Online Advertising Technology Overview

ONLINE
ADVERTISING
TECHNOLOGY OVERVIEW

Technology Overview
Table of Contents
1 3
2 7
3 11
4 14
Executive Summary
Online Advertising Market Overview
Online Advertising Vendor Landscape
Evolution of the Landscape
18
17Analyst Bottom Line
Technology Overview Methodology
About Demand Metric 19
ONLINE ADVERTISING

Executive Summary
ONLINE ADVERTISING TECHNOLOGY OVERVIEW

4ONLINE ADVERTISING: TECHNOLOGY OVERVIEW
Programmatic Media Buying enables marketers to automate the buying,
placement and optimization of advertising based on preset parameters
for budgets, audience segments, number of impressions and other key
criteria for optimizing advertising ROI and reach. This will be covered in
more detail later in this report.
In the ecosystem of Online Advertising, there are three main ways
companies can use to purchase their ads:
Directly from the site or publisher (or through that publisher’s affiliate
program).
Through an ad network such as AdSense (Google) or The Destination
Travel Network.
Through an online exchange (DoubleClick by Google, OpenX or Yahoo!
Ad Exchange) that matches advertisers to publishers.
EXECUTIVE SUMMARY
“Half the money I spend on advertising is wasted. The problem is I don’t
know which half.” That quote attributed to John Wanamaker, a 19th-century
retail merchant, is familiar to many of us.
That’s the real beauty of Online Advertising platforms. Unlike Wanamaker,
modern marketers do know which of their ads are working, converting,
selling and driving revenue.
Often down to the last click. Even better, not only do marketers know
which Online Advertising programs are working and how well, but also
they can change the ads that aren’t performing-in real-time.
Today, Online Advertising can be characterized as fast, responsive and
immersive. Fast because online ads, especially those on mobile devices,
must catch the consumer at the very moment of consideration.
Responsive because the ads must respond to behavioral or interest triggers
to be relevant to clients. Increasingly, ads are also immersive, requiring
interactivity from the user to get the message and issue a call to action.
The two biggest trends in Online Advertising are Real-Time Bidding
(RTB) and Programmatic Media Buying.
RTB enables advertisers to bid for available ad space with publishers at the
precise moment a potential customer is looking for that type of solution.
Executive Summary
Advertising options range from the traditional Paid Search
or Pay Per Click (PPC) and banner ads (web, mobile, social)
to the new native and immersive ads that directly link
sponsored and unsponsored content and/or require direct
participation of the consumer to provide the message.

5ONLINE ADVERTISING: TECHNOLOGY OVERVIEWEXECUTIVE SUMMARY
Then there are the marketing options: standard advertising,
retargeting, real-time ad versioning, direct-response campaigns,
dynamic segmentation models, etc.
The features of Online Advertising solutions will be discussed more
in the State of the Marketing sub-section and the Online Advertising
Vendor Landscape section of this report.
This report will also take a close look at the benefits of Online
Advertising platforms, the state of the market and the complex
ecosystem of Online Advertising.
This report will also provide an overview of the top solutions for both
general Online Advertising and Mobile Advertising solutions so that
organizations can choose the solution that is right for them.
From our research, one conclusion is clear: Online Advertising is
driving increased revenue and profits.
Organizations doing more than 20% of their advertising online should
consider investing in an Online Advertising platform.
Demand Metric defines Online Advertising solutions as the
technologies, tools and platforms that create, purchase, distribute,
manage, measure and optimize online media buying across
advertising exchanges and publisher private-marketplaces.
Online Advertising platforms manage the exchange of media between
the demand side (advertisers) and the supply side (apps, websites) for
video, display, social and mobile advertising.
Benefits of Online Advertising Platforms
You can advertise online without investing in an Online
Advertising solution. Marketers can purchase ads directly
on a website or through a publisher for placement as they
have in traditional media buying or by joining an Affiliate
Marketing program.
Ad Networks such as Google AdSense, Adversal or Chitika
(Leadbolt or Mojiva for Mobile Advertising) continue to
be the most popular way to purchase Online Advertising
whether for paid search, PPC, banner or display ads.
However, given the current complexity of the market, the
trends toward functionality, such as retargeting, RTB and
local geo-targeting, means that any company looking to
place 20% or more of its ads online will get a better ROI
using an ad exchange and DSP.
Successintherapid-fire,high-volumeexchangeenvironment
requires the right tool, which usually means implementing
an Online Advertising platform or solution.
Online Advertising platforms are often called Demand
Side Platforms (DSPs); they automate the purchase of
Online Advertising.

6ONLINE ADVERTISING: TECHNOLOGY OVERVIEWEXECUTIVE SUMMARY
Online DSPs enable marketing organizations and advertisers to
Build optimal audiences with targeting and retargeting by
finely tuning customer segmentation.
Reach larger audiences with custom retargeting for discovery.
Provide relevant ads based on optimized frequency,
placement and timing.
Design more effective and efficient ad campaigns.
Offer real-time personalization of image/display/mobile ads.
Reduce production costs.
Optimize ad timing when the customer is in the mood to buy.
Reachcustomersacrossmultipledevicestoreinforcemessage.
Test advertising strategies, messages and creative design.
Experiment with new ways to reach an audience without
major production costs and ad spending.
Measure response in real time and immediately adjust
advertising strategies.
Link ad spending to KPIs.
Increasingly, as we see above, the quantifiable benefits to
Online Advertising platforms are better converting sales and
higher revenue advertising campaigns
On the other side of the equation, Supply Side Platforms
enable publishers to maximize ad revenue as well as ensure
their web visitors get relevant advertising that works well
with the content the site is providing.
Like DSPs, SSPs enable fast, real-time advertising, help fill
advertising space at the best available price through RTB
and reduce sales costs.
Mobile SSPs offer these same benefits to app developers
and mobile websites.
Most of the Online Advertising platforms reviewed in this
report support both DSP and SSP functionally to some
extent.
Benefits to Demand Side Platforms (DSP) Benefits to Supply Side Platforms (SSP)

Online Advertising
Market Overview

8ONLINE ADVERTISING: TECHNOLOGY OVERVIEWONLINE ADVERTISING MARKET OVERVIEW
The big excitement around Online Advertising for Demand Generation
is the growing use of ad exchanges for the purchase and sale of
advertising.
Ad Exchanges function like an auction, similar to our major stock
exchanges, with the use of RTB.
Demand Metric’s Online Advertising Benchmark Report showcases the
growing trend toward both Online Advertising and RTB. Here are the
highlights:
70% of large companies, 53% of medium companies and 54% of small
companies are investing in Online Advertising.
37% of companies are spending more than $10,000 per month on Online
Advertising. 52% are spending on average over $20,000 per month.
The top benefits of RTB are that it is targeted, measurable and provides a
proven ROI.
Demand Metric’s research indicates that while Online Advertising
among mid-market and smaller Enterprises is growing, it still lags
behind other Digital Marketing strategies as the preferred method of
reaching new customers.
In Demand Metric’s newly released study, the Referral Marketing
Benchmark Report, Digital Advertising is number four on the list behind
social media, email marketing and events. Digital Advertising stays at
number four when we examine effectiveness.
The top five strategies in use, defined with frequency of use (%), are as
follows: social media (95%), email (90%), events (88%), Digital Advertising
(85%) and referral programs (83%). In terms of effectiveness, the top
five strategies, defined with the percentage reporting each strategy’s
effectiveness, are referral programs (68%), events (63%), email (62%),
Digital Advertising (57%) and social media (48%).
Online Advertising Market Overview
Demand Metric’s Online Advertising Benchmark Report
indicates that mid-market companies are considering more Online
Advertising and RTB programs. Demand Metric believes that this
trend will not only continue but accelerate over the next few years.
ONLINE
ADVERTISING
Benchmark Report
V I E W R E S O U R C E

Direct Model Ad Networks
In the direct model, the publisher and advertiser complete
transactions without the aid of a third party.
The challenge with the direct model is the increasing
complexity of the market as the number of channels and
volume of digital advertising grows exponentially.
That has led both publishers and advertisers to move en
masse toward other models.
Publisher
Publisher
AdNetworkAdvertiser
Advertiser
Put simply, ad networks are marketplaces where adver-
tisers and publishers meet to exchange goods and
services. The ad network acts as a facilitator and conduit
of the transaction and takes a fee for services.
The key value of an ad network is aggregating inven-
tory across multiple sites to increase audience reach.
The services they provide include forecasting and
offering inventory (space for placement), negotiating and
completing the transaction.
ONLINE ADVERTISING MARKET OVERVIEW
Broadly speaking, as noted previously, the Online Advertising ecosystem has three models: direct advertiser to publisher; advertising networks and
advertising exchanges.

Ad Exchanges
Ad exchanges also facilitate transactions between
publishers and advertisers; however, they operate
differently. Ad exchanges operate as auctions in the
marketplace.
With the introduction of Real-Time Bidding (RTB),
exchanges operate as live auctions. In this environment,
the advertiser has ads available and the publisher has
space available.
However, the transaction for advertising does not occur
until it is triggered by an event, usually when a visitor
arrives at a website or clicks the app on her phone. At
this point, the auction begins and the exchange offers the
space to the bidders (advertisers).
The best bid wins the space and the ad is instantly deliv-
ered to the visitors on the site or device.
This model makes it easier for advertisers to fine tune their
ads to the specific site, device and customer and enables
publishers to get the highest value for their ad space.
ONLINE ADVERTISING MARKET OVERVIEW
We examine the leading vendor solutions for Online Advertising and
Mobile Advertising in the Vendor Landscape section of this report.
Publisher
AdExchange
S
S
P
D
S
P
Advertiser
DSPs that offer marketers and advertisers advanced
technology and tools to segment audiences, preselect
advertising parameters (programmatic buying), offer real-time
personalization and track consumers across devices and
sites with retargeting are a crucial component of effectively
using an advertising exchange.

Online Advertising
Vendor Landscape

12
This vendor landscape examines Online Advertising platforms and Mobile Advertising platforms. Focusing on DSPs, the vendor solutions in this landscape
have been evaluated by the criteria discussed in this section.
Online Advertising Vendor Landscape
Demand Metric’s Online Advertising Vendors Matrix covers
the offerings, key features and unique strengths of 23 vendor
solutions for Website and Mobile Advertising.
ONLINE ADVERTISING VENDOR LANDSCAPE
The following features are key, standard features for DSP platforms:
Audience Targeting and Retargeting (web, social, mobile)
Ad Serving for Display Ads, Video, Mobile and Rich Media
Ad Versioning (modifying the ad for a specific market/customer)
Creative Services (Static and Dynamic)
Real-time Dynamic, such as
Admotion’s Dynamic Creative Optimization
AdRoll’s Liquid Ads
Campaign Management
Audience Building and Discovery
Cross-device, Cross-platform Ad Integrity
Analytics, Reporting
Standard Features
DSPs also offer the following features to enhance platform
functionality further:
Dynamic, Creative Optimization (which creates new ad
creatives in real-time)
Deeply Personal Retargeting (goes beyond retargeting the
company/brand to serving actual products previously viewed)
Performance Management
B2B Funnel Management
Web Analytics
Enterprise Integration
Advanced Attribution and Decision Systems
Advanced Features
ONLINE ADVERTISING: TECHNOLOGY OVERVIEW

Demand Metric also recommends using the Online Advertising System RFP
to collect information from vendors on their product/services and the Online
Advertising Vendor Evaluation to assess vendors you are considering during
the research process.
ONLINE ADVERTISING VENDOR LANDSCAPE
Online Advertising System RFP
Online Advertising Vendor Evaluation
9O%LORE
M
IP
SU
M

15EVOLUTION OF THE LANDSCAPE
The changing Online Advertising Vendor Landscape, like most of Digital Marketing, is characterized by vendor consolidation, application integration
and Enterprise-level functionality. The rise of DSPs has been accelerated by the increasing volume and omni-channel advertising environment.
Demand Metric sees five key trends impacting the growth and capabilities of the Online Advertising market segment
Programmatic Media Buying Real-Time Bidding (RTB)
Programmatic Media Buying enables marketers to automate
the buying and placement of advertising based on preset
parameters for budgets, audience segments, number of
impressions and other key criteria for optimizing advertising
ROI and reach.
Although a small portion of Digital Advertising is purchased
via programmatic systems today, the acceleration of ad
exchanges will increase the trend toward Programmatic
Media Buying in the next several years.
According to Forbes, almost 90% of brands and agencies
plan to up their use of programmatic buying of display, video
and mobile ads by more than half in the next six months.
RTB enables advertisers to bid for available ad space with
publishers at the precise moment a potential customer is
looking for that type of solution.
This dramatically increases the conversion rate for the ad. It
also allows for higher quality metrics on advertising.
Today, RTB usage is still low. Demand Metric’s Online
Advertising Benchmark Report pegged current usage
at around 11%. However, RTB is a key component of ad
exchanges, and that fact alone will increase its acceptance
and use.

16EVOLUTION OF THE LANDSCAPE
Branded Interactive Advertising
Digital Video
Cross-screen Advertising
Branded Interactive Advertising offers blending advertising,
content and interactive participation for the potential
customer.
Interactive or immersive advertising invites the viewer to
participate in the ad by becoming a character and choosing
a role or by ranking or voting within the ad itself rather than
being directed to another site.
Native ads can also fall into this category, if they ask for
action other than direct purchase. Demand Metric expects
this form of advertising to increase dramatically in the
next couple of years. especially in certain settings such as
sporting events.
The Digital Video train has left the station.
It’s nearly impossible to visit any publisher site on the web
or on a mobile device to watch a content video without
first having to watch a video ad. Increasingly, video ads are
popping up in front of text-based content.
Through integrated advertising and retargeting, Cross-
screen Advertising means that a specific ad or product
can follow a customer from laptop to tablet to phone while
recognizing and responding to the actions taken by the
customer on any of these devices.
Mobile Advertising vendors, such as Millennial Media and
Drawbridge, are particularly focused on this functionality.
Today, cross-screen primarily refers to web, tablet and phone.
Soon, Smart TV will be included. Will watches and glasses
be close behind?

17ANALYST BOTTOM LINE
Analyst Bottom Line
As this report clearly shows, Online Advertising has matured in the last few years. If your organization is still on the fence about Online
Advertising or has not yet moved beyond the basics of paid search and PPC, follow these five steps to improve your current strategies:
Use the Online Advertising Vendors Matrix to choose the best
vendor solution for your ongoing Online Advertising needs.
No Modern Marketing Organization can afford to ignore the Online
Advertising environment as part of a larger Demand Generation
strategy. Online Advertising has matured from simple paid search to
display, video, social and mobile advertising.
Evaluate your advertising ROI. How well is your current
advertising campaign performing? Is it meeting your
revenue and customer goals? If not, it’s time to look for
stronger performing ad vehicles.
Evaluate your Digital Marketing mix and identify any
gaps. Do you have the right mix of advertising vehicles?
If not, evaluate your advertising program as a whole and
investigate new options.
Determine how and where Online Advertising fits into
your marketing plan and create smart goals.
Evaluate your tools and technologies for meeting these
goals. Use this report to consider new tools, such as DSPs.
Just as it was critical to drive your search rankings
with SEO, now is the time to evaluate how and where
Online Advertising fits best. MMOs should view
SEO as a strategic enterprise resource that must be
continually upgraded to stay ahead of the fast moving
SEO market landscape.

18TECHNOLOGY OVERVIEW METHODOLOGY ONLINE ADVERTISING: TECHNOLOGY OVERVIEW
Technology Overview Methodology
The Modern Marketing landscape is an ever-changing, ever-evolving
environment in which new strategies, technologies, vendors and
products appear continually.
Demand Metric Technology Overviews provide marketers with a
focus on a specific technology solution set or focus area so that
they are armed with the knowledge, information and tools they
need to develop effective strategies for their organizations.
Each Technology Overview involves hours of analyst research
(mainly publicly available information), is for a specific technology
solution, and is usually accompanied by several practical tools.
Our Customer Engagement series includes Technology Overviews on
Online Event Marketing
Advocacy and Loyalty
Gamification
Our practical tools are designed to provide marketers with the tools
and templates they need to plan for an initiative in a given focus
area, analyze the vendor landscape and select the best vendor for
their organization.
We provide a comprehensive overview of Customer
Engagement in the companion report Customer
Engagement Best Practices Report.

19ONLINE ADVERTISING: TECHNOLOGY OVERVIEWABOUT DEMAND METRIC
About Demand Metric
Demand Metric is a marketing research and advisory firm serving
a membership community of over 120,000 marketing profes-
sionals and consultants in 75 countries.
Offering consulting methodologies, advisory services, and
500+ premium marketing tools and templates, Demand Metric
resources and expertise help the marketing community plan
more efficiently and effectively, answer the difficult questions
about their work with authority and conviction, and complete
marketing projects more quickly and with greater confidence,
boosting the respect of the marketing team and making it easier
to justify resources the team needs to succeed.
To learn more about Demand Metric, please visit
www.demandmetric.com

Online Advertising Technology Overview

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Online Advertising Technology Overview