AdMonsters European Publisher RTB Report

Transcription

1 AdMonsters European Publisher RTB Report 2013 Sponsored by

2 introduction 01 In digital advertising circles, no three-letter acronym is used more often than RTB. In the four years since it emerged, Real- Time Bidding has changed how digital advertising is bought and sold. RTB systems give agencies and advertisers better control of their ad buys and costs, and this increased control for the buy side has driven massive investment, spawning a number of new players in the online advertising ecosystem. Demand Side Platforms (DSPs), third-party data providers, data management platforms (DMPs), and other new intermediaries have all followed the emergence of RTB in an attempt to maximize the effectiveness of ad spending. In Europe, the shift to real-time trading of media has taken hold and is only projected to grow. Karsten Weide, Program Vice President, Digital Media and Entertainment, International Data Corporation (IDC) states in the report Real Time Bidding in the United States and Worldwide , RTB-based sales in Western Europe (WE) will grow from $227 million in 2011 to $2.5 billion in 2016, at a combined CAGR of 62%. The market share of RTB of display advertising spending at large will grow from 3% to 19%; RTB s share of indirect sales will expand from 8% to 52%. 1 RTB-Based Display Ad Sales as a Share of Total Display Ad Sales: percent (%) US UK France Germany RTB-Based Indirect Ad Sales as a Share of Total Indirect Ad Sales, percent (%) US UK France Germany Weide goes on further to predict: The three major European markets [United Kingdom, France, Germany], while today roughly at about half the RTB penetration level of the United States, will begin to catch up toward the end of the forecast period, with the United Kingdom almost equalizing the United States. 2 Infectious Media Co-Founder & COO Andy Cocker stated in the company s Summer 2012 European RTB Insight Report, This buying method is now the first choice for online performance campaigns, and major advertisers are starting to issue RFPs specifically for programmatic media buying and analytics services, something that was unheard of 12 months ago. 3 But there is a wrinkle: the publisher. To quote Weide, The primary key to the future of RTB is publisher adoption. If publishers don t make sufficient amounts of inventory available, RTB growth could be stunted. 4 Publishers Slower to Adopt RTB While advertisers have embraced RTB, publishers have been slower to adopt it. A Digiday study conducted with PubMatic in March 2011 found that just 20% of publishers offered ad placements via real-time bidding on their sites, compared with 62% of advertisers who had tried RTB at that point. 5 To date, European publishers have been even more cautious. RTB does offer substantial benefits for publishers. In a previous white paper sponsored by PubMatic, IDC s Weide sums up the benefits that RTB offers publishers: 01 Greater Demand For publishers, RTB creates a bigger, more liquid marketplace with more bidders and greater demand. Greater demand improves inventory yield by leaving less inventory unsold and by increasing cost-per-mille (CPM) rates (i.e., increasing revenue per impression) Better Inventory Management Beyond higher CPM rates, RTB can also increase the efficiency of managing ad inventory that they are unable to sell directly (aka premium inventory). According to Google, the overhead required to manage display ad campaigns can consume 8%-28% of the campaign budget, compared to only 2% overhead for 1,2 Weide, Karsten, IDC White Paper, Real-Time Bidding in the United States and Worldwide, October Infectious Media European RTB Report, October Weide, Real-Time Bidding PubMatic / Digiday Study, March 2011 ( 6 Weide, Karsten, IDC White Paper, Real-Time Bidding in the United States and Western Europe, October 2011.

3 introduction 02 TV ad campaigns. Unless this inefficiency is corrected, advertisers and agencies will remain very reluctant to shift additional ad spending to digital. 7 More specifically, without RTB, publishers have to daisychain multiple networks in an attempt to optimize CPMs. Linking multiple networks in series is not only fragile but also complicated, resulting in greater ad and page serving latency, which reduces inventory and creates discrepancies. Even more problematic is that it s impossible to optimize pricing, since a serial process can only provide visibility into a single offer at once. The combination of these two factors means that potentially high-value impressions will often yield poor ad quality and sub-optimal revenue. 03 Programmatic Buying RTB is part of an overall shift towards programmatic buying and selling, which has the potential to greatly increase the efficiency of publishers ad operations and sales processes. Programmatic buying allows buyers and sellers to make transactions without the manual steps of negotiating rates, signing insertion orders, trafficking campaigns and reconciling invoices. These and other benefits are nevertheless not seen by all publishers as substantial enough to offset the perceived and real risks of RTB. These risks include, to varying degrees: data leakage, sub-standard ad quality and sales channel conflict. Publishers have therefore been cautious in fully implementing RTB, fearful of devaluing their premium inventory and relinquishing control. Supply Side Platforms To some extent, Supply Side Platforms (SSPs) are intended to alleviate some of these concerns for publishers, particularly the ones centered on pricing dilution. SSPs offer publishers detailed analytics on their inventory, as well as controls to screen out undesirable advertisers and low-quality ads. SSPs have also begun to offer private marketplace features giving publishers specific control over what inventory is made available to which buyers and at what price and enables direct connections with buyers who are using automated buying systems. However, publishers are still in the process of testing SSPs and determining how they fit into their technology stack and digital monetization strategy. Slow Adoption of RTB May Threaten Growth of EU Digital Ad Spending Since so many publishers remain cautious about making fuller use of RTB, we cannot yet judge the full impact of RTB and programmatic buying. This applies even more to European publishers versus those in the U.S. This wait and see attitude on the part of European publishers may negatively impact the growth of digital ad spending in Europe. As agency holding companies like WPP develop their buying platforms and shift more of their budgets to programmatic buying, they will be inclined to spend more in areas where they can integrate their platforms directly and buy inventory most efficiently. Publishers who do not offer inventory through programmatic channels may risk being left behind. 7

4 research methodology AdMonsters and PubMatic wanted to investigate further whether there are any issues specific to the European market that are affecting publishers adoption and use of RTB. Are European publishers experiences with, and attitudes toward, RTB similar or different from their counterparts in the U.S.? In March 2012, AdMonsters, with the support of PubMatic, distributed an online survey to its European contacts; respondents were limited to those working for a publisher. 03 & results The survey was then followed up by in-depth interviews with experienced RTB users in the U.S. and Europe by Rob Beeler, AdMonsters Vice President of Content and Media. While the number of individuals who completed the survey was not large enough to be statistically representative of the entire European digital publisher community, the research yielded some interesting insights. Based on their responses, AdMonsters grouped survey participants into three categories: 01 Not in Play: European publishers who are not currently using RTB. 02 Testing the RTB Waters: publishers who are only using RTB to sell inventory that they are unable to sell through traditional sales channels 03 All In: publishers who consider RTB as more than just a means to fill unsold non-premium inventory and who are exploring using programmatic channels to sell other forms of inventory

5 not in play 04 Other survey respondent comments from this group focused on the limitations of the total European market s inventory: RTB demand is not big enough no competition. Not big enough inventory yet. The Not in Play group consists of European publishers who are not currently using RTB. Interestingly, most of these publishers recognize the potential benefits of RTB, especially for monetizing inventory that they are unable to sell via traditional direct sales methods. However, they have held off either because their concerns about possible risks of RTB outweigh the possible benefits, or because they feel they lack the resources and knowledge to successfully implement RTB-based systems The following are some representative comments from Not in Play survey respondents: Not ready for it yet. RTB is just another route to market for advertisers that want to buy in this way. It is too early to see advantages. Many European publishers, like these particular respondents, are not equipped to tackle some of the complexities inherent in developing a strategy around RTB and automated trading. Based on AdMonsters experience, a publisher typically needs an evangelist someone to help the rest of the organization understand the opportunities and challenges in pursuing this method of doing business. For many European publishers with smaller, more junior ad operations teams, such an evangelist does not exist or hasn t yet been identified. In some respects, it is probably wise for them not to pursue RTB without the right level of commitment. However, to remain competitive, publishers need to be engaged in these fundamental changes in how media is being bought and sold, either by selecting the proper partners or by developing internal resources. Another factor hindering adoption is that many European publishers are not seeing enough buyers competing for impressions through RTB, resulting in yields that are too low to warrant making impressions available. This may in part be a reflection of the fragmentation of the European market, which operates as many smaller marketplaces with their own supply and demand issues. When asked what a RTB solution would need to provide to increase the amount of inventory they made available, this group s most common answers were higher yields, followed by private marketplace capabilities and dynamic pricing floors. While the responses by this group may not be representative of the entire Not in Play group, it is interesting that some of the respondents said that they want such advanced RTB features as private marketplace capabilities and dynamic pricing floors. Perhaps these individuals feel that until these aspects are more advanced and proven, it s best not to do anything. Still other Not in Play publishers are selling enough of their inventory without RTB that they don t see any benefits in switching tactics: We have a very effective sales strategy in place that is set to eliminate unsold non-premium inventory from our network by the end of Reactions from the Experts Lyndsi Plummer, Advertising Technology & Partnerships Manager at BSkyB, says: Not taking part in RTB at all isn t necessarily wrong it could be those that are waiting for answers as to how to manage RTB before jumping on the bandwagon. If the envelope continues to be pushed, those who are not currently taking part may be forced to jump on the bandwagon or be left behind. 8 8 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 6/17/2012.

6 not in play 05 Rob Brett, Head of Data Trading at Future Publishing Limited in the UK, suggests that publishers can also experiment with RTB by buying campaigns on other sites: Just because you re a publisher, you do not have to supply inventory. You can always look to be a buyer. Leverage your own data to buy campaigns and drive value to campaigns offsite. In this way, they can familiarize themselves with and benefit from RTB, without touching their own inventory. 9 However, Eric Latrielle, Directeur, Opérations et Innovations Publicitaires Numériques, at TC Media, urges all publishers even the ones who sell sufficient inventory without RTB to try it: Some of the publishers have premium sites and they are not exposed to the reality. I would probably say to not stay blind and at least use it for remnant Use RTB as a remnant [strategy], test it, explore what you can do and how advertisers will react. 10 also needs to look at RTB from a total operations standpoint. I fear that publishers who haven t gotten involved with RTB because they don t have the resources will be left behind. There is often someone within the sales or operations teams with the right level of understanding of the relevant business and technology issues who can spearhead such an effort. I recommend publishers grow this resource internally as well as find the right partners to execute on the strategy. Publishers who see the risks outweighing the rewards of doing anything RTB-related will miss certain opportunities. There will be advertisers who, for the sake of efficiency, will want to use a programmatic buying approach and who will therefore exclude publishers who offer no means to transact in this way. This especially applies to niche sites whose business offering is their audience. Publishers risk being cut off from programmatic buying if these audiences can be purchased elsewhere more efficiently. AdMonsters Rob Beeler agrees and points out that this group 9 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/23/ Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/9/2012.

7 testing the RTB waters 06 Yet, RTB Testers are reluctant to open up more inventory to RTB. From their perspective, the primary disadvantages are: 01 The possibility of data leakage (third parties gaining access to user data) 02 Low quality ads that reflect negatively on the site s brand. Creatives also need to go through a QA process which can be time consuming and difficult based on the volume of ads to be checked. RTB as a way to buy and sell media is still seen by many (if not most) European publishers as strictly a way to fill unsold non-premium inventory. Therefore, it is not surprising that most of the survey respondents using RTB fall into this Testing the Waters group. This group limits their use of RTB either deliberately because they fear negative impact on premium inventory, or because they do not understand the full potential of RTB to increase ad operations efficiencies. When asked what they view as the main advantages of RTB, this group of respondents most often focused on unsold inventory: Higher revenue from unsold inventory than other solutions Simplifies yield management of unsold inventory However, many survey respondents viewed RTB s impact on total revenue as relatively small: We have moved about 50% of our remnant across to RTB and it works great, increasing yields slightly, but it s such a small amount that it really makes no impact. It may increase slightly, but the revenue generated via our unsold inventory across our sites is around 5% of our overall display revenue, as we are still able to command high CPM s due to our vertical sites in key sectors. Until these rates drop, it doesn t make sense to expose more inventory via RTB. 03 Ad quality is still a concern; private floors with specific agencies offer a clearer understanding of details/campaigns. Completely low quality ads. Sales channel conflict, in that RTB competes with direct sales efforts Reactions from the Experts Michael Guerin, Syndication and Ad Product Manager at Salary. com, like many publishers, currently only uses RTB to fill unsold non-premium inventory. He believes the above concerns voiced by the survey respondents are valid, particularly the one regarding potential sales channel conflict: It is a valid concern. Why would a client pay a premium for direct sales when they can get the same inventory in the RTB market? 11 Guerin also points out that many of [RTB s] tools are inadequate. RTB moving towards complete transparency helps but does not aid in handling your overall inventory coming from multiple sources. Eric Latrielle, Directeur, Opérations et Innovations Publicitaires Numériques at TC Media, acknowledges that while cannibalization of direct sales force efforts can be a real concern, it can, and must be, dealt with intelligently: This is definitely a concern! Sales need to understand what it is and their role in it is really important. Use RTB with upfront commitment! 12 11, 12 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/9/2012

8 Future Publishing s Rob Brett weighs in on the sales channel conflict concerns: Ask yourself will a planner buyer at (x) agency base a 100k spend for a client on the off-chance they see some ads from (x) publisher? No. They need premium campaigns to build brand; they need RTB to help performance. There is some crossover but if you feel its cannibalizing, block them and ask for guaranteed spends. RTB is here to stay and is a powerful tool for both publisher and advertiser! 13 Is It Wrong to Simply Test RTB? With RTB being a relatively new technology, there are certainly potential pitfalls for the inexperienced, and an all in strategy may not be appropriate for every publisher. AdMonsters Beeler, however, is concerned that publishers may be missing the bigger picture: RTB is not just about unsold inventory it s about automation and efficiency. If publishers put only poor inventory into the RTB marketplace, they will get poor returns. 07 may be unrealistically high on what the return should be. And in fact, by measuring the success of RTB on such limited usage, these RTB testers may well be slowing the progress of the entire European ad industry toward a more efficient way of doing business. testing the RTB waters Future Publishing s Rob Brett agrees: I think this is fair to say however, I also think the value is too low currently in the U.S. we have seen an increase in RTB value as the concept of audience and data gets reflected in the RTB environment. Logic suggests the value will increase for UK and EU Publishers. 14 Adib Razzaq, Digital Integration & Automation Manager at News International, points out that: CPMs are currently at the wrong end, and the market is working from the bottom up. What is missing are publishers helping to assign value to impressions. 15 Publishers who are only testing the RTB waters with unsold non-premium inventory may conclude that RTB doesn t work because of their concerns proven or not about data leakage, ad quality, sales channel conflict and lower than expected CPMs. If the publishers test of RTB is to only use it to monetize unsold non-premium inventory, their expectations One anonymous respondent laid it on the line by stating: It s publishers who create this low value inventory if we did not create it, it would not be a problem, yet we send it to the SSPs every month and take the cheque! 16 13, 14 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/23/ Interview by Rob Beeler, VP of Content & Media, AdMonsters, 6/17/ Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/9/2012

9 all in 08 Currently we only have RTB in the UK. We are looking to roll this out to international. The main difference between this group and the RTB Testers is an pro-active strategic approach. Instead of simply using RTB to fill unsold inventory, All Ins focus on new relationships with buyers, assessing if their overall inventory has more value through first and third party data and then determining how that inventory will be bought and sold in the marketplace. Overall, All Ins see RTB as a step towards greater efficiency and a more programmatic method of transacting media. The third group of survey respondents the All Ins have already been successfully using RTB to fill unsold inventory and are looking for ways to increase its benefits. These European publishers are putting effort into understanding the full potential of RTB by exploring private marketplaces, extending audience reach, developing new skill sets within their team and connecting with media buyers in new ways. Queried on what they see for their RTB operations in the near future, here is a sampling of comments from the All In survey respondents: Agreements with trading desks. We are looking at ways of increasing price with the RTB area. We want to ensure our premium ad revenue can continue to grow alongside the introduction of audience segments and targeted advertising through RTB in an attempt to raise RTB CPM over current network prices. More and more questions and requests coming in from trading desks. The All In respondents in this survey look at the broader picture and tend to downplay other publishers concerns. Martin van der Meij, Yield Manager at Telegraaf Media Nederland and All In RTB user, comments: ALL objections come from misunderstanding. They [publishers] believe RTB is about remnant. Today it s fairer to talk about automated trading. This has nothing to do with second price auctions, etc, but with efficiency in the market There is no publisher in the world who doesn t want to do automated trading. That s about efficiency. Not about trading. 17 Regarding concerns about cannibalization, van der Meij has this to say: [RTB is] a shift of revenue. Basically from a traditional ad server into an automated ad server. That s not cannibalization [The] value of a publisher is set by its total revenue, not depending on the way a publisher gets that revenue. Automated trading can still be managed with a direct contact with the advertiser. You re just using a different route for the whole process. 17 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/9/2012

10 RTB & mobile: a promising opportunity 09 The rise of mobile advertising has created an interesting opportunity for publishers and those looking to buy mobile inventory through programmatic buying. Most survey respondents reported currently deriving some revenue from mobile, and they foresee an increase for next year. This dovetails with the growth of the mobile ad market in general: The mobile ad market is really gaining steam now, and is expected to double to $3.3 billion this year, hitting $20.6 billion by 2015, according to Gartner. It s things like realtime bidding, rich media and location-based advertising that are helping propel mobile ads. Mobile ads are still much smaller than online ads, but they re expected to grow much faster as advertisers see the potential in reaching people directly on the devices they carry with them all the time. 18 Online ad spending is following users onto mobile platforms, and as mobile inventory grows, mobile RTB is becoming a viable option. Jason Ciancette, President and Founder of Liquid Wireless, explains: Real-time bidding (RTB) has taken a strong hold in traditional online advertising by letting advertisers buy an audience as opposed to buying available inventory only. RTB is proven to deliver stronger ROI and make ad buys more effective. As the use of mobile handsets and tablets grows in popularity, more and more marketers are turning to mobile advertising as a means by which to reach consumers that are constantly on-the-go but marketers are of course also looking for a return on investment. Enter RTB for mobile Kim, Ryan, MoPub opens real-time bidding marketplace for mobile publishers, Gigaom.com, 10/27/ Ciancette, Jason, Understanding real-time bidding for the mobile marketplace, Direct Marketing News, 4/23/2012

11 what is holding back the RTB market in europe? When asked why Europe is lagging behind the U.S. in RTB adoption, survey respondents and experts offered these explanations: 01 Smaller online ad inventories due to the fragmentation of the European market, where advertising targets and content are often very localized. A limited supply of available online ad inventory seriously hampers the effectiveness of RTB for both advertisers and publishers. IDC s Weide says: RTB unfolds somewhat more slowly in the European markets than in the U.S. market because, one, the markets are smaller (which tends to dampen the upsides of a technology thriving on large volumes of inventory and a big number of bidders) and, two, the advertising industries of continental Europe are more conservative than those of the United States or the United Kingdom Privacy concerns over viewer and publisher data, which are greater in Europe than in the United States. Reinforcing these concerns is the fact that uniform data privacy standards have not yet been developed in the EU. Michael Guerin, Syndication and Ad Product Manager at Salary. com, elaborates: The search for higher CPMs in the US has led RTB to rely on data. Europe currently is in a state of flux as they work out how privacy is handled Europeans seem to guard their privacy more closely than Americans and others The propensity in Europe for entering into long-term tech contracts, as well as a reluctance to switch providers based on unsatisfactory performance. Telegraaf s van der Meij answers the question What is holding back the RTB market in Europe? with: One survey respondent stated that what s needed is better fill rates and penetration in international markets. Another publisher answered: CPM s are still too low, and there aren t enough buyers to create the demand and therefore push up the prices of inventory sold to a level that we d be more willing to trade at. Fragmentation of the European market is also reflected in the relationships between buyers and sellers, which vary from market to market. Automation will likely be met with resistance in regions where buyers have unique ways of negotiating media buys. For example, RTB cannot easily address discounts and other arrangements often made between agencies and publishers. Ultimately, however, buying and selling practices at the global scale may impact both buyers and sellers to the point where it is no longer efficient for them to maintain these localized business practices. Tech contracts. Companies sign up for a year or longer. If they use the wrong tech it takes time to switch. Switching tech also feels as a failure. That s holding them back. They should understand that switching tech is part of the process at the moment. If you want the industry to move into the automated space, you need to make sure you re ready as a publisher. If agencies aren t ready, offer them the DSP tech they need Fewer resources to quickly and effectively integrate new technologies such as RTB. Many European publishers remain in the Not in Play camp because they lack the resources to implement RTB. On the other hand, van der Meij points out that, in terms of technology, small size can actually be an advantage: Every country has its own speed of adopting. The Netherlands is up to speed. Why? Small country, so it s easier for the market to adopt new tech and step into the new phase. 20 Weide, Karsten, IDC White Paper, Real-Time Bidding in the United States and Western Europe, October , 22 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/9/2012

12 european publishers & SSPs 11 The PubMatic survey respondents were also queried on their use of supply side platforms beyond ad servers, these technology platforms for publishers optimize inventory management, with particular regard to unsold inventory brought to exchanges and ad networks. Most of the respondents utilizing RTB have used more than one SSP in the past year. Telegraaf s van der Meijand and TC Media s Latrielle are not surprised: van der Meij: It s a liquid market. Technology is evolving. There are reasons why publishers might switch. I don t think any of the current SSPs are where they should be YET. The industry will be evolving for another few years. 23 Latrielle agrees: We are in the early stages of the ecosystem, so people are experimenting. 24 However, Salary.com s Guerin cautions that management of an SSP requires more operations work, not less, and that publishers must take responsibility for understanding and utilizing SSPs to their own best advantage: On the positive side, van der Meij observes that more extensive use of RTB and SSPs will eventually yield more efficiencies: Just an SSP is more work another ad server. If you start moving into the automated trading space, it s less work. Because you won t manage every campaign any more. AdMonsters Beeler believes the big difference between the publishers who are moving more aggressively into automated trading and those simply testing the RTB waters is in fact their relationship with SSPs: If the only criterion a publisher uses to evaluate SSP solutions is how well they monetize unsold non-premium inventory, there really isn t a partnership. Looking at the data from the survey, many publishers have tried multiple SSPs in the past couple of years searching only for higher CPMs for unsold inventory. The bigger opportunity is to look at the SSPs as partners that can bring in other revenue beyond monetizing the non-premium impressions. Once a publisher engages with their SSPs in this way, the realization that there are real revenue opportunities starts to comes to light. You must have a deeper understanding of your inventory as a whole. You must be vigilant in the way that you handle your direct sales so they do not slip into the RTB setting , 24, 25 Interview by Rob Beeler, VP of Content & Media, AdMonsters, 5/9/2012

13 looking to the future: advice for european publishers 12 Without a doubt, RTB is growing and evolving in Europe, just as in the United States. And just as it has in the United States, it will inevitably penetrate European publishers direct sales as well as non-direct. Spending on RTB will grow not just for indirectly sold inventory premium inventory will also be sold via RTB on a much greater scale in the near future, said Rajeev Goel, Co-Founder and CEO of PubMatic. The benefits of automation are clear for all parties in the display ecosystem. 26 IDC s Weide agrees: While RTB-based direct display ad sales account for only a tiny portion of sales today, we expect that an increasing share of what are today person-to-person sales will migrate onto RTB platforms toward the end of the forecast period. We believe this will happen in order to achieve more integration and optimization of the value chain; make trading faster, more efficient, and less error prone; and ultimately improve ROI for both publishers and advertisers. 27 What can European publishers do to ease the transition and maximize benefits faster? AdMonsters Beeler offers this advice: 01 Don t view RTB as a complete solution, but as a component of your strategy. The PubMatic survey results suggest that many publishers focus on RTB only as a means to monetize unsold nonpremium inventory. In the process, they miss that RTB is only one component of the industry s efforts to improve efficiency viz-a-viz other media. Tools exist for publishers to control how their impressions are bought and sold and to apply sufficient business rules to protect their brands and avoid the risks of data leakage and ad quality. 02 Think of the global implications of programmatic buying. Market by market, there may not be enough buyers and sellers to currently maintain a self-sustaining regional programmatic marketplace. As programmatic buying becomes a best practice, this will change and publishers would be wise to help shape how their marketplaces operate. There are already global buyers who are looking for new sources of high quality inventory, and publishers may see new revenue opportunities emerge by offering a programmatic means to buy their impressions. 03 Develop the Digital Strategist role within your organisation. Having a junior operations person (e.g. trafficker) responsible for managing networks or an SSP to monetize unsold inventory is not a viable long-term strategy. AdMonsters is seeing the emergence of a senior Digital Strategist role that combines aspects of what is typically considered Ad Operations e.g., ad trafficking, inventory management, yield management with greater focus on technology strategy and business analysis. Operating at the Director, VP, SVP, and in the largest organizations CxO level, these Digital Strategists empower an organization to conclusively evaluate RTB and programmatic systems, determine their impacts and potential risks and benefits, enter into provider agreements and partnerships, and implement such systems successfully. If such a person doesn t exist in your organization, hire one, develop one or leverage a partner to help fill this gap. 04 Validate through active experimentation. Programmatic trading requires an active, engaged strategy. Part of the strategy is to put impressions into the marketplace to learn how the markets value them. The knowledge acquired through this experimentation can expose new opportunities as well as false assumptions. Programmatic trading offers insights into what buyers are looking for and what they are willing to spend. This can drive the direction of the company as a whole if used properly. 05 Realize that maximal value may require eliminating some inventory. Creating impressions is as easy as adding an additional ad tag onto a page. Therefore, supply will always outstrip demand in display advertising. Publishers need to take a hard look at their inventory and evaluate if it does in fact have value. This can be done by applying first- and third party data and seeing how it performs in the market. Impressions that provide little revenue will be removed, which should increase the value of the remaining impressions. 26, 27 Weide, Karsten, IDC White Paper, Real-Time Bidding in the United States and Western Europe, October 2011

14 looking to the future: advice for european publishers 06 Help drive CPMs up. The chief concern about RTB and programmatic buying is that it is designed to drive down CPMs. True: in a marketplace where the buy side determines the price, prices will necessarily go down. Additionally, if the marketplace is only working with poor quality inventory, the CPMs, by comparison to premium inventory, will be extremely low. Many European publishers are naively accepting this dynamic as a given. But a few the All Ins are seeing this new way of doing business as a means to increase the value of their inventory and raise CPMs. The key is for publishers to help the marketplace understand the value of their ad impressions. This requires European publishers to think beyond RTB and unsold inventory strategies and to truly understand what buyers are looking to buy. That is the challenge for all publishers, and more should take up the fight! 13 Future Publishing s Brett concludes optimistically: [European] publishers should consider themselves in a strong position: we have the content, the users, the data, advertiser relationships and access to RTB all the ingredients for a good media deal!