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![Reallocation of Advertising Dollars: towards
the Death of Ad Networks?
“ Ad networks will transform or die. […] We bet broad, mass-
reach ad networks will disappear as DSPs crush ad network
margins.
” Shar VanBoskirk, Forrester
Current Value breakdown Future breakdown: ad networks are gone ?
(CPM, $) (CPM, $)
$5.00 $4,20
An $10B+
$0,50 opportunity?
$0,40
$0.50
$2.00 $1.80 $0.75 $2,15
$0.25 $0.30 $0.10
$0.35
$0.10
Advertiser Agency Ad Data Ad Ad Publisher Advertiser Agency DSP Data Ad Ad Publisher
Network Provider Exchange Serving Provider Exchange Serving
Source : Tradedoubler “Digital Day”](https://image.slidesharecdn.com/cf-adtechevent-121024144937-phpapp01/75/Clipperton-Finance-Ad-tech-conference-oct-23-2012-29-2048.jpg)
Uploaded byNicolas von Bulow
Clipperton Finance - Ad tech conference, oct 23, 2012
The document outlines the ad tech ecosystem as of October 2012, featuring a detailed analysis on the growth of online advertising, innovations within the industry, and emerging trends such as automation and convergence between performance and branding. It highlights significant investments in digital advertising with a history of private placements and transactional data. Furthermore, it discusses the evolving landscape of advertising technology and its implications for advertisers and agencies, emphasizing the need for advanced targeting and analytics.
Clipperton Finance - Ad tech conference, oct 23, 2012
- 1. Ad Tech Event London October 23rd, 2012 15 Stratton Street London W1J 8LQ, United Kingdom 10 rue du Mont Thabor 75001 Paris, France
- 2. Who IS CLIPPERTONFINANCE ?
- 3. Who are We? Values TOMBSTONES Multi-LOCAL Research
- 4. Who are We? Independence Loyalty Intuitu Personae Selectiveness TOMBSTONES Multi-LOCAL Research
- 5. Who are We? Values TOMBSTONES Multi-LOCAL Research
- 6. Who are We? $150 million Values $10 million Multi-LOCAL Research
- 7. Who are We? Values TOMBSTONES Multi-LOCAL Research
- 8. Who are We? Values TOMBSTONES Research
- 9. Who are We? Values TOMBSTONES Multi-LOCAL Research
- 10. Thought Leadership Research papers Transactions Research paper on E-COMMERCE EU E-Commerce Private Sales eCommerce Second hand fashion Social Commerce (Groupe Casino) Acquires Private Placement Private Placement Buy-Side Buy-Side Research paper on SOCIAL GAMING Online gaming Social gaming Social Casual Social Mobile Secondary placement Gaming Gaming Seller Nicomvest Private Placement Private Placement Sell-Side Sell-Side Research paper on AD-TECH Nov-09 sold to Travel Affiliation Ad Technologies New TV sell-side Audio Video Ad platform Server & measurement Private Placement Private Placement Private Placement Sell-Side
- 11. Why Focus on AD TECH & Online Advertising ?
- 12. Strong & SteadyUsage Growth… 2005 2011 CAGR 2005-11 Internet Users (worldwide) 0.9bn 2.1bn +15% Access POINTS (worldwide) 0.16 0.39 +16% Time Spent Online (US) 6h 13h +14% Online Buyers (EU) 18% 34% +11%
- 13. … Has Attractedan Increasing Amount of Advertising Dollars Online Online Advertising Revenue & Forecasts (2003-2014) CAGR 2003-14 +25% 105 94 82 71 60 49 52 39 29 14 20 9 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Clipperton Finance analysis, JPMorgan, Zenithoptimedia
- 14. … Which inturn Led to Sustained Investments (but subject to economic stress) Private Placements in Digital Advertising Businesses (number of $10m+ transactions) 65 62 58 56 51 45 Q4’12 62 Est. 34 52 57 51 20 39 31 35 19 1 6 6 5 3 5 3 3 2005 2006 2007 2008 2009 2010 2011 2012 N.. America Europe
- 15. … AND Anever more COMPLEX ECOSYSTEM!
- 16. Yesterday’s Ad TechEcosystem Advertisers Ad Networks Publishers Agencies Publishers Publishers
- 17. Today’s Ad TechEcosystem Advertisers Ad Networks Analytics Publishers Analytics SSPs Agencies DSPs Publishers Ad Exchanges Ad Servers Analytics DMP Publishers
- 18. What Happens NOW ?
- 19. What Trends areDriving the Market? INNOVATION Innovative tools New formats New devices CONVERGENCE Convergence between “Performance” & “Branding”, Devices & Consumer “timeline” AUTOMATION Strong demand for automated solutions that increase overall market efficiency CONSOLIDATION Ad tech space features active consolidation mechanics
- 20. What Trends areDriving the Market? INNOVATION Innovative tools New formats New devices CONVERGENCE Convergence between “Performance” & “Branding”, Devices & Consumer “timeline” AUTOMATION Strong demand for automated solutions that increase overall market efficiency CONSOLIDATION Ad tech space features active consolidation mechanics
- 21. New Tools EmpowerAdvertisers TARGETING & Customization Sophisticated targeting & customization capabilities Create tailored & highly- focused branding campaigns Measurement & Analytics Need for cross-media strategies Branding campaigns lack adequate measuring tools The typical indicators are suited for direct marketing, less for branding
- 22. New Formats: Videorunning the Show Display Advertising Market will be … a segment in which Start-Ups led by Video & Rich Media… have a card to play ($B, 2010-2017) Video ad reach in the US – oct. 12 $30 Total Internet 54% $25 BrightRoll 42% $20 Specific Media 34% $15 ADAP.TV 31% $10 / Google Sites 30% $5 TubeMogul 24% $0 Tremor Video 21% 2010 2011 2012 2013 2014 Videology 20% 2015 2016 2017 SpotXchange 20% Video Rich media (excl. video) Auditude 17% Static image Text ads Hulu 7% Source: Forrester Research Online Display Advertising Forecast, Source: Comscore
- 23. New Devices enableNew Possibilities Mobile Advertising Market Smartphone Tablet Connected TV ($B, 2010-2015) Rest of the world 20.6 +66% 5yr-CAGR 15.6 11.3 New Possibilities in Sight 6.8 Geo-localized Ads 1.6 3.3 Interactive Formats LOCAL Ads In-App Display Augmented Reality Source: Gartner, Deutsche Bank …
- 24. What Trends areDriving the Market? INNOVATION Innovative tools New formats New devices CONVERGENCE Convergence between “Performance” & “Branding”, Devices & Consumer “timeline” AUTOMATION Strong demand for automated solutions that increase overall market efficiency CONSOLIDATION Ad tech space features active consolidation mechanics
- 25. “ Advertisers need greater confidence that their online investments are helping them achieve their brand goals. ” Nielsen, “Beyond click & impressions”
- 26. “Interactive Is ReadyTo Lead Brand Campaigns” The old model of branding revolves around TV* Nate Elliott, Forrester: Performance Radio Internet “ It's time for marketers to wake up to the brand building potential of Advertising TV interactive channels because: Branding Print 1. Interactive marketing is proven to create brand impact 2. Interactive tools offer marketers Tomorrow’s branding model will be interactive new ways to tell stories 3. People trust what they learn about brands online ” Internet Advertising Performance Branding Website TV Radio Print Source : Adaption of Nate Elliott’s diagram published in “The Interactive Brand Ecosystem”
- 27. What Trends areDriving the Market? INNOVATION Innovative tools New formats New devices CONVERGENCE Convergence between “Performance” & “Branding”, Devices & Consumer “timeline” AUTOMATION Strong demand for automated solutions that increase overall market efficiency CONSOLIDATION Ad tech space features active consolidation mechanics
- 28. “ The adoption of automated solutions will wreak havoc on existing ” media-buying economics. Shar VanBoskirk, FOrrester
- 29. Reallocation of AdvertisingDollars: towards the Death of Ad Networks? “ Ad networks will transform or die. […] We bet broad, mass- reach ad networks will disappear as DSPs crush ad network margins. ” Shar VanBoskirk, Forrester Current Value breakdown Future breakdown: ad networks are gone ? (CPM, $) (CPM, $) $5.00 $4,20 An $10B+ $0,50 opportunity? $0,40 $0.50 $2.00 $1.80 $0.75 $2,15 $0.25 $0.30 $0.10 $0.35 $0.10 Advertiser Agency Ad Data Ad Ad Publisher Advertiser Agency DSP Data Ad Ad Publisher Network Provider Exchange Serving Provider Exchange Serving Source : Tradedoubler “Digital Day”
- 30. What Trends areDriving the Market? INNOVATION Innovative tools New formats New devices CONVERGENCE Convergence between “Performance” & “Branding” , Devices & Consumer “timeline” AUTOMATION Strong demand for automated solutions that increase overall market efficiency CONSOLIDATION Ad tech space features active consolidation mechanics
- 31. Today’s Ad TechEcosystem Advertisers Ad Networks Analytics Publishers Analytics SSPs Agencies DSPs Publishers Ad Exchanges Ad Servers Analytics DMP Publishers
- 32. Today’s Ad TechEcosystem Advertisers Ad Networks Analytics Publishers 1st Wave: 2007-2008 Analytics SSPs Agencies Ad Networks buy Ad Exchanges DSPs 2008 Publishers 2007 2007 Ad Exchanges Ad Servers Analytics DMP Publishers
- 33. Today’s Ad TechEcosystem Trad. Software Vendors Advertisers Ad Networks 2nd Wave: 2009-2012 External Software Vendors Analytics Publishers Analytics SSPs Agencies Enter the Ad tech game 2012 DSPs 2012 2011 Publishers 2009 Ad Exchanges 2009 Ad Servers Analytics DMP Publishers
- 34. Today’s Ad TechEcosystem Advertisers Ad Networks 3rd Wave: 2013-2015 Analytics Publishers Analytics SSPs Agencies Vertical Consolidation Strategy? DSPs Transversal Integration (mobile, video, …) ? Publishers Continued Consolidation of Tools, SSPs/DSPs by Traditional Software Vendors. And more? Ad Exchanges Ad Servers Analytics DMP Publishers
- 35. Selected M&A transactionsin Social Web Total Funding DEAL VALUE CASH on CASH (Venture, $m) ($m) buys 14 350 25x buys 90 689 8x buys 33 300 9x buys 54 321 6x buys 18 270 15x buys 15 400 27x buys 38 120 3x buys - 59 - buys 38 414 11x Source: Thomson One, Venture Source, Crunchbase, Clipperton Finance estimates
- 36. Panel discussion Jonathan Wolf Martijn Hamann Chief Product Officer Partner - Board Director of Unruly, Smartclip & Improve Digital Sorosh Tavakoli Mark Read CEO CEO WPP Digital