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

Executive Summary
“Half the money I spend on advertising is wasted. The problem is
I don’t know which half.” This 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 they can also 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.
ONLINE ADVERTISING TECHNOLOGY OVERVIEW 4
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 overview.
In the ecosystem of Online Advertising, there are three main ways
companies can 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.
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.
EXECUTIVE 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 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.
ONLINE ADVERTISING TECHNOLOGY OVERVIEW 5
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.
Success in the rapid-fire, high-volume exchange environment
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.
EXECUTIVE SUMMARY ONLINE ADVERTISING: TECHNOLOGY OVERVIEW 6

Benefits to Demand Side Platforms (DSP)
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.
Reach customers across multiple devices to reinforce message.
Benefits to Supply Side Platforms (SSP)
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.

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
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%).

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.
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.
Direct Model
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
Advertiser
ONLINE ADVERTISING TECHNOLOGY OVERVIEW 9
Ad Networks
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.
Ad Network
Publisher Advertiser
ONLINE ADVERTISING MARKET OVERVIEW ONLINE ADVERTISING TECHNOLOGY OVERVIEW 10

Ad Exchanges
Ad exchanges also facilitate transactions between Ad Exchange
publishers and advertisers; however, they operate
differently. Ad exchanges operate as auctions in the S D
Publisher Advertiser
marketplace. S S
P P
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.
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.

This model makes it easier for advertisers to fine tune their

ads to the specific site, device, and customer, and enables We examine the leading vendor solutions for Online Advertising and
publishers to get the highest value for their ad space. Mobile Advertising in the Vendor Landscape section of this report.
 ONLINE ADVERTISING TECHNOLOGY OVERVIEW 11

ONLINE ADVERTISING
Technology Overview

Online Advertising
Vendor Landscape
 ONLINE ADVERTISING: TECHNOLOGY OVERVIEW 12

Online Advertising Vendor Landscape

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.

Standard Features Advanced Features

The following features are key, standard features for DSP platforms: DSPs also offer the following features to enhance platform
functionality further:
Audience Targeting and Retargeting (web, social, mobile)
Ad Serving for Display Ads, Video, Mobile, and Rich Media Dynamic, Creative Optimization (which creates new ad
creatives in real-time)
Ad Versioning (modifying the ad for a specific market/customer)
Deeply Personal Retargeting (goes beyond retargeting the
Creative Services (Static and Dynamic)
company/brand to serving actual products previously viewed)
Real-time Dynamic, such as
Performance Management
Admotion’s Dynamic Creative Optimization
B2B Funnel Management
AdRoll’s Liquid Ads
Web Analytics
Campaign Management
Enterprise Integration
Audience Building and Discovery
Advanced Attribution and Decision Systems
Cross-device, Cross-platform Ad Integrity
Analytics, Reporting

Demand Metric’s Online Advertising Vendors Matrix covers

the offerings, key features, and unique strengths of 23 vendor VIEW RESOURCE
solutions for Website and Mobile Advertising.
ONLINE ADVERTISING VENDOR LANDSCAPE ONLINE ADVERTISING TECHNOLOGY OVERVIEW 13

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 System RFP

VIEW RESOURCE

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Online Advertising Vendor Evaluation

VIEW RESOURCE
 ONLINE ADVERTISING TECHNOLOGY OVERVIEW 14

ONLINE ADVERTISING
Technology Overview

Evolution of the Landscape

 ONLINE ADVERTISING: TECHNOLOGY OVERVIEW 15

Evolution 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 RTB enables advertisers to bid for available ad space with
automate the buying and placement of advertising based publishers at the precise moment a potential customer is
on preset parameters for budgets, audience segments, looking for that type of solution.
number of impressions, and other key criteria for optimizing
This dramatically increases the conversion rate for the ad. It
advertising ROI and reach.
also allows for higher quality metrics on advertising.
Although a small portion of Digital Advertising is purchased
Today, RTB usage is still low. Demand Metric’s Online
via programmatic systems today, the acceleration of ad
Advertising Benchmark Report pegged current usage
exchanges will increase the trend toward Programmatic
at around 11%. However, RTB is a key component of ad
Media Buying in the next several years.
exchanges, and that fact alone will increase its acceptance
According to Forbes, almost 90% of brands and agencies and use.
plan to up their use of programmatic buying of display, video,
and mobile ads by more than half in the next six months.
EVOLUTION OF THE LANDSCAPE ONLINE ADVERTISING TECHNOLOGY OVERVIEW 16

Branded Interactive Advertising 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.
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?

Digital Video
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.
 ONLINE ADVERTISING TECHNOLOGY OVERVIEW 17

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:

Evaluate your advertising ROI. How well is your current No Modern Marketing Organization can afford to ignore the Online
advertising campaign performing? Is it meeting your Advertising environment as part of a larger Demand Generation
revenue and customer goals? If not, it’s time to look for strategy. Online Advertising has matured from simple paid search
stronger performing ad vehicles. to display, video, social, and mobile advertising.

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.

Use the Online Advertising Vendors Matrix to choose the best

vendor solution for your ongoing Online Advertising needs.
 ONLINE ADVERTISING TECHNOLOGY OVERVIEW 18

Technology Overview Methodology

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

We provide a comprehensive overview of Customer

Engagement in the companion report Customer VIEW RESOURCE
Engagement Best Practices Report.
 ONLINE ADVERTISING TECHNOLOGY OVERVIEW 19

About Demand Metric

Demand Metric provides Agile Marketing software powered

by 1,000+ practical tools and resources to help our members
complete their work faster and with more confidence.

Our community of 125,000+ global members is composed of

CEOs and business owners, marketing consultants and agen-
cies, marketing executives and managers, and professionals
who specialize in: product management, marketing operations,
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tion, content marketing, project management, account-based
marketing, and other disciplines.
VIEW WEBSITE
To learn more about Demand Metric, sign up for a free member-
ship at: www.demandmetric.com
 ONLINE ADVERTISING TECHNOLOGY OVERVIEW 20

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