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ONLINE

ADVERTISING

TECHNOLOGY OVERVIEW
ONLINE ADVERTISING
Technology Overview

Table of Contents
1 Executive Summary 3

2 Online Advertising Market Overview 7

3 Online Advertising Vendor Landscape 11

4 Evolution of the Landscape 14

5 Analyst Bottom Line 17

Technology Overview Methodology 18


About Demand Metric 19
ONLINE ADVERTISING
Technology Overview

Executive Summary
ONLINE ADVERTISING TECHNOLOGY OVERVIEW 4

Executive Summary
“Half the money I spend on advertising is wasted. The problem is Programmatic Media Buying enables marketers to automate the buying,
I don’t know which half.” This quote attributed to John Wanamaker, a placement, and optimization of advertising based on preset parameters
19th-century retail merchant, is familiar to many of us. for budgets, audience segments, number of impressions, and other key
criteria for optimizing advertising ROI and reach. This will be covered in
That’s the real beauty of Online Advertising platforms. Unlike Wanamaker,
more detail later in this overview.
modern marketers do know which of their ads are working, converting,
selling, and driving revenue, often down to the last click. In the ecosystem of Online Advertising, there are three main ways
companies can purchase their ads:
Even better, not only do marketers know which Online Advertising
programs are working and how well, but they can also change the ads Directly from the site or publisher (or through that publisher’s affiliate
that aren’t performing-in real-time. program).

Today, Online Advertising can be characterized as fast, responsive, Through an ad network such as AdSense (Google) or The Destination
and immersive. Fast because online ads, especially those on mobile Travel Network.
devices, must catch the consumer at the very moment of consideration.
Through an online exchange (DoubleClick by Google, OpenX, or
Responsive because the ads must respond to behavioral or interest Yahoo! Ad Exchange) that matches advertisers to publishers.
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. Advertising options range from the traditional Paid Search or
The two biggest trends in Online Advertising are Real-Time Bidding Pay Per Click (PPC) and banner ads (web, mobile, social) to the
(RTB) and Programmatic Media Buying. new native and immersive ads that directly link sponsored and
unsponsored content and/or require direct participation of the
RTB enables advertisers to bid for available ad space with publishers consumer to provide the message.
at the precise moment a potential customer is looking for that type of
solution.
EXECUTIVE SUMMARY ONLINE ADVERTISING TECHNOLOGY OVERVIEW 5

Then there are the marketing options: standard advertising, retargeting, Benefits of Online Advertising Platforms
real-time ad versioning, direct-response campaigns, dynamic
You can advertise online without investing in an Online
segmentation models, etc.
Advertising solution. Marketers can purchase ads directly
The features of Online Advertising solutions will be discussed more in on a website, or through a publisher, for placement as they
the Online Advertising Vendor Landscape section of this report. have in traditional media buying, or by joining an Affiliate
Marketing program.
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 Ad Networks such as Google AdSense, Adversal, or Chitika
Advertising. (Leadbolt or Mojiva for Mobile Advertising) continue to be
the most popular way to purchase Online Advertising,
This report will also provide an overview of the top solutions for both
whether for paid search, PPC, banner, or display ads.
general Online Advertising and Mobile Advertising solutions so that
organizations can choose the solution that is right for them. However, given the current complexity of the market,
the trends toward functionality, such as retargeting,
From our research, one conclusion is clear: Online Advertising is
RTB, and local geo-targeting, means that any company
driving increased revenue and profits.
looking to place 20% or more of its ads online will get a
Organizations doing more than 20% of their advertising online should better ROI using an ad exchange and DSP.
consider investing in an Online Advertising platform.
Success in the rapid-fire, high-volume exchange environment
Demand Metric defines Online Advertising solutions as the requires the right tool, which usually means implementing
technologies, tools, and platforms that create, purchase, distribute, an Online Advertising platform or solution.
manage, measure, and optimize online media buying across
Online Advertising platforms are often called Demand
advertising exchanges and publisher private marketplaces.
Side Platforms (DSPs); they automate the purchase of
Online Advertising platforms manage the exchange of media between Online Advertising.
the demand side (advertisers) and the supply side (apps, websites) for
video, display, social, and mobile advertising.
EXECUTIVE SUMMARY ONLINE ADVERTISING: TECHNOLOGY OVERVIEW 6

Benefits to Demand Side Platforms (DSP) Benefits to Supply Side Platforms (SSP)
Online DSPs enable marketing organizations and advertisers to: On the other side of the equation, Supply Side Platforms
enable publishers to maximize ad revenue as well as ensure
Build optimal audiences with targeting and retargeting by
their web visitors get relevant advertising that works well
finely tuning customer segmentation.
with the content the site is providing.
Reach larger audiences with custom retargeting for discovery.
Like DSPs, SSPs enable fast, real-time advertising, help fill
Provide relevant ads based on optimized frequency,
advertising space at the best available price through RTB,
placement, and timing.
and reduce sales costs.
Design more effective and efficient ad campaigns.
Mobile SSPs offer these same benefits to app developers
Offer real-time personalization of image/display/mobile ads. and mobile websites.
Reduce production costs.
Most of the Online Advertising platforms reviewed in this
Optimize ad timing when the customer is in the mood to buy. report support both DSP and SSP functionally to some
Reach customers across multiple devices to reinforce message. extent.

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.
7

ONLINE ADVERTISING
Technology Overview

Online Advertising
Market Overview
ONLINE ADVERTISING TECHNOLOGY OVERVIEW 8

Online Advertising Market Overview


The big excitement around Online Advertising for Demand Generation Demand Metric’s research indicates that while Online Advertising
is the growing use of ad exchanges for the purchase and sale of among mid-market and smaller Enterprises is growing, it still lags
advertising. behind other Digital Marketing strategies as the preferred method of
reaching new customers.
Ad Exchanges function like an auction, similar to our major stock
exchanges, with the use of RTB. In Demand Metric’s newly released study, the Referral Marketing
Benchmark Report, Digital Advertising is number four on the list behind
Demand Metric’s Online Advertising Benchmark Report showcases the
social media, email marketing, and events. Digital Advertising stays at
growing trend toward both Online Advertising and RTB. Here are the
number four when we examine effectiveness.
highlights:
The top five strategies in use, defined with frequency of use (%), are as
70% of large companies, 53% of medium companies, and 54% of small
follows: social media (95%), email (90%), events (88%), Digital Advertising
companies are investing in Online Advertising.
(85%), and referral programs (83%). In terms of effectiveness, the top
37% of companies are spending more than $10,000 per month on Online five strategies, defined with the percentage reporting each strategy’s
Advertising. 52% are spending on average over $20,000 per month. effectiveness, are referral programs (68%), events (63%), email (62%),
The top benefits of RTB are that it is targeted, measurable, and provides Digital Advertising (57%), and social media (48%).
a proven ROI.

Demand Metric’s Online Advertising Benchmark Report


indicates that mid-market companies are considering more Online
VIEW RESOURCE
Advertising and RTB programs. Demand Metric believes that this
trend will not only continue but accelerate over the next few years.
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