ROI on Direct Response
Scale
Data Collection
Transparency
Access to premium inventory
Contextual Relevance
Operational + Media efficiencies
Flexibility in planning
1st party data access
Yield Management
Revenue for unsold media
Sales Channel Conflict
Premium Environments
Control
Operational Efficiency
Higher Yield
1st Party Data Usage
Buyers
CHIP
In the past there was a mismatch in usage and expectations
Progression from cheap media to targeting at scale, transparency, operational efficiencies, etc
Now, with more buyers thinking about programmatic premium/PMP, much more alignment
Sellers
Past
Present

9. programmatic ad using third party data
Targeted based on Audience Data to a golfer, on Bloomberg.com

10. Benefits/Challenges of programmatic For advertisers
The top benefits of programmatic buying are:
Better targeting
Real-time optimization
Meanwhile, the top challenges are higher bot fraud and potential for non- viewable ads. Transparency issues also are identified as challenges:
Lack of transparency to the costs within the programmatic supply chain, i.e., only $.30 to $.40 of every dollar actually buys media
Lack of transparency into the firms along the programmatic supply chain, i.e., not knowing all the firms that are touching my business

11. Programmatic demystified
Advertisers want more control over which ad impressions to buy The market has shifted from buying all impressions on your website to buying those individual impressions that fit their needs They are using first party and third party data to better understand who is loading a web page

12. MARKETPLACE/EXCHANGES
actors & acronyms
What role each plays in the open auction ecosystem
DSP
MARKETPLACE/EXCHANGES
SSP
AGENCY TRADING DESK
PUBLISHER AD SERVER
ADVERTISER / AGENCY
PUBLISHER
LAUREN
What role each plays in the ecosystem
Differences for each (adnets, DSP’s, ATD’s, SSP’s, Exchanges, DMP’s)
Positives and negatives in their business models
Solutions grew before problems formalized, but those options can be simplified
SERVICES
SERVICES
DMP
DMP

13. Header bidding
Header bidding allows publishers to receive bids from every partner simultaneously so the impression is always awarded to the highest bidder Header bidding increases ad revenue significantly, requires less ongoing maintenance, facilitates more accurate reporting and results in fewer discrepancies Another great aspect of header bidding? It’s low maintenance. While a traditional waterfall setup requires near-constant attention, header bidding allows for a “set it and forget it” approach In most cases, publishers traffic their line items once and then simply monitor performance

14. you can sell inventory you don’t own
Your Site
10,000
Impressions

15. Successful Partnerships
Trust
Intentions
Collaboration
Transparency
Deal Points
Business
Auction
Desire for Mutual Success
Understand the other side
Outcomes
no difference in our business from the past, except that majority of pmp deals will fail  (as defined by deal scale) without full transparency

16. Deals Done Right for Programmatic
Standard Discussion
Strategy 
Objective & Measurements of success
Daily desired spend
Price
Advanced Discussion
Campaign parameters
Unit winning price and/or closing price
Preferred context
Publisher Set up
Creative type & vendor
Reporting requirements
“The power sits neither with the buyer or the seller; it rests in the effectiveness of the deal because both parties are equally responsible for its success”
Not one way to do it right
Be prepared to get wide and deep since both are critical for proper set up
Deal validation, checklist, reco’s
Strategy – how are you using programmatic as part of your plan?
Our biz is full of problem solvers – share what you can and can’t do and you might be surprised by solutions that come back
Advanced - 14 pt checklist
Responsibility for all to educate initiates that programmatic does not mean low price – it means campaign effectiveness
Campaign parameters (fcaps, pixels, data overlays)

17. Terminology: the painful stuff
RTB
Real Time Bidding –the technology that allows the selling and buying of inventory one impression at a time, i.e. Biddable Inventory
Machine Learning
The use of algorithms leveraging large quantities of data to maximize efficiency and/or improve effectiveness of a desired outcome
Ad Exchange
Transparent real-time marketplace where large pools of inventory are bought and sold. Now uses RTB to transact
DSP
Demand Side Platform - Technology company that powers RTB buying for advertisers and agencies. Leverages buy side decisioning
SSP
Supply Side Platform - Technology platform that powers RTB selling for publishers. AKA a ‘publisher biased exchange’.
PMP
Strategy to create a premium channel using RTB to execute direct buys, aka Private Exchange. Uses Deal ID technology
Automated Guaranteed
Workflow automation and execution channel for direct sold reserved inventory. AKA Programmatic Guaranteed
Bid Request/
Bid Response
Action in auction where SSP solicits all requests for bids, and DSPs respond with bids, one impression at a time

18. Terminology 201: the pro stuff
Floor/Fixed
Price
Floor is the lowest price an advertiser will pay in a second price auction. Fixed price establishes a maximum. Mutually exclusive
Bid Response Rate
The rate at which a DSP responds to bid requests with >$0 bid responses
Bid Price
The first or fixed price bid that represents the maximum amount a buyer will pay for the impression
Win & Clear Prices
Win is the first price, clear is the ‘pay’ price to the media owner (in a second price auction). With fixed price, these are the same
Win %
The rate at which a buyer’s bids are awarded an impression
Bid Metrics
All the above together are called Bid Metrics. Use bid metrics to study the auction for deal improvement or incremental yield
Header Bidding
An approach to auction management that allows simultaneous bids from more demand sources into the ad server for pub side decisioning