1. business and industrial
2. advertising and marketing
3. advertising

INDUSTRY REPORT
Real-time Bidding:
The Online Ad Exchange
Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Attribution
Executive Editor: Tricia Parks
Editor: Harry Wang
Authored by Heather Way
Published by Parks Associates
© July 2012 Parks Associates
Dallas, Texas 75248
All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in
writing from the publisher.
Printed in the United States of America
Disclaimer
Parks Associates has made every reasonable effort to ensure that all information in this report is correct. We
assume no responsibility for any inadvertent errors.
Quality Review
Analyst
HW
6.13.12
EE
Wang
6.30
EE
TP
7.8
Attribution
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Real-time Bidding: The Online Ad Exchange
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Table of Contents
Attribution ................................................................................................................................................................... i
Disclaimer .................................................................................................................................................................... i
Table of Contents ....................................................................................................................................................... 2
List of Figures .............................................................................................................................................................. 3
The Bottom Line ......................................................................................................................................................... 4
Data Points ................................................................................................................................................................. 5
1.0
Report Summary............................................................................................................................................ 6
1.1
Purpose of Report ...................................................................................................................................... 6
1.2
Scope of Report .......................................................................................................................................... 6
1.3
Research Approach .................................................................................................................................... 7
1.3.1
Data Sources ......................................................................................................................................... 7
1.3.2
Glossary of Terms ................................................................................................................................. 8
1.4
Defining Real-Time Bidding (RTB) ............................................................................................................ 10
2.0
The Buy-side ................................................................................................................................................ 16
2.1
Media Buying Desks (MBDs) .................................................................................................................... 16
2.2
Demand-side Platforms (DSPs) ................................................................................................................ 19
2.3
Data Management Platforms (DMPs) ...................................................................................................... 22
3.0
The Sell-side................................................................................................................................................. 25
3.1
Supply-side Platforms (SSPs) .................................................................................................................... 25
4.0
Online Buying/Selling Intermediaries .......................................................................................................... 28
4.1
RTB Ad Exchanges .................................................................................................................................... 28
4.2
Ad Networks ............................................................................................................................................. 32
4.3
Ad Monitoring and Verification Services ................................................................................................. 34
5.0
Real-time Bidding Online Advertising Revenue Forecasts in North America (N.A.) 2012 – 2017............... 35
5.1
Forecast Methodology ............................................................................................................................. 35
5.2
Forecast Assumptions .............................................................................................................................. 35
6.0
Market Implications & Recommendations.................................................................................................. 39
Resource Book ...................................................................................................................................................... A-43
Appendix A
Company Profiles: Media buying desks...................................................................................... A-43
Appendix B
Company Profiles: Demand-side Platforms (DSPs) .................................................................... B-45
Appendix C
Company Profiles: Data Management Platforms (DMPs) .......................................................... C-48
Appendix D
Company Profiles: Supply-side Platforms (SSPs) ........................................................................ D-50
Appendix E
Company Profiles: RTB Ad Exchanges ........................................................................................ E-51
Appendix F
Company Index ............................................................................................................................F-52
Table of Contents
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List of Figures
Figure 1: Source of Data ...................................................................................................................................... 7
Figure 2: Glossary of Terms ................................................................................................................................. 9
Figure 3: The Core Benefits of RTB .................................................................................................................... 10
Figure 4: Real-time Bidding (RTB) Technical Workflow ..................................................................................... 12
Figure 5: Real-time Bidding Online Advertising Ecosystem............................................................................... 13
Figure 6: Who's Who in Real-time Bidding ........................................................................................................ 14
Figure 7: RTB Advertising Revenue Flow ........................................................................................................... 15
Figure 8: Media Buying Desks (MBDs) ............................................................................................................... 18
Figure 9: Demand-side Platforms (DSPs) ........................................................................................................... 21
Figure 10: Data Management Platforms (DMPs) .............................................................................................. 23
Figure 11: Pubmatic Ad Price Prediction Workflow .......................................................................................... 25
Figure 12: Supply-side Platforms (SSPs) ............................................................................................................ 27
Figure 13: RTB Ad Exchanges............................................................................................................................. 29
Figure 14: Private Ad Exchanges ....................................................................................................................... 31
Figure 15: DoubleVerify's 6 Critical Areas of Media Verification ...................................................................... 34
Figure 16: RTB Online Display Ad Revenue Forecast Methodology .................................................................. 35
Figure 17: Drivers and Barriers of Growth of RTB Ad Market ........................................................................... 36
Figure 18: RTB Online Display Advertising Revenues North America 2012-2017 ............................................. 37
Figure 19: Total Internet, Online Display, and RTB Advertising Revenues in N.A. 2012-2017.......................... 38
List of Figures
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The Bottom Line
►
►
The core market sectors comprising the real-time bidding (RTB) market include:

Platforms that serve the buy-side (media buying desks and demand-side platforms);

Platforms that serve the sell-side (supply-side platforms and private ad exchanges); and

Intermediaries that facilitate the exchange of data, bids, and ad expenditures.
Ad networks are experiencing competitive pressure as RTB enablers offer greater transparency, control,
and accuracy. Moving forward, ad networks must integrate RTB capabilities to avoid losing market share,
as digital ad revenues will gravitate towards performance and efficiency.
►
Reallocated ad spend, away from traditional online display advertising will shift to the RTB ad market as
buyers become more comfortable with the concept and realize the benefits such as cost efficiencies,
reduced ad waste, scalable reach, and control and transparency.
►
In 2012, RTB advertising revenues in North America (U.S. and Canada) will reach $1.6 billion, rising to
$6.9 billion by 2017 and growing at a five-year 34% compound annual growth rate (CAGR). At present,
the U.S. RTB market accounts for 98% to 99% of RTB ad expenditures in N.A. The Canadian RTB industry
is in its formative stages of development with few display ad impressions bought and sold in real-time.
►
In 2012, Parks Associates’ forecast pegs total online display advertising at $13.7 billion, with that sector
accounting for approximately 35% of total Internet advertising expenditures in N.A. Through the fiveyear forecast period, online display advertising revenues, including RTB, will grow to $20.1 billion, in line
with the overall rise in Internet advertising. Of all online display ad revenues, RTB accounts for 12% in
2012; its share will increase to 34% by 2017.
►
Agency demand for cross-platform ad synergies drives the development and adoption of RTB sell-side
platforms for emerging media - online video, mobile, and social. Even so, Parks Associates predicts these
new RTB markets will remain small with growth contingent on the maturation of the online display RTB
ad market.
The Bottom Line
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Data Points
►
When placing bids on RTB ad avails, buyers set a maximum bid using a CPM-based pricing model on an
impression-by-impression basis (e.g., $1.00 CPM = $0.001 per impression or 1/1000 CPM for each
impression won). The highest bidder wins at $0.01 per ad impression above the next highest bidder. For
example, if Brand A bids a $1.00 CPM and Brand B bids a $2.00 CPM, Brand B wins the auction and pays
a $1.01 CPM.
►
Demand-side platforms (DSPs) adhere to a service or technology fee business model (aka buying fee)
based on the percentage of media spend. These fees typically range from 10% to 20% of total media
budget (e.g., agency spends $100,000; DSP earns $10,000 to $20,000).
►
Supply-side platforms (SSPs) assume ad revenue sharing models retaining a percentage, typically 10% to
15%, of ad revenues flowing to the RTB ad inventory owner. For example, the SSP receives payment
from an ad exchange, takes a 10% to 15% cut, and then sends remaining revenues (around 85% to 90%)
to the online publisher.
►
Ad exchanges generate revenue by charging DSPs a percentage fee on ad revenues processed by the
exchange. The fees range from 10% to 30% and vary based on the size of media budget. Some ad
exchanges deduct a flat fee from the CPM paid by the winning bidder. In both cases, the ad inventory
holder (online publisher) receives the remaining revenue.
►
Facebook Exchange is a driving force of RTB ad inventory availability through the five-year forecast
period. According to comScore’s U.S. Digital Future in Focus 2012, the social network serves
approximately one-third of U.S. display ad impressions, which opens up a large source of display ad
inventory to the RTB market.
Data Points
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1.0 REPORT SUMMARY
1.1 PURPOSE OF REPORT
This report provides an assessment of the major business segments comprising the real-time bidding (RTB)
online display advertising market in North America (N.A.). 1 The study serves as an educational tool for
executives who are unfamiliar with the inner workings of RTB and provides industry insight and strategic
direction for companies operating in the space.
1.2 SCOPE OF REPORT
Real-time Bidding: The Online Ad Exchange evaluates the online RTB landscape from two viewpoints
primarily– the buy-side (ad agencies and advertisers) and the sell-side (online publishers). While real-time
bidding technology exists for online video and mobile media, this report focuses on online display
advertising. The strategic analysis is as follows:

Evaluation of the primary market sectors including ecosystem positioning, business role, and
technical workflow

Review of the key companies using competitive profiling

Identification of industry segments influenced by RTB-enabled technology platforms

Assessment of factors defining market growth

Projection of five-year online display advertising revenues generated from RTB methods in North
America (N.A.)
1
U.S. and Canada
Report Summary
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1.3 RESEARCH APPROACH
1.3.1 DATA SOURCES
This report uses data for analysis from the following sources (Figure 1):
SOURCE OF DATA
Public Information


Company websites, press releases, and blogs
Industry-related news articles
In-depth Company Interviews

Interviews with approximately 20 top-level executives employed at leading ad agencies, demand-side and
supply-side firms, ad networks, ad exchanges, and online publishers.2
Industry Sponsored Research








comScore, Inc., U.S. Digital Future in Focus, 2012
Digiday and Google, Real-Time Display Advertising: State of the Industry, 2011
BlueKai, Data Management Platforms Demystified, 2011
Google, The Arrival of Real-Time Bidding and What it Means for Media Buyers, 2011
comScore, Inc., The 2010 U.S. Digital Year in Review, 2011
Interactive Advertising Bureau (IAB) of Canada, 2010 Actual + 2011 Estimated Canadian Online Advertising
Revenue Survey DETAILED REPORT, 2011
PubMatic, Ad Revenue Report, 2011
PubMatic, Understanding Real-Time Bidding (RTB) From the Publisher Perspective, 2010
Figure 1: Source of Data
2
To protect the anonymity of our industry partners, and depending on the research topic, Parks Associates does not
directly source individuals or companies who provide industry insight and perspective in company interviews.
Report Summary
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1.3.2 GLOSSARY OF TERMS
The following glossary, Figure 2, defines key industry terms used in the report.
GLOSSARY OF TERMS3
Term
Above the Fold
Ad Avails
Ad Call
Ad Exchange
Ad Tag
Industry Definition
Industry term referring to the top area of a webpage that a consumer
sees without having to scroll down.
Industry term describing ad inventory such as display ad units,
commercial time slots, etc.
Technical function when a web browser asks an ad exchange or ad server
to send an ad. The ad call includes information from browser cookies and
ad tag information such as publisher ID, size, location, referring URL, etc.
Ad marketplace where multiple ad buyer and seller platforms meet to
exchange media in real-time bidded auctions. Ad exchanges provide
technical workflow and reporting tools for demand and supply sources.
HTML area located on a webpage that communicates with an ad server
and requests an ad.
Media Buying Desk (MBD)
Buy-side platform employed by ad agencies to consolidate the process of
planning, buying, serving, and reporting online media campaigns in real-time.
MBDs typically integrate with a demand-side platform (DSP) to leverage the
technology stack offered by DSPs in lieu of building the technology required
to access RTB inventory.
Below the Fold
Industry term describing the bottom portion of a webpage that is
obscured from the user requiring them to scroll down to access it.
Small text files that websites place on web browsers to detect when a
user returns to a website or interacts with an ad.
Method of evaluating media efficiency and payment. CPM is a ratio
based on how much it costs to reach or achieve 1,000 persons/viewers/ad
impressions.
Actual graphical or video advertisement. Common creative formats
include GIF, JPEG, JavaScript, HTML, and Flash.
Business strategy used to help a company understand its current and
prospective customers. Customer data is captured, stored in a central
database, analyzed, and distributed to internal touch points such as sales
divisions, call centers, websites, point-of-sale, and direct marketing
channels.
Centralized data management platform that allows ad agencies to create
customized audience segments based on first party and third party data
sources.
Buy-side technology platform that allows ad agencies to manage multiple
ad exchanges and data exchanges through a centralized interface.
Cookies
Cost-per-thousand (CPM)
Creative
Customer Relationship Management
(CRM)
Data Management Platform (DMP)
Demand-side Platform (DSP)
3
The report summarizes the industry terms based on information obtained from secondary sources including, but not
limited to, AppNexus Display Advertising Glossary, https://wiki.appnexus.com/display/industry/Display+Advertising
+Glossary
Report Summary
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GLOSSARY OF TERMS3
Reach
Real-time Bidder
Real-time Bidding (RTB)
Real-time Bidding API
Remnant Inventory
Supply-side Platform (SSP)
Yield Optimization
Number of unduplicated viewers exposed to a video program or TV
application or an advertiser's schedule over a specific time period. Also
known as cume. Formula: Reach = Unique Target Audience ÷ Target
Universe Size
Server-to-server optimization engine that allows MBDs, DSPs, and ad
networks to evaluate and bid on individual ad impressions
instantaneously.
Industry term used to describe the technology infrastructure and
management systems that enable the automated purchase and selling of
online display advertising in real-time.
Software-to-software interface provided by ad exchanges that connects
RTB-enabled ad inventory offered by SSPs and ad exchanges to buy-side
platforms such as Media Buying Desks (MBDs) and demand-side
platforms (DSPs).
Low-cost advertising space or time that is relatively undesirable or
otherwise unsold.
Sell-side technology platform that allows online publishers to increase
advertising revenue and manage ad inventory.
Technique that boosts the performance of online display ad inventory by
linking online publishers to various ad networks and ad exchanges to
maximize ad inventory fill rates and increase ad revenues.
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 2: Glossary of Terms
Report Summary
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1.4 DEFINING REAL-TIME BIDDING (RTB)
WHAT IS RTB?
Real-time bidding (RTB) describes the technology infrastructure and management systems that enable the
automated, real-time purchase and selling of online display advertising. RTB is neither a technology nor an
ad platform but rather a term describing the entire process. Real-time bidding is a data-driven buying model
through which ad agencies place auction-based bids for individual ad impressions instantaneously. The
alternative buying model is a static auction through which audience segments are purchased in bulk of 1,000
ad impressions. By contrast, the RTB auction process takes place in milliseconds (one thousandth of a
second), hence the label real-time.
WHY RTB?
The evolution of the RTB market began with
the emergence of ad networks. For the past
decade, ad networks have been the primary
way ad agencies reached online audiences at
scale and ad sellers monetized remnant (aka
unsold) ad inventory. In a manner similar to
traditional media buying practices (e.g., TV
buying), agencies pay ad networks a CPMbased rate to reach audience segments with
the understanding that a portion of the
online ads will not reach intended consumer
Figure 3: The Core Benefits of RTB
targets. However, as algorithms and data analytic strategies began to support the digital advertising market,
advertisers’ quest for cost efficiencies and greater media campaign control and transparency intensified. As
a result, a new breed of advertising tool (media buying desks – MBDs, DSPs, SSPs, and ad exchanges)
emerged in 2007 to facilitate a more precise and timely digital media placement and sales approach.
However, it was not until around 2009 that these platforms began to offer real-time bidding (RTB) solutions,
providing even greater efficiencies, and control over the online display adverting process. Since then, ad
buyers and sellers focus on leveraging the benefits of RTB (Figure 3).
Report Summary
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HOW DOES RTB WORK?
In an RTB environment, ad buyers analyze the multiple variables of an ad impression such as demographics,
geography, and publisher attributes. To do this, they overlay first4 and third party audience data to
determine the value of online display ad impressions. The pre-determined inventory value guides the
bidding process. RTB also allows agencies to reduce the time required to scale media buys as well as the
complexity of scaling media buys across multiple supply sources (e.g., supply-side platforms, ad exchanges,
ad networks, and publisher websites). Today, there are four primary ways agencies execute RTB-based
advertising strategies5:
1.
2.
3.
4.
Acquire or license a media buying desk (MBD)6 that uses demand-side platform (DSP) technology
Buy from a DSP direct that provides a built-in real-time bidder
Partner with an ad network which supports real-time bidding
Develop a real-time bidder into a MBD to access RTB APIs
While there are several paths for agencies to take when employing RTB, most use a media buying desk (MBD)
that relies on demand-side platform (DSP) technology to access and bid on RTB ad impressions. In most
cases, ad agencies prefer to leverage the technology stack offered by DSPs in lieu of building the technology
required to access RTB inventory. Additionally, greater control is obtained when planning and buying media
through an agency-owned MBD. Therefore, option 1 is the most common way large ad agencies set up RTB
ad campaigns. Presently, only a few small and medium agencies buy RTB inventory due to lack of
knowledge regarding the emerging ad space as well as limited required company resources to develop or
license the technology to facilitate RTB media buys.
There are two core technology elements encompassing the real-time bidding process – the RTB applicationprogramming interface (API) and the RTB bidder:

The RTB API is a software-to-software interface provided by ad exchanges that connects RTBenabled ad inventory offered by SSPs and ad exchanges to buy-side platforms such as MBDs and
DSPs;

A RTB bidder is a server-to-server systems integrator that connects all RTB-enabled APIs between
buyer and seller platforms. These enable the automated exchange of ad dollars in real-time.
4
First party agency data may include customer relationship management (CRM) sources.
See Figure 4: Real-time Bidding (RTB) Technical Workflow
6
Detailed in Section 2.0: The Buy-side
5
Report Summary
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While this report focuses mainly on RTB business sectors, operations, revenue models, and key market
trends, Figure 4 outlines the RTB technical workflow from a high-level perspective.7 The RTB workflow
includes the following:
1. User visits a website
2. Web server delivers HTML code
to web browser with direct to ad
server via ad tag link
3. Ad server returns ad tag for RTBenabled SSP or ad exchange
4. User cookie ID sent to SSPs
5. Ad exchange begins auction
using RTB APIs
6. Buyers (MBDs, DSPs, ad
networks8) value the ad
impression using first party and
third party data based on user’s
cookie ID and sets bid using RTB
bidders
7. Ad exchange determines winning
bid and delivers ad server
redirect to user
8. User calls the winning bidder to
obtain ad server location
9. Ad server delivers ad to user’s
browser
Real-Time Bidding (RTB) Technical Workflow
Publisher
Ad Server
3
2
2
9
1
Website
4
Advertiser
Ad Server
8
SSP
7
SSP
SSP
5
8
Ad
Exchange
6
6
6
6
6
7
MBD
DSP 1
Ad Network
DSP 3
DSP 2
MBD
© 2012 Parks Associates
Figure 4: Real-time Bidding (RTB) Technical Workflow
7
The graph intends to illustrate the technical workflow; however, Parks Associates acknowledges that demand-side
platforms can choose to purchase RTB ad inventory from either an ad exchange or SSP (i.e., SSPs are not dependant on
ad exchanges to sell impressions).
8
Traditionally ad networks are the sellers of online ads; however, in RTB these firms assume the role of ad buyer
bidding on RTB ad impressions competing directly with MBDs and DSPs.
Report Summary
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Real-time Bidding: The Online Ad Exchange
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When placing bids on RTB ad avails, buyers set a maximum bid using a CPM-based pricing model. The
highest bidder wins at $0.01 per ad impression above the next highest bidder. For example, if Brand A bids
a $1.00 CPM and Brand B bids a $2.00 CPM, Brand B wins the auction and pays a $1.01 CPM. Unlike
traditional CPM buying models where ad rates are based on the cost to reach 1,000 ad impressions in bulk,
buyers place bids on an impression-by-impression basis (e.g., $1.00 CPM = $0.001 per impression or 1/1000
CPM for each impression won).
WHO ARE THE KEY RTB PLAYERS?
Figure 5 provides an illustration and description of the core business sectors comprising the RTB advertising
market. The ecosystem is segmented by platforms that serve the buy-side, sell-side, and the intermediaries
that facilitate the exchange of data, bids, and ad dollars between them.
S
I
D
E
Media Buying
Desks (MBDs)
Internal
agency ad
management
platform used
on top of a
demand-side
platform (DSP)
or other bidbased buying
technology
Demand-side
Platforms
(DSPs)
Centralized
system that
allows ad
agencies/
advertisers to
manage
multiple
supply sources
and data
management
accounts
Ad Exchanges
Automated auction
based ad-pricing
system facilitating
real-time ad
exchanges between
multiple demand and
supply sources
Ad Networks
Aggregator of ad
inventory for
multiple web sites
or applications. Ad
networks service
both advertisers
and publishers
Supply-side
Platforms
(SSPs)
System that
enables
content
owners/
publishers to
manage and
optimize ad
inventory
Online Publishers
B
U
Y
Advertisers/Ad Agencies
Real-time Bidding Online Advertising Ecosystem
S
E
L
L
S
I
D
E
Data Management Platforms (DMPs)
Intakes, aggregates, and outputs data from multiple sources to design custom audience
segments
Ad Verification
Service employed to ensure RTB ads are displayed in brand-safe content and adhere to media campaign
goals and guidelines
© 2012 Parks Associates
Figure 5: Real-time Bidding Online Advertising Ecosystem
Report Summary
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Figure 6 highlights the main RTB players by type.9 The report profiles firms in the MBD, DSP, DMP, SSPs, and
ad exchange sectors in full10 and in summary11.
Who’s Who in Real-time Bidding
Ad
Agencies
Media Buying
Desks (MBDs)
Demand-side
Platforms (DSPs)
Ad Exchanges
Supply-side
Platforms
(SSPs)
A
d
B
U
Y
S
I
D
E
A
g
e
n
c
i
e
s
S
E
L
L
Private Ad Exchanges
Ad Networks
S
I
D
E
Data Management Platforms (DMPs)
Ad Verification
© 2012 Parks Associates
Figure 6: Who's Who in Real-time Bidding
9
Modeled after LUMA Partners Display Advertising Technology landscape infographic. Available at http://www.luma
partners.com/resource-center/
10
Resource Book Appendix A-E
11
Summarized company profiles included by report section.
Report Summary
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HOW DO RTB AD REVENUES FLOW?
To provide a holistic view of RTB economics, Figure 7 illustrates the RTB advertising revenue streams. The
buy-side and sell-side analyses found in Section 2, Section 3, and Section 4 of the report offer a full
description of each business model approach.
RTB Advertising Revenue Flow
Brand Advertiser
$100,000 Budget
Ad Agency
B
U
Y
S
I
D
E
$15,000
15% Agency
Commission
$85,000 Ad Spend
Media Buying Desk
(MBD)
10% Service/Tech
$8,500
Fee
$76,500 Ad Spend
Demand-side Platform
(DSP)
10% Buying Fee
$7,650
$68,850 Ad Spend
Ad Exchange
$6,885
S
E
L
L
10% Service Fee
$61,965 Ad Spend
Sell-side Platform
(SSP)
10% Revenue Share
$6,797
Online Publisher
Indicates the sector that is
charged the fee/commission
$55,168 Ad Revenues
S
I
D
E
© 2012 Parks Associates
Figure 7: RTB Advertising Revenue Flow
Report Summary
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Real-time Bidding: The Online Ad Exchange
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2.0 THE BUY-SIDE
2.1 MEDIA BUYING DESKS (MBDS)
Ad agencies employ media buying desks (MBDs) to consolidate the process of planning, buying, serving, and
reporting bid-based online media campaigns.12 By leveraging the power of technology, agencies eliminate
labor-intensive media planning and buying processes. Additionally, media buying desks (MBDs) compile
proprietary audience intelligence profiles and integrate these data models into third-party DSP decisionmaking processes.
Revenue models vary by agency holding company type; however, most MBDs operate under a service or
technology business model with fees for their use based on total media spend. The exact percentage of
media spend charged is unknown as many agencies negotiate MBD fees as part of agency commissions.
Those are historically 15% of the client’s total media budget. Parks Associates presumes MBDs charge
clients an additional 10% to 15% of media spend for the right to use the platform to reach audiences in realtime ad markets.13
While MBDs offer multiple benefits such as enhanced audience targeting, consistent workflow, site-level
transparency14, and impression-level control15 to agencies and their clients, the sector nonetheless endures
client scrutiny. For instance, agency clients express concern that they are being charged double by agencies
- first for media planning and buying services via agency commissions and then again, to employ the
agency’s proprietary MBD. Additionally, some platforms, like WPP’s Xaxis, buy ad inventory in bulk and
resell it to clients at a premium rate (similar to the ad network model) leaving clients questioning overall
cost efficiencies. Finally, agency holding companies are accused of mandating that proprietary MBDs are
used by sister agencies to process all online display ad transactions. In this case, agencies are able to secure
12
Parks Associates labels the sector media buying desk because ad agencies are sensitive to the term agency trading
desks as it implies that the platform manages ad impressions like a stock market exchange and competitively trades
inventory between client accounts.
13
Based on knowledge of demand-side platform service fee percentages
14
Gives ad agencies full disclosure on the number of ads served to exactly what types of sites helping them evaluate the
quality of publisher partners.
15
Allows ad agencies to purchase individual ad impressions that met specific campaign goals versus in bulk of 1,000
impressions.
The Buy-side
16
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incremental revenues on media buying services that are typically covered in the standard agency
commission rate.
Many MBDs consider themselves system integrators because of their platform’s ability to connect digital
marketplaces. As a result, MBDs focus on establishing cross-platform RTB capabilities and support
investments in display, online video, mobile, and social media technology infrastructure to scale media
strategies. Most, if not all, solutions enable multiplatform real-time bid-based buying to achieve this goal.
In addition, because full-transparency (when, where, and how an ad is displayed) is a benefit of RTB,
industry compliance recognition is valued among buying and selling platforms. Using multiple ad verification
criteria, media monitoring firms report non-compliance incidents.16 Non-compliance occurrences include,
but are not limited to, ads displayed on inappropriate websites, ads served outside of designated
geographic regions, and ads appearing on the same web page as a competitor. Industry compliance
confirms the RTB ad platform adheres to media campaign guidelines and goals. This is a critical aspect to
ensure overall transparency and trust required by ad buyers to justify media budget allocation to the RTB
market. Three of the four agency-owned MBDs met industry compliance standards measured and reported
by leading ad verification firm, DoubleVerify.
Figure 8 provides an overview of the leading agency and independent media buying desks.17
MEDIA BUYING DESKS (MBDs)
AGENCY-OWNED
Ad Agency
2011 Agency
Revenues18
Product
Metrics
Launch
$14.4 billion
Executed 4,000+
campaigns for
700+ clients
2011
$12.5 billion
na
2009
Proprietary
Agency
Platform19
Most
Compliant
Platform20
16
See Figure 15: DoubleVerify’s 6 Critical Areas of Media Verifications in Section 4.3 Ad Verification Services
Full company profiles found in the Resource Book, Appendix A
18
Ad Age DataCenter, April 2011, worldwide revenues
19
Used solely by agency holding company sister agencies
20
DoubleVerify Trust Index Insights, Benchmarks and Findings on Online Advertising Compliance 2H 2011
DoubleVerify Trust Index Insights, Benchmarks and Findings on Online Advertising Compliance 2H 2010
17
The Buy-side
17
parksassociates.com
Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
$7.18 billion
78+ billion ad
impressions
served
2008
$6.5 billion
50+ billion ad
impressions
served
2009
Private
INDEPENDENT
3,000+ fullyAudience Optics
managed media
campaigns to date
Private
na
2010
2009
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 8: Media Buying Desks (MBDs)
Omnicom’s Accuen and IPG’s Cadreon function like independent MBDs, making their service available for
use by third-party agencies whereas WPP’s Xaxis and Publicis Groupe’s Audience on Demand (AOD) are
proprietary to the agency holding company. The independent status of Omnicom and IPG allows these firms
to extend service to small or medium sized agencies that do not have the internal resources to build a
proprietary RTB technology interface. While this strategy seems advantageous, today, Accuen and Cadreon
process far fewer RTB ad impressions and revenues than Xaxis and AOD.
Typically, agencies integrate one to three DSPs along with a MBD to maximize RTB buying opportunities.
This strategic approach gives MBDs access to large pools of RTB ad inventory as well as the technology
infrastructure provided by DSPs. Industry use of MBDs will increase as firms focus on educating internal and
external agencies on the ways MBDs can drive value for brand advertisers as well as on the benefits of using
an MBD to replace historically used solutions for buying online display ads (e.g., ad networks).
The Buy-side
18
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
2.2 DEMAND-SIDE PLATFORMS (DSPS)
Demand-side platforms (DSPs) aggregate and manage multiple ad inventory sources and help agencies
determine the relative value of different supply sources. DSPs connect to ad inventory using RTB APIs
provided by ad exchanges.
DSPs’ primary functions are as follows:




Serve as a centralized access point to RTB inventory across all ad exchanges
Evaluate websites and ad impressions against media campaign goals
Add a layer of first party and/or third-party user data to identify and develop custom audience
segments
Provide ad serving and post-performance reports
DSPs adhere to a service or technology fee model (aka buying fee) based on the percentage of media spend.
Interviews with leading providers indicate these fees typically range from 10% to 20% of total media budget
(e.g., agency spends $100,000; DSP earns $10,000 to $20,000). Large DSPs place a minimum monthly spend
requirement of $50,000 per brand while smaller providers’ fees range from $2,500 and $10,000 per month.
DSPs also offer self-service tools and managed service support.
DSPs provide enhanced control over the media planning and buying process, including the ability to
reallocate media budget at a moment’s notice based on campaign performance. This speed is much better
than that of working with an ad network. It may take days to weeks to change an underperforming media
schedule using an ad network. In addition to the advantages of integrating real-time bidding for new digital
mediums – online video, mobile, and social, the ability to offer data management solutions sets the major
DSPs apart. Nearly half of the leading DSP providers offer integrated data solutions reducing the need for
third party data partnerships and, most importantly, eliminating service fees required to use such services.
One variable potentially limiting the long-term growth of RTB is DSPs’ inability to access non-display ad
supply offered by online video, mobile, and social media publishers. The ability to access new media and
develop cross-platform ad campaigns through a single buying interface is increasingly in demand by ad
buyers - particularly in high-growth digital markets with ever-growing audiences. To the industry’s delight,
such needs are beginning to be addressed as many RTB-enabled systems on both the buy-side and sell-side
are adding features to monetize new media via the real-time bidding ad models. For instance, WPP’s
The Buy-side
19
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
GroupM launched the industry's first DSP advertising solution for mobile media in 201021 and major online
video ad network SpotXchange offers RTB capabilities alongside its traditional online video ad network
service. In early 2012, DSP and SSP provider, AppNexus and BrightRoll Exchange (BRX), a video ad exchange
announced a strategic partnership to integrate BRX’s online video inventory into the AppNexus platform.
This partnership creates new opportunities for ad buyers to extend RTB features for online video buying.
Parks Associates believes DSPs with early RTB launches (in 2009) that offer integrated data management
services and multiplatform presence will achieve long-term sustainability. DataXu, Triggit, Turn, and
AppNexus meet these criteria. These DSPs also have strong ad exchange partners, which give RTB buyers
access to large swaths of inventory. Early on, AppNexus formed partnerships with the leading ad exchanges
- Microsoft, Google, Admeld, and OpenX. The firm also offers an end-to-end solution not offered by any
other DSP; AppNexus also powers the sell-side via its SSP and offers data management solutions. DataXu is
another market leader. Alongside its wide-range of ad inventory, technology, and service provider partners,
DataXu, offers a data management solution and receives recognition from DoubleVerify as one of the most
compliant DSP platforms.
Sorted by RTB launch date, Figure 9 highlights the major DSP providers including ownership, product, data
competencies, and industry compliance recognition.22
DEMAND-SIDE PLATFORMS (DSPS)
Company
Parent
Company
Product
Company and RTB
Launch
Private
DX3
2007
RTB launch in 2009
Private
Full-service, Selfservice, Data
Management &
Analysis
2005
RTB launch in 2009
Data
Management
Platform
(DMP)
Most
Compliant
Platform2324
22
Full company profiles found in the Resource Book, Appendix B
Top Most Compliant Platform, DoubleVerify Trust Index Insights, Benchmarks and Findings on Online Advertising
Compliance 1H 2011
24
Top Most Compliant Platform, DoubleVerify Trust Index Insights, Benchmarks and Findings on Online Advertising
Compliance 2H 2011
23
The Buy-side
20
parksassociates.com
Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Private
Turn Media, Turn
Audience, Crosschannel
2004
RTB launch in 2009
Private
AppNexus
Technology
2007
RTB launch in 2010
Google
Bid Manager
2007
RTB launch in 2010
Private
TerminalOne
Private
The DESK
The ADSERVER
2007
RTB launch in 2010
2009
RTB launch in 2010
Private
SiteScout RTB
Platform
2000
RTB launch in 2010
Private
Origin Digital
Marketing Hub
1999
RTB launch in 2010
Private
RTB launch 201225
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 9: Demand-side Platforms (DSPs)
A potential disruptor to the DSP sector is the entry of established ad planning, buying, and billing system,
MediaOcean26. MediaOcean executives assert that ad agencies no longer need ad network partnerships or
DSP integration to process real-time online display ad campaigns. In summer 2012, MediaOcean will roll out
a cross-platform media product based on an open platform with universal APIs. The product plugs into a
wide range of agency-managed services and platforms. This interoperability allows an agency to customize
services to create and maintain a competitive advantage and increase company margins by eliminating DSP
service fees. The ability to add new media services directly on top of an MBD in a plug-and-play manner is a
compelling option for agencies. MediaOcean’s open system may prove a formidable disruptor to the DSP
industry as nearly 70% of all agency ad dollars in the U.S. pass through Donavan Data System (DDS) or
MediaBank (rebranded MediaOcean) billing systems. Its entry may give agencies a turnkey and more
efficient approach to RTB advertising in the long-term.
25
Canada’s first demand side platform- integrated with Casale Media, Doubleclick and AppNexus platforms
26
In late 2011, Donovan Data Systems (DDS) and MediaBank announced a merger to form MediaOcean, a
universal, open operating system for advertising management technology.
The Buy-side
21
parksassociates.com
Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
2.3 DATA MANAGEMENT PLATFORMS (DMPS)
Data is the single most important element supporting the RTB value chain. Data variables include, but are
not limited to, purchase intentions, household demographics, and behavioral patterns. Primarily used in
buy-side services, DMPs collect, manage, and evaluate online user information obtained from multiple
media sources to identify and create audience segments. These data sources determine the value of ad
inventory relative to the advertiser’s campaign goals. They also enable the delivery of the right ad unit to
the right consumer on the most effective media channel. While DMP services are essential to the RTB
process, DMP also provides audience intelligence across the entire digital ad ecosystems - not just the RTB
ad market.
DMPs collect anonymous, non-personally identifiable information (non-PII), such as age, gender, education
level, and household income. Personally identifiable information (PII) or other sensitive personal
information, such as name, phone number, e-mail address, Social Security Number, or credit card
information is never collected or used to develop targetable audience segments.
DMPs mine online user metrics via cookie IDs or pixel tags obtained from a user’s web browser. It is
important for DMPs to adhere to self-regulatory practices established for online data collection and supply
consumer privacy controls in order to maintain trust with agencies and consumers alike27. All of the major
DMPs offer opt-out tools for users.
DMPs generate revenues in one of two ways:28
1. Technology License Fee: Fixed monthly or yearly rate based on the number of service modules
licensed as well as the volume of data processed
2. Service Fee: Fixed monthly or yearly fee based on unique visitors. This may be ½ cent per cookie or
a set fee based on the number of ad impressions processed
The single most important factor when assessing DMP value is whether the platform has universal access to
all sources of digital media including direct publisher sites, ad networks, and ad exchanges. The leading
DMPs have comprehensive networks of industry alliances including media and data partners. These
27
Consumer opt-out tools available via Network Advertising Initiative (NAI), an industry self-regulatory program for
online behavioral advertising.
28
In order to access and sell data, DMPs share a percentage of revenues with publisher partners that produce the user
metrics.
The Buy-side
22
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
networks are essential for obtaining a unified view of audience behavior so buyers are able to establish and
achieve RTB campaigns goals. Parks Associates rates BlueKai, eXelate, and Lotame as the top performing
DMP providers based on strong industry alliances, universal data access, and media platform reach.
Figure 10 lists leading DMP providers with service launch dates, products, and notable industry alliances.29
DATA MANAGEMENT PLATFORMS (DMPS)
Company
Product
Launch
Contextual Data
Brand Protection Data
Audience Interest Data
2006
BlueKai Data Management
Platform
BlueKai Data Exchange
Late-2007
maX Data
 Adaptive Audience
Intelligence
 DataLinX
 Premium Data
2007
Crowd Control
2008
Adobe Audience Manager
(formerly Demdex)
2009
AdAdvisor
1999/2009
Notable Industry Alliances
eBay, Admeld, TubeMogul, AppNexus,
Bizo, Dedicated Media, adBrite,
Pubmatic
24/7 Real Media, adBrite, Adap.tv,
BrightRoll, Collective, DataXu,
Dedicated Media, FreeWheel, Fox
Digital Media, Interclick, Insight
Express, MediaMath, Meebo
Omnicom, Tremor Video, TubeMogul,
YuMe, Expedia, Forbes
Adap.tv, BrightRoll, AppNexus, Google
Display network, Collective, Interclick,
MediaMath, PubMatic, Turn,
Videology, Invite Media, Alliant, Bizo,
Nielsen, Forbes, Acxiom
Alliant, Acxiom, Bizo, TARGUSinfo,
BrightTag, LiveRail, AppNexus, adBrite,
Adap.tv, Audience Science, Interclick,
Xaxis, Videology, Turn
Acxiom, Bizo, datalogix, eXelate,
TARGUSinfo
Dealix, Leads360, LeadPoint
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 10: Data Management Platforms (DMPs)
While several leading DSPs - such as AppNexus, DataXu, Triggit, and Turn - provide data solutions, codevelopment and strategic partnerships are forming between agency-owned MBDs and DMPs, giving
agencies even more control over the RTB process. Publicis’ VivaKi Nerve Center30 recently announced an
agreement with leading DMP BlueKai to develop a solution that synchronizes BlueKai data with agency
29
30
Full company profiles found in the Resource Book, Appendix C
Publicis Groupe’s VivaKi research and development center
The Buy-side
23
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
cookie tracking systems to enhance audience profile schemes. This very well may be a proactive move in
reaction to major brands (agency clients) recently taking an interest in the RTB process. Some brand
advertisers now approach DMPs with interest in licensing data management services. Consequently, DMP
providers are beginning to target agency clients directly. While the negative impact appears minimal,
agencies must determine whether data evaluation at the client level (the brand advertiser) breaks down
established workflows and, more importantly, damages agency/client relationships. Will brands take the
data obtained by DMPs and work directly with DSPs or ad exchanges to circumvent MBD service fees?
Parks Associates considers this unlikely since brand managers rely on agency expertise. Even so, ad agencies
must demonstrate to their clients their expertise skill sets required in managing the online ad exchange
process in a way that is superior to the client’s skills. Agencies must also reposition ad planners and buyers
as media strategists with deep understanding of advanced ad technology and markets.
The Buy-side
24
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
3.0 THE SELL-SIDE
3.1 SUPPLY-SIDE PLATFORMS (SSPS)
Supply-side platforms are algorithm-driven systems used by online ad sellers to monetize remnant, or
unsold, ad inventory. Sellers employ SSPs to increase the value of indirect ad inventory through yield
optimization31 techniques. SSPs enable sellers to pinpoint and bundle the most valuable audiences and sell
individual ad impressions at premium rates typically achieved only by direct ad sales (in-house ad sales
division working with ad agency). While SSPs initially assisted publishers in unloading remnant ads,
publishers are beginning to release premium inventory avails to SSPs to capture larger shares of ad budgets
processed in RTB markets. Online publishers rarely plug into more than four or five SSPs to monetize ad
inventory.
SSPs allow publishers to select demand
partners (i.e., who gets access to
inventory such as an MBD, DSP, ad
network, or ad exchange) and manage
supply selection (i.e., when buyers get
access, volume of RTB ad avails, and
pricing minimums). SSPs manage many
types of ad inventory levels – not just
RTB. For example, PubMatic’s’ Ad Price
Prediction service accepts bids from
non-RTB enabled demand sources such
as ad exchanges, ad networks and
direct-to-agency orders. As such, an
RTB bid wins only if it is the highest
demand-side price entering the system
(Figure 11).
Figure 11: Pubmatic Ad Price Prediction Workflow
31
Yield optimization is a technique that boosts the performance of online display ad inventory by linking online
publishers to various ad networks and ad exchanges to maximize ad inventory fill rates and increase ad revenues.
The Sell-side
25
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Most SSPs use ad revenue sharing models, retaining a percentage, typically 10% to 15%, of ad revenues
flowing to the RTB ad inventory owner. For example, the SSP receives payment from an ad network, ad
exchange or DSP, takes a 10% to 15% cut, and then sends remaining revenues (around 85% to 90%) to the
online publisher.
Unlike the DSP market sector, which contains privately owned firms, several major media companies (or
publishers) control the SSP industry. Yahoo! acquired Right Media in 2007, Rubicon Project purchased
News Corp.’s Fox Audience Network in 2010, and Google followed suit in 2011 with the acquisition of
Admeld. These acquisitions served to strengthen and expand the advertising portfolios of major media
companies; evidence of their market dominance is present in comScore data. In 2011 Yahoo! sites delivered
more than 500 billion ad impressions, Google sites served around 175 billion ads; and both were behind the
leader, Facebook, which delivered 1.3 trillion ad impressions.32 These acquisitions also bring sell-side
services closer to the content owner, thereby reducing or eliminating the ad revenue sharing required by ad
networks.
Figure 12 highlights key SSPs provider information pertinent to RTB.33
SUPPLY-SIDE PLATFORMS (SSPS)
Company
32
33
Parent Company
Company and RTB
Launch
Google
(Acquired in 2011)
2007
RTB launch in 2009
Private
2006
RTB launch in 2009
Private
2007
RTB launch in 2010
Private
2007
RTB launch in 2010
Yahoo!
(Acquired in 2007)
Late-2006
RTB launch in 2012
Demand-side
Platform (DSP)
Service
comScore U.S. Digital Future in Focus 2012
Full company profiles found in the Resource Book, Appendix D
The Sell-side
26
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
CasaleX
RTB launch in 2012
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 12: Supply-side Platforms (SSPs)
Moving forward, sell-side stakeholders will embrace RTB and holistic service approaches to gain greater
control over the RTB process. For example, Yahoo!’s Right Media offers DSP, SSP, and ad exchange services.
This allows Yahoo! to maximize margins by providing a one-stop buying and selling experience, long an
attractive value proposition for stakeholders seeking to navigate and manage complex media markets.
AppNexus, too, offers services for both buyers and sellers via its DSP and SSP platforms. Finally, Admeld
stepped outside of its role as a SSP provider to develop private ad exchanges on behalf of its publisher
clients - The Weather Channel and NBC Universal. These strategies permit these firms to capture the
highest margins from both the demand and sell sides of the RTB ecosystem; they also signal strategic plays
by Google and Yahoo! to attain the highest possible RTB market share.
The Sell-side
27
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
4.0 ONLINE BUYING/SELLING INTERMEDIARIES
4.1 RTB AD EXCHANGES
RTB-enabled ad exchanges aggregate ad impressions across many online channels and connect ad sellers to
buyers. Primarily a sell-side service, ad exchanges provide ad inventory details, such as website type, ad unit
size, and user geography to the ad bidder (e.g., MBD, DSP, ad network). They also manage the entire ad
auction process – receiving the bid, determining the winner, and facilitating ad placement.
Ad exchange benefit sellers by controlling price, reducing or eliminating ad network revenue shares (ranging
from 40% to 50%), and assisting in filling otherwise unsold ad inventory. While ad exchanges benefit ad
sellers most, buyers use ad exchanges to their advantage as well. Benefits include:



Providing full-transparency in ad pricing and placement;
Optimizing ad inventory and strengthening return on advertising spend (ROAS) via RTB-enabled
audience targeting capabilities; and
Expanding audience reach.
Ad exchanges generate revenue by charging DSPs a percentage fee on ad revenues passing through the
exchange. The fees range from 10% to 30%, varying based on size of media spend. Some ad exchanges
deduct a flat fee from the CPM paid by the winning bidder. In both cases, the ad inventory holder (online
publisher) receives the remaining revenue.
Ad exchanges process non-RTB ad impressions as well. It is difficult to ascertain the exact number of RTB ad
impressions passing through ad exchanges on a monthly basis, as most firms do not publically release these
metrics. They do however release the total number of ad impressions exchanged on a daily and monthly
basis (non-RTB and RTB). In early 2011, Parks Associates obtained executive insight from a leading ad
exchange; the firm indicates that RTB accounts for around 35% of the ad exchange business (at least in
2011).
Based on the number of annual ad impressions served34, Parks Associates postulates that the large
publishers such as Yahoo!’s Right Media Exchange and Google’s DoubleClick Ad Exchange are the leaders in
34
comScore U.S. Digital Future in Focus 2012
In 2011, Yahoo! sites delivered more than 500 billion ad impressions and Google sites served around 175 billion ads.
Online Buying/Selling Intermediaries
28
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Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
the exchange of RTB ad impressions and achieve the largest revenues of all ad exchanges. In addition,
OpenX is proving to be a formidable competitor posting remarkable growth since its RTB launch in 2009. In
2011, the company achieved revenue growth of nearly 700% compared to 2010 and claims to process close
to 200 billion ad impressions each month.35
In order of RTB launch date, Figure 13 highlights the leading RTB ad exchanges. 36
RTB AD EXCHANGES
Company
Parent Company
Company and RTB
Launch
Private
2008
RTB launch in 2009
Google
RTB launch in 2009
OpenX Limited
2007
RTB launch in 2009
Private
Formerly
ADSDAQ/Contextweb
Around 1 billion ad impressions exchanged
per day/ 30 billion each month
Average eCPM increase of 130% across
unsold inventory pool compared with
directly booked deals with ad networks
More than 200 billion ad impressions per
month
Reach: 154 million unique visitors37
2009 (ADSDAQ)
RTB launch in 2010
Around 8 billion ad impressions per month
Microsoft Corp.
(Acquired in 2007)
Formerly AdECN
2009
RTB launch in 2011
Yahoo!
(Acquired in 2007)
Late-2006
RTB launch in 2012
Facebook Exchange
Operational Metrics
RTB launch in 2012
More than 11 billion ad impressions
processed per day/ 330 billion each month
Partnering with eight DSPs including Triggit,
Turn, DataXu, MediaMath, AppNexus, and
TheTradeDesk
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 13: RTB Ad Exchanges
35
OpenX Becomes First Ad Exchange to Support The Interactive Advertising Bureau's "Rising Stars" Ad Units. Available at
http://openx.com/content/openx-becomes-first-ad-exchange-support-interactive-advertising-bureau%E2%80%99s%E2%80%9Crising-stars%E2%80%9D-ad-u (Accessed June 2012).
36
Full company profiles found in the Resource Book, Appendix E
37
comScore, January 2012
Online Buying/Selling Intermediaries
29
parksassociates.com
Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
In mid-2012, Facebook announced the expansion of its growing display ad business into the RTB
marketplace, a significant announcement for the market. For the first time, brand advertisers can target
Facebook users based on web browsing history (i.e., ad is displayed on Facebook page based on third party
web browsing habits). Facebook Exchange opens up a large source of display ad inventory to the RTB
market; comScore estimates Facebook’s share of U.S. display ad impressions reached approximately 28% in
2011.38 Facebook Exchange connects with eight leading DSPs including AppNexus, DataXu, MediaMath,
Triggit, Turn, and The Trade Desk.
According to TechCrunch, the Facebook Exchange workflow includes:39
1.
2.
3.
4.
5.
6.
7.
8.
User visits a website that uses a DSP linked to the Facebook Exchange
Cookie is placed on the user’s computer, typically when purchase intent is identified
DSP contacts Facebook and gives them the anonymous user ID they wish to target
Advertiser pre-loads ad creative to be displayed to the user
User visits Facebook and DSP installed cookie is recognized
DSP is notified and makes a real-time bid to target individual Facebook users
DSP with the highest bid displays ad to targeted Facebook user
Facebook user can click ‘X’ on the display ad, which links to an opt out tool that blocks future
Facebook Exchange ads
Another recent trend in RTB is the formation of Private Ad Exchanges. In late 2010, select online publishers
initiated white-labeled private exchanges to balance premium, direct ad sales efforts with the monetization
strategies of unsold ad avails. In private ad exchanges, content owners assume the role of an ad network
and ad exchange, making premium inventory available to groups of buyers via an exclusive, invitation-only
marketplace. Moving forward, premium online publishers will develop private ad exchanges, or at the very
least create joint ventures, in lieu of using a third-party ad exchange or ad network. In doing so, publishers
eliminate ad network revenue shares and increase the value and fill rates of ad inventory. This approach will
attract buyers that seek high quality RTB ad impressions over remnant avails.
Listed by launch date, Figure 14 lists the notable private exchanges.
38
comScore U.S. Digital Future in Focus 2012
TechCrunch, Facebook Exchange: A New Way For Advertisers To Target Specific Users With Real-Time Bid Ads.
http://techcrunch.com/2012/06/13/facebook-exchange/(Accessed June 2012).
39
Online Buying/Selling Intermediaries
30
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© 2012 Parks Associates
PRIVATE AD EXCHANGES
Content Owner/Exchange
Parent Company
Time Warner
Private
Launch
November
2010
January
2011
Product/Technology
Category 5: Digital marketplace that
connects advertisers to more than 50
million consumers across Time
Warner’s web and mobile properties
Powered by Admeld
Tech Media Exchange (TMX): First
private ad exchange focused on the
technology vertical
Powered by Admeld
Joint venture of
Tribune Company,
Gannett Co., Inc.,
Hearst Corporation
and The New York
Times Company
February
2011
Q-Exchange: First private ad
exchange targeting premium local
audience
Powered by Admeld
Universal Audience Platform (UAP)
Comcast Corp.
Mid-2011
Powered by Admeld
Joint venture of
CBC/Radio-Canada,
Rogers Media and
Shaw Media
Canadian Premium Audience
Exchange (CPAX)
May 2012
Powered by AppNexus
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 14: Private Ad Exchanges
In November 2010, major SSP technologist Admeld introduced the industry’s first private ad exchange on
behalf of Time Warner Cable’s The Weather Channel. TWC seeks to increase the overall value of its online
display and mobile ad inventory. By setting up a private ad exchange, TWC is taking control of ad pricing
levels and fostering closer relationships with advertisers, with the end goal eliminating ad network deals.
NBC Universal created the Universal Audience Platform (UAP) to do much the same - evolve agency
relationships and reduce sales channel conflicts (i.e., ad networks selling against its media brands).
Presently, Admeld powers all of the U.S.-based private ad exchanges. In pursuit of this growing market
following Admeld’s success, another SSP provider, PubMatic introduced private exchange management
services targeting premium publishers in 2012.
Online Buying/Selling Intermediaries
31
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Real-time Bidding: The Online Ad Exchange
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4.2 AD NETWORKS
For years, ad networks were the main sales agent of remnant online advertising, aggregating multiple supply
sources providing advertisers with a scaled, cost efficient means to display advertising. As RTB advertising
technology platforms penetrate the market, ad networks experience intense competitive pressure to remain
relevant as RTB platforms offer increased ad impression value, transparency, control, and accuracy. These
advantages are the catalysts for agency re-routing media budgets from ad networks to MBDs and DSPs.
They also drive publishers to release more inventories to SSPs and open and private ad exchanges. As ad
spending continues to shift to real-time bidding systems, ad networks must compete for ad dollars
historically earmarked for purchase via ad networks.
For online publishers, the central issues are margin and increasing the value of ad inventory. Ad networks
are an intermediary in the online ad buying and selling process but take upwards of 50% of publisher ad
revenues while ad exchanges and SSPs receive a managed-service fee – typically, around 10% to 15% of
media spend. Additionally, publishers employing RTB strategies realize better CPM rates when their ad
inventory is placed in an RTB market versus being sold by an ad network. Performance data released by
Pubmatic, a major SSP, indicate RTB increases publisher CPMs by 100%, on average.40
For ad agencies, the core issues are improved campaign effectiveness, transparency, and control. For
agencies, the ad network model has its drawbacks. First, ad networks are considered blind-buys; that is,
buyers do not have control over ad placement so ads can appear on any website located in the network.
Additionally, if an ad network underperforms to media campaign goals, it can take weeks to adjust the
campaign strategy. The automated nature of RTB allows buyers to adjust media schedules immediately
based on the performance of individual sites and ad impressions. RTB ad placement methods also lift ROAS
with the use of dynamic, customized ads based on real-time feedback on campaign performance. According
to PubMatic, agency executives report increasing campaign performance from 20% and 150%41 when using
RTB.
40
41
PubMatic, Ad Revenue Report, 2011
PubMatic, Ad Revenue Report, 2011
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Presently, there is confusion regarding the role of the ad network within the RTB landscape as well as the
long-term effects of RTB on ad networks’ business models. The core question is with what do ad networks
directly compete? To put it in another way, which RTB segment is most likely to displace ad networks –
MBDs, DSPs, SSPs, ad exchanges, none of the above, all the above, or a combination thereof? The
conclusion is all of the above. Any solution that enables ad inventory and ad revenues to enter and exit the
RTB platform while bypassing the ad network is a direct threat to incumbent networks, despite their
seemingly different business roles and motives.
Because of RTB adoption and growth, ad networks are experiencing an identity crisis. Within the RTB, ad
networks now assume the role of the buyer, competing directly with buy-side platforms (MBDs and DSPs)
for RTB ad impressions. In this role, ad networks buy via RTB exchanges then resell the impression to a
client based on a variable markup. From an ad sales perspective, ad networks are beginning to lose ad
selling and revenue share opportunities as online publishers make more ad inventory available to RTBenabled sell-side platforms. Interestingly, almost all ad networks now secretly buy their inventory from
major SSP, AppNexus, which serves as a wholesaler of RTB inventory for ad networks.
Despite established relationships with agencies and publishers, ad networks will eventually realize their
business is vulnerable to RTB systems. Ad network survival is dependent on investing in RTB technology to
match the efficiency, transparency, and scalability offered by RTB. An immediate competitive approach is to
collaborate with leading DSP and SSP providers that offer ad network RTB integration. For example,
AppNexus, a major DSP and SSP provider, offers ad networks the technology to manage both demand- and
sell-side partners and RTB-enabled systems. Another major SSP, PubMatic, extends its service offering to ad
networks so they can access to the same ad inventory released to ad exchanges.
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4.3 AD MONITORING AND VERIFICATION SERVICES
For advertisers, ad monitoring and
verification services are employed to
ensure RTB ads are displayed in brandsafe content and adhere to media
campaign goals and guidelines. These
services also allow content owners to
block unwanted ads or unsavory
advertisers from displaying on a website.
Due to the automated process of RTB,
ad verification services give industry
stakeholders – particularly ad agencies a level of transparency, trust, and
accountability on ad impressions bought
and served. Non-compliance includes
measures such as the number of ad
impressions verified as non-compliant,
rate for inappropriate content, off white
list42, on black list43, and incorrect
geographic targeting. Figure 15 outlines
Figure 15: DoubleVerify's 6 Critical Areas of Media Verification
DoubleVerify’s media verification criteria.
DoubleVerify and Adsafe are the leading online monitoring and verification services. DoubleVerify processes
and verifies more than 60 billion online ad impressions each month (non-RTB and RTB ads). The company
publishes a free, biannual benchmark compliance standards report highlighting non-compliance measures
among major publisher sites and ad buying and selling platforms.44 Industry compliance assurance is a
crucial component for the growth of the RTB market because it ensures platform accountability and
establishes advertiser trust. Once trust and accountability exist, more dollars flow through RTB systems.
42
Off white list: Ads not displayed on a set of predetermined websites that are preferred by the agency.
On black list: Ads displayed on a set of predetermined websites for which ads should not be served.
44
DoubleVerify Trust Index Insights, Benchmarks and Findings on Online Advertising Compliance 2H 2011
43
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5.0 REAL-TIME BIDDING ONLINE ADVERTISING REVENUE FORECASTS IN
NORTH AMERICA (N.A.) 2012 – 2017
5.1 FORECAST METHODOLOGY
Parks Associates forecasts include RTB ad
RTB Online Display Ad Revenue Forecast Methodology
revenues generated from online display
ads in North America (U.S. and Canada)
U.S.
Total Households
Canada
from 2012 to 2017. Figure 16 provides an
Internet Households
illustration of the bottom-up forecast
methodology used to estimate revenues.
Broadband Households
5.2 FORECAST ASSUMPTIONS
# of Internet users per household
Parks Associates applies assumptions and
# of unique monthly adult Internet users
crosscheck references to the revenue
# of Internet sessions daily/monthly/yearly
per user
forecasts based on the following primary
and secondary research sources:

Total # of Internet Sessions Annually
Parks Associates Global Digital Living
Forecast Workbook, December 2011
% of ad-supported Internet sessions
Edition

o
Total households
o
Internet households
o
Broadband households
o
# of unique Internet users
# of Internet Display Ad Impressions/Annual
% of RTB Display Ad Impressions
# of RTB Display Ad Impressions
Industry executive interviews
o
% of ad-supported Internet sessions
o
% of RTB ad impressions
o
RTB CPMs
RTB CPM
RTB Online Display Ad Revenues – N.A.$
Source: Real-time Bidding: The Online Ad Exchange, 2012
© 2012 Parks Associates
Figure 16: RTB Online Display Ad Revenue Forecast Methodology
Real-time Bidding Online Advertising Revenue Forecasts in
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
Industry sponsored research and press releases from comScore, Interactive Advertising Bureau (IAB),
DataXu, Turn Media, Accordant Media, PubMatic, and SiteScout45
o
# of yearly Internet sessions per user
o
% of ad-supported Internet session
o
% of RTB ad impressions
o
RTB CPMs
Figure 17 provides a snapshot of the key drivers and barriers taken in to account when estimating the
growth of the RTB ad market.
Improved audience targeting
Increased campaign performance rates
Transparency (site-level) and Control (impression-level)
Improved yield optimization
Increased CPMs
Facebook Exchange launch
Lack of Agency Education
Devaluation of premium ad inventory
Withholding of premium ad inventory from RTB market
Displacement of publisher ad sales divisions and ad networks
Noncompliance of ad placement standards
Fear of automated, algorithmic process replacing human interaction
Figure 17: Drivers and Barriers of Growth of RTB Ad Market
In 2012, RTB advertising revenues will reach $1.6 billion (Figure 18). Revenue growth will accelerate, rising
to $6.9 billion in 2017, representing a 34% five-year CAGR. Within the forecast period, the U.S. RTB market
represents the vast majority of RTB ad expenditures, accounting for 98% to 99% of total revenues. The
Canadian RTB industry is in its formative stages, with few display ad impressions yet bought and sold in realtime. According to industry estimates, the Canadian RTB ad market lags 12 to 18 months behind the U.S.46
45
Referenced in 1.3.1 Data Sources
Microsoft Advertising, May 2012, Behind the Buzz: When Will Real-Time Bidding Break Big in Canada? (Accessed
June 2012) http://advertising.microsoft.com/canada/en/WWDocs/User/enca/ForAdvertisers/RTB%20Cdn%20Whitepaper%
20-%20FINAL%20PRINTED.pdf
46
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RTB Online Display Advertising Revenues - North America
2012 - 2017
$8.0
6.9
$7.0
$6.0
5.7
In Billions
$5.0
4.6
$4.0
$16.8
$15.1
$3.0
$2.0
3.6
2.7
1.6
$1.0
$0.0
2012
2013
2014
2015
2016
2017
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Figure 18: RTB Online Display Advertising Revenues North America 2012-2017
Real-time Bidding Online Advertising Revenue Forecasts in
North America (N.A.) 2012 – 2017
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Figure 19 measures RTB market share in relation to total Internet ad expenditures and as a component of
online display ad figures in N.A. At present, RTB ads are all display ads; therefore, the revenue projections
place RTB revenues as derivative of online display ad earnings. Parks Associates recognizes that online video
and mobile ad avails are moving to RTB markets; however, the forecast addresses RTB online display ads
exclusively because the largest share of RTB ad revenues are earned in online display markets.
In 2012, the forecast pegs total online display advertising at $13.7 billion, with those revenues accounting
for approximately 35% of total Internet advertising expenditures in N.A. Through the five-year forecast
period, online display advertising revenues will increase in line with total Internet advertising spend, rising
to $20.1 billion. Of total online display advertising, RTB revenues account for 12% in 2012 but its share will
increase to 34% by 2017.
Total Internet, Online Display, and RTB Advertising Revenues in N.A.
2012-2017
$25.0
INTERNET ADVERTISING REVENUE - N.A.*
(all formats)
$20.0
$51.6
$56.8
$54.6
$47.5
$42.6
In Billions
$15.0
$37.5
$10.0
$13.6
$13.2
INTERNET DISPLAY
ADVERTISING
REVENUES- N.A.*
$6.9
RTB ONLINE DISPLAY
ADVERTISING
REVENUES- N.A.
$13.7
$13.2
$12.4
$12.0
$5.0
$0.0
$1.6
2012
$2.7
2013
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
$4.6
$3.6
2014
2015
$5.7
2016
2017
* Parks Associates estimates benchmarked against Interactive Advertising
Bureau/Pricewaterhouse Coopers, Magna Global, and ZenithOptimedia ad revenue
projections.
Figure 19: Total Internet, Online Display, and RTB Advertising Revenues in N.A. 2012-2017
Real-time Bidding Online Advertising Revenue Forecasts in
North America (N.A.) 2012 – 2017
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6.0 MARKET IMPLICATIONS & RECOMMENDATIONS
MARKET OUTLOOK FOR BUY-SIDE STAKEHOLDERS
As buyers realize the benefits of RTB including cost efficiencies, reduced ad waste, scalable reach,
transparency, and control, ad spend will quickly transfer from traditional display advertising to RTB
platforms. The ability to cherry pick the placement of targeted, exclusive ad impressions is an attractive
value proposition for ad buyers as it improves campaign effectiveness and strengthens agency relations with
brand advertisers. Since just 2009, ad agencies have quickly adapted to the RTB process. More and more,
ad buyers are realizing improvements in online display ad campaigns when they are purchased in automated,
real-time markets. As even more ad buyers become comfortable with RTB for online display ads, they will
apply these ad buying systems to online video, mobile, and social media.
MARKET OUTLOOK FOR SELL-SIDE STAKEHOLDERS
Better yield management and increased CPMs will encourage publishers to allocate more remnant and
premium online inventory to the RTB ad market. Publishers also look to monetize ad inventory via SSPs
and ad exchanges as a way to reduce the sharing of revenue with ad networks. However, they must balance
employing RTB ad sales strategies with protecting their own direct sales divisions.
The next frontier is extending sell-side RTB services to online video, mobile, and social media markets.
Facebook’s newly launched ad exchange is a driving force through 2017 as the social network serves
approximately one-third of U.S. display ad impressions. The Facebook Exchange opens up a large source of
display ad inventory to the RTB market. Several other firms are set to capitalize on this burgeoning market as
well. Major online video advertising firm, SpotXchange launched an online video RTB solution in 2010 and
Nexage, a leading mobile ad exchange, offers RTB technology for mobile buy-side and sell-side platforms. In
early 2012, Google expanded its RTB footing with the integration of AdMob’s mobile ad inventory with the
Doubleclick Ad Exchange. While agency demand for cross-platform ad synergies drives the development and
adoption of RTB sell-side platforms for emerging media, Parks Associates predicts these markets will remain
small, with growth contingent on the maturation of the online display RTB ad market.
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CHALLENGES
Despite the advantages of RTB, industry stakeholders will face obstacles in pursuit of market expansion.
New media consumption, multi-device adoption, and ad technology advancements produce complex
business environments. Their markets are difficult to comprehend and navigate. Agency executives
consistently struggle to understand the inner workings of new forms of digital media and their impact on
media campaigns. The lack of understanding creates uncertainty, and often breeds distrust, among ad
buyer communities, which results in the reluctance to experiment with emerging advertising platforms.
A major fear among the demand-side and sell-side players is that automated media buying technology
and processes will replace human touches. The people versus the machine concern may slow RTB ad
inventory from entering the marketplace as well as the redistribution of media budgets from traditional
online display to RTB ad markets. While agencies argue RTB technology will not replace ad planners and
buyers because of deep rooted personal and network connections, history shows that machines will at the
least shift many responsibilities of today’s employees. Many RTB-enabled systems require only one or two
employees to do work typically performed by 20 people. These cost efficiencies may incent agencies to
reduce head count in favor of adopting automated ad buying/planning technology infrastructures.
Until recently, some online publishers were leery of RTB technology platforms based on the belief that RTB
sell services (e.g., SSPs and ad exchanges) potentially damage direct sales efforts. Some publishers fear the
automated RTB process devalues ad inventory and degrades content owner and/or publisher brand equity.
On the other hand, many publishers are growing more comfortable with RTB ad exchange methods and are
placing more unsold and premium ad inventory into RTB systems to capture larger market shares. Based on
Parks Associates’ interviews, it is unlikely that RTB will compromise internal sales units. Executives predict
that remnant ad impressions will continue to be sold via RTB (via indirect relationships with buyers), but
maintain that the bulk of direct, premium ad inventory will be sold by direct sales teams. The bottom line is
that RTB supplements publisher ad revenues and these third-party ad seller relationships are essential, as
even the most successful publishers are unable to sell out all ad inventories at any given time.
Campaign effectiveness is directly tied to how, when, and where an ad is viewed by consumers. More than
ever, agencies have to deal with the issue of ad viewability and its impact on campaign effectiveness. Ad
agencies struggle to verify viewable ad impressions as well as the length of time the ad remained in the
consumer’s view. For instance, some online display ads are served below the fold (i.e., shown at the bottom
of the computer screen) and users are unable to see the ad without scrolling down the webpage. In these
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instances, an agency still pays full price for the ad(s). Consequently, agencies usually place restrictions on
below the fold ad placement to eliminate wasteful ad spending. Such challenges still exist for RTB-based ad
buying and selling processes. The need for quality control of RTB placements increases due to automation.
DoubleVerify launched a product, AdView in May 2012 to address this industry challenge.47
RECOMMENDATIONS
Ad Agencies
Educate your personnel in the nuances of emerging ad platforms and technologies in order to benefit from
advanced advertising technology and prove agency value for major brands. The alternative to investing in
this education is vulnerability to agencies that do understand the platforms and technologies.
Educate clients about the value of RTB, experiment with new media and technologies, and adapt their
business models accordingly. This helps keep both the agency and its clients on the high performance edge
of possibilities.
Work closely with ad monitoring and verification solution providers, such as DoubleVerify or adsafe, to
ensure RTB campaign accountability. Going forward, the pressure from the agency client side to hold
agencies accountable for every single ad impression purchased will intensify. Over-charging and overcounting of ad impressions, or worse, mismanagement of client’s media funds will result in lost contracts
and even termination of business relationships.
Guarantee appropriate brand exposure and offer accountability for every ad impressions bought and
served to gain new clients. All these tasks require agencies to make informed buying decisions, therefore
partnerships with ad monitoring and verification solution providers are critical to agency’s future success.
Publishers
Explore private ad exchange opportunities but at the same time maintain adequate ad inventory to meet
agency demand via direct sales channels or third-party ad networks/exchanges. Private ad exchanges are
an attractive option for publishers seeking to eliminate sales channel conflicts but for the near future will
47
AdView is a technology that monitors and verifies the viewability of an ad impression to preserve brand exposure
and improve ad viewability
According to the IAB and Making Measurement Make Sense (3MS) guidelines, an ad is considered viewed when at least
50% of the ad is displayed on a user’s browser window for at least one second.
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remain as a complementary sales channel compared with direct ad sales. Despite the control benefits of
private exchanges, publishers must keep strategic partnerships with third-party ad exchanges and SSPs
intact to maximize ad sales – leveraging all available ad sales channels to fill 100% of ad inventory, 100% of
the time.
Ad Networks
Redefine business roles and overall functionality within online display advertising by adding RTB
technology components to embrace market evolution. Integrating RTB services for both the buy-side and
sell-side enables ad networks to better promote current service offerings and enhance product value for ad
agency and publisher partners. Ad networks that continue to rely on old business models and technologies
will find themselves displaced by RTB ad platforms.
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RESOURCE BOOK
Appendix A
Company Profiles: Media buying desks
MEDIA BUYING DESKS
Ad Agency
Product & Description
Xaxis: Proprietary audience buying
technology platform used by WPP’s
GroupM agency partners, Maxus, MEC,
MediaCom, and Mindshare
Platform Integration
Universal and media
agnostic



Company Notes
Company Notes
Founded in 2011
Digital audience buying platform for online display, online video, mobile and social
Broad portfolio of audience buying capabilities that have been independently
developed and optimized in various parts of GroupM and WPP Digital including B3,
targ.ad, GoldNetwork, GroupM DSP, and the GroupM Marketplace
 Executed 4,000+ campaigns for 700+ clients in 13 markets around the world
including North America, UK, Europe, and Australia
 Received Most Compliant Platform Award by DoubleVerify
Accuen: Digital media acquisition
 Social media platform,
platform that combines media, data,
BLiNQ Media
technology, and strategy to buy
 AOL’s AdLearn Open
targeted audiences
Platform (AOP)
 TubeMogul, online
video ad network
 Founded in 2009
 Agencies within Omnicom Group are not required to use Accuen; however, it is
strongly preferred.
Audience on Demand
 Google Doubleclick ad
(AOD): Centralized online
serving and ad
display audience
exchange
management marketplace  AdMob for in-app
and systems integrator,
mobile advertising
which includes bid management technology and data
partnerships. AOD is used by Publicis Groupe’s VivaKi
agencies - Starcom MediaVest Group, ZenithOptimedia,
Razorfish, and Digitas.


Company Notes



Resource Book
Founded in 2008
Live in nine countries including the U.S., U.K., China, Spain, Sweden, Australia,
France, Netherlands and Germany
78+ billion ad impressions served on 13,500+ campaigns on behalf of 300
advertisers
Received Best in Audience Targeting Award by TARGUSinfo
Received Most Compliant Platform Award by DoubleVerify
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MEDIA BUYING DESKS
Ad Agency
Product & Description
Platform Integration
Cadreon: Media buying desk
with three core service areas Audience Discovery, Audience
Acquisition, and Audience Verification


AOL’s AdLearn Open
Platform (AOP)
Visible World –
advanced TV ad
technology platform


Company Notes
Company Notes
Company Notes
Founded in 2009
Mediabrands Audience Platform is a standalone business unit within the IPG
Mediabrands family, which includes the digital practices of Reprise Media,
Cadreon, Ansible Mobile, and Spring Creek Group
 Operates from 6 different cities over 4 different countries
 50+ billion ad impressions served
 Received Most Compliant Platform Award by DoubleVerify
Audience Optics™: Independent media buying and optimization platform that
integrates strategy, technology, and execution to help agencies in exchange-traded
media and audience targeting. Platform combines the capabilities of a demand side
platform (DSP) and a data management platform (DMP)
 Founded in 2010
 Delivered its 3,000th fully-managed media campaign in Q4 2011
adap.tv, adBrite, AdMeld,
Audience Investment
Google DoubleClick,
Management (AIM):
AppNexus, OpenX, Nexage,
Proprietary real-time bidding for display, video and
Right Media, Yahoo!, RMX,
mobile advertising with data management, custom
Rubicon and Improve
audience targeting and proprietary modeling solutions
Digital
 Founded in 2009
 Independent advertising technology funded by Groupo ISP (Barcelona, Spain)
 Offices in the U.S., U.K., Spain, Netherlands, Mexico, and Brazil
 In 2010, received the DPAC Award for Best Targeting Technology
 In 2011, recognized for Most Effective Online Campaign by Institute of
Practitioners in Advertising (IPA) London
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Resource Book
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Appendix B
Company Profiles: Demand-side Platforms (DSPs)
DEMAND-SIDE PLATFORMS (DSPS)
Company
Product & Description
AppNexus technology designed to power both
buy- and supply-side platforms
Company Notes
Company Notes
Company Notes
Company Notes
Microsoft Advertising Exchange,
Google Ad Exchange, Rubicon
Project, OpenX, Admeld, Pubmatic,
BrightRoll Exchange (BRX)
 Founded in 2007
 RTB launch in 2010
 Only ad server built specifically for the real-time advertising business
 In 2010, announced integration with BrightRoll Exchange to offer RTB for online video
DX3: Digital marketing management platform
Wide-range of inventory,
providing campaign management, audience
technology, and service provider
management, attribution management, cross
partners
channel media buying, targeting, and advanced
reporting
 DX Mobile
DX Brand
 DX Video
 DX Social
 Founded in 2007
 RTB launch in 2009
 Recently acquired Mexad, a leading European demand-side platform service provider
with local digital marketing expertise in Germany, UK, Spain, France, Italy and Brazil
 Received Most Compliant Platform Award by DoubleVerify
Bid Manager: Self-service, universal real-time
Integrates across every ad
bidding buying platform for online display media
exchange and online aggregator
including DoubleClick, Yahoo,
Google, AdBrite, Microsoft and
Right Media
 Founded in 2007
 RTB launch in 2010
 Acquired by Google in June 2010; part of the DoubleClick division
 Received Most Compliant Platform Award by DoubleVerify
TerminalOne: Industry’s first DSP providing full
Wide-range of inventory,
service solution for media buying, data
technology, and service provider
management, and analytics
partners




Resource Book
Platform Integration
Founded in 2007
RTB launch in 2010
Offices in New York, Chicago, Boston, Los Angeles, London, San Francisco
Signed a joint-venture agreement with Publicis Groupe to provide services for
Switzerland, Germany and Austria ad markets
Received Most Compliant Platform Award by DoubleVerify
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DEMAND-SIDE PLATFORMS (DSPS)
Company
Company Notes
Company Notes
Company Notes
Resource Book
Product & Description
Platform Integration
The DESK: Integrated buying suite enabling marketers to buy all types of online media
from a single platform
The ADSERVER: Stand-alone tracking and reporting platform providing a holistic view of
the purchase funnel, all the way from impression, to click, to conversion.
 Founded in 2009
 RTB launch in 2010
 Turn Media: Manages budgets, audience
 Wide-range of inventory,
segments, context-targeting strategies, and
technology, and service
frequency caps across all channels from a single
provider partners
application.
 Integrated with AT&T
 Turn Audience: Targeted data management
AdWorks
platform (DMP) that connects with leading DSPs
 Cross Channel: Creates audience segments
across video, online display, and mobile
 Company founded in 2004
 RTB launched in 2009
 Available in North America, South America, Latin America, and Europe
Origin Digital Marketing Hub
Wide-range of inventory,
 Origin Media DSP: Utilizes targeting and
technology, and service provider
analytic capabilities provided by Patented
partners including Atlas, BlueKai,
Decision Engine (POE) to expand and optimize
Eveonline, CCP Games, Delta.com
audience segments
 Origin Data Management Platform (DMP):
Enterprise DMP integrated with POE decision
engine; executes complex logic and export
instructions to multiple digital channels,
including ad servers, content management
servers, chat systems, email systems, and DSPs
to coordinate target messages and restrictions
in real time
 Origin Analytics
 Founded in 1999
 RTB launch in 2010
Full Service: Full CRM data integration, strategy
Google, Rubicon, Admeld, OpenX,
development, Boolean retargeting, trafficking,
AppNexus, AdBrite, PubMatic
management, reporting, and optimization services
tailored to campaign goals
Self Service: Access to entire platform including
DMP to reporting suite
Data Management and Analysis: Custom solutions
including CRM-DMP integration services,
proprietary treatment & control testing, and serverside cookie stores for mapping audience and 3rd
party data
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DEMAND-SIDE PLATFORMS (DSPS)
Company
Company Notes
Product & Description




Platform Integration
Founded in 2005
RTB launch in 2009
One of the first bidders integrated into the Google Ad Exchange in 2009
Over 10 billion ad impressions managed daily
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
Resource Book
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Appendix C
Company Profiles: Data Management Platforms (DMPs)
DATA MANAGEMENT PLATFORMS (DMPS)
Company
Product & Description



Company Notes
Contextual Data
Brand Protection Data
Audience Interest Data
Company Notes
Company Notes
24/7 Real Media, adBrite,
Adap.tv, BrightRoll, Collective,
DataXu, Dedicated Media,
FreeWheel, Fox Digital Media,
Interclick, Insight Express,
MediaMath, Meebo,
Omnicom, Tremor Video,
TubeMogul, YuMe, Expedia,
Forbes
Launched in December 2007
maX
Adap.tv, BrightRoll, AppNexus,
Adaptive Audience Intelligence: Data collection,
Google Display network,
analysis and optimization methodologies; recognizes
Collective, Interclick,
the characteristics of best performers and builds a
MediaMath, PubMatic, Turn,
robust model of targets and updates attributes in real Videology, Invite Media,
time
Alliant, Bizo, Nielsen, Forbes,
DataLinX Platform: Enables publishers and data
Acxiom
owners to manage access to data through a system of
configurable “plugs” and helps reduce the website
impact of pixels by monitoring site latency and
leveraging pixel-free integrations
Premium Data: Premium online behavioral and
purchase intent data verified by comScore
 Launched in 2007
 Offline and custom modeled data sets across 350 million online consumers worldwide
Crowd Control: Allows clients to organize and evaluate
Alliant, Acxiom, Bizo,
target audiences to monetize data and find the right
TARGUSinfo, BrightTag,
audience for online marketing campaigns.
LiveRail, AppNexus, adBrite,
Adap.tv, Audience Science,
Interclick, Xaxis, Videology,
Turn
Launched in 2008
Adobe Audience Manager (formerly Demdex):
Enterprise-level technology that manages advertising
data to action multisource visitor profiles into complex
Resource Book
eBay, Admeld, TubeMogul,
AppNexus, Bizo, Dedicated
Media, adBrite, Pubmatic
Launched in 2006
BlueKai Data Management Platform: Open platform for
publishers, marketing organizations, and ad agencies to
evaluate private 1st party data, create audience
segmentation, and reach target audiences.
BlueKai Data Exchange: Enables partners to buy and
own data to boost ad targeting across media.
Publishers can also participate as data sellers to
increase revenue.
Company Notes
Notable Industry Alliances
Acxiom, Bizo, datalogix,
eXelate, TARGUSinfo
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DATA MANAGEMENT PLATFORMS (DMPS)
Company
Company Notes
Product & Description
multi-partner advertising distribution
 Demdex launched in 2009
 Adobe acquired Demdex in 2011
Ad Advisor, OnDemand Insight: On-Demand
Identification, On-Demand Verification, On-Demand
Scoring, On-Demand Location
Notable Industry Alliances
Dealix, Leads360, LeadPoint
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
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Appendix D
Company Profiles: Supply-side Platforms (SSPs)
SUPPLY-SIDE PLATFORMS (SSPS)
Company
Product & Description
PubMatic’s Ad Auction Engine: Real-time mediaselling platform
Company Notes
 Founded in 2006
 RTB launch in 2009
 Offices in the US, Europe, and Asia
 Purchased MobiPrimo in March 2012
Platform access to Demand Side Platforms (DSPs),
agency trading desk, and ad networks
Offers real-time analytics
Clients
The Huffington Post, eBay, United
Online
MSNBC, TV Guide
The Weather Channel, NBC
Universal, Answers.com
FOX News, IDG TechNetwork
Discovery



Company Notes
Company Notes
Company Notes
Company Notes
Founded in 2007
RTB launch in 2009
Headquarter in New York City with offices in San Francisco, London, Berlin, and
Toronto
 Acquired by Google in 2011
 First supply side platform to introduce the private exchange and integrate mobile
support
For sellers: Inventory sold to external demand sources at real-time in auctions held on
Right Media's exchange. External supply sources can make inventory available on a single
impression basis
For buyers: Inventory purchased from external supply sources on a single impression
basis using Right Media's prediction algorithm. External buyers can use their own bid
valuation technology to decide whether to bid on the impression placing their bid into an
auction.
Founded in 2006
RTB launch in 2012
AppNexus technology is designed to power both buyMicrosoft Advertising Exchange,
and sell-side business models and works with top-tier
Google Ad Exchange, Rubicon
data and technology partners including ad networks
Project, OpenX, Admeld,
and demand-side platforms
Pubmatic, BrightRoll Exchange
(BRX)
Founded in 2007
RTB launch in 2010
Only ad server built specifically for the real-time advertising business
REVV: Real time trading platform for publishers
ABC, Forbes, NBC Universal
Time Inc., The Tribune
Company
 Founded in 2007
 RTB launch in 2010
 Headquarter in LA, with offices in New York, Seattle, London, Paris, Hamburg and
Sydney
 Acquired Fox Audience Network (FAN) in 2010
Source: Real-time Bidding: The Online Ad Exchange © 2012 Parks Associates
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Appendix E
Company Profiles: RTB Ad Exchanges
RTB AD EXCHANGES
Company
Parent Company
Company and RTB
Launch
Yahoo!
(Acquired in 2007)
Late-2006
RTB launch in 2012
Private
2008
RTB launch in 2009
Private
Formerly
ADSDAQ/Contextweb
Microsoft Corp.
(Acquired in 2007)
Formerly AdECN
Google
Metrics
More than 300,000 active buyers and
sellers, including Yahoo!, and more than
11 billion ad impressions processed per
day
Around 1 billion ad impressions
exchanged per day
Reach: 154 million unique visitors48
2009 (ADSDAQ)
RTB launch in 2010
Around 8 billion ad impressions per month
2009
RTB launch in 2011
RTB launch in 2009
OpenX Limited
2007
RTB launch in 2009
Facebook Exchange
RTB launch in 2012
Average eCPM increase of 130% across
unsold inventory pool compared with
directly booked deals with ad networks
Processed more than 1 trillion ad
impressions in 2011
More than 200 billion ad transactions per
month
700% revenue growth in 2011 versus 2010
Integrated with Samsung’s AdHub
Service announcement in June 2012
Partnering with eight DSPs including
Triggit, Turn, DataXu, MediaMath,
AppNexus, and TheTradeDesk
Source: Real-time Bidding: The Online Ad Exchange
© 2012 Parks Associates
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Appendix F
Company Index
[
E
[x+1] · 21, B-46
eXelate · 23, C-48
A
F
Accordant Media · 18, 36
Facebook · 5, 26, 29, 30, 39, E-51
adBrite · 29, E-51
Facebook Exchange · 30
Admeld · 20, 23, 26, 27, 30, 31, B-45, B-46, C-48, D-50
Fox Audience Network (FAN) · D-50
AdMob · 39, A-43
adnetik · 18, A-44
Adobe · 23
adsafe. · 41
G
Google · 7, 20, 21, 23, 26, 27, 28, 29, 39, A-43, A-44, B-45, B-
AppNexus · 8, 20, 21, 23, 26, 27, 29, 30, 31, 33, A-44, B-45, B46, C-48, D-50, E-51
B
BlueKai · 7, 23, B-46, C-48
BrightRoll Exchange · 20, B-45, D-50
46, B-47, C-48, D-50, E-51
GroupM · 17
I
IDG TechNetwork · 31
Interpublic Group of Cos. · 18
Invite Media · 21, B-45
C
Casale Media · 27
CBC/Radio-Canada · 31
L
Lotame · 23, C-48
Comcast Corp · 31
D
M
MediaBank · 21
DataXu · 20, 23, 29, 30, 36, C-48, E-51
MediaMath · 21, B-45
Donavan Data System (DDS) · 21
MediaOcean · 21
DoubleClick Ad Exchange · 29, E-51
Microsoft · 20, 29, 36, B-45, D-50, E-51
DoubleVerify · 17, 20, 34, 41, A-43, A-44, B-45
Microsoft Advertising Exchange · 29, E-51
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Microsoft Corp. · 29, E-51
S
N
Shaw Media · 31
SpotXchange · 20, 39
NBCUniversal · 27, 31
News Corp. · 26
T
Nexage · 39, A-44
TARGUSinfo · 23, C-49
O
The Weather Channel · 27, 31, D-50
Time Warner · 31
Omnicom · 17, 18, 23, A-43, C-48
Triggit · 20, 23, 29, 30, B-46, E-51
OpenX · 20, 29, A-44, B-45, B-46, D-50, E-51
Turn · 20, 21, 23, 29, 30, 36, B-46, C-48, E-51
Turn Media · 21
P
V
Proximic · 23, C-48
Publicis Groupe · 18, 23, A-43
VivaKi · 18
PubMatic · 7, 25, 26, 32, 36, D-50
PulsePoint · 29, E-51
Q
quadrantONE · 31
R
Right Media · 26, A-44, B-45, D-50
W
WPP · 16, 17, 18, 19, A-43
X
Xaxis · 16, A-43
Y
Right Media from Yahoo! · 26, 27, 28, 29, D-50, E-51
Rogers Media · 31
Yahoo! · 26, 27, 28, 29, A-44, E-51
Rubicon Project · 26, B-45, D-50
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