THE EVOLUTION OF AD-TECH

ECOSYSTEM

06 NOVEMBER, 2020

Prepared by:
Samarth Sikka
 WHAT WE’LL COVER
1. What is Ad Tech
2. Market Monopoly
3. Waterfall Era
4. Header bidding
5. Publishers control
6. Big Data
7. Programmatic for Mobiles
8. Cross Targeting (Online & Offline)
9. Rise of Tech players
10. GDPR
AD TECH DEFINED

Ad tech is the broad term for the tools

and software, that help marketers to
target, deliver, and analyse their digital
advertising efforts.
Ad Tech is designed to maximize the
marketing budgets, by showing right
content, to right person & right time,
and hence it saves money.
DECADE OF CHANGE
Consolidation of the market (Monopoly) -

Earlier in 2010, large companies such as Google bought up all elements of the
bid stream and ad technology, meaning that the majority of publisher
revenue and tech was Google. This began with Google buying Double Click

Google, with an intention to have a control over each impression, they made
ad serving low on cost to free on Google AdX. They started acquired majority
publishers, but, as it’s a saying, every free things has a cost to pay behind.
Google started taking control over publishers and they were restricted to
make changes on their own platform.

We will come on to how the monopoly was broken in further slides. Before
that, let us understand the bidding model which was followed during earlier
times and what was its impact on publishers.
 WATERFALL ERA

In earlier times, the Publishers used to use waterfall bidding methodology,

where exchange and advertiser were decided in order of highest average
payer to lowest average payer.

A publisher passes its inventory from one ad network to ad network in

descending order of importance until all impressions are (hopefully) sold.

Traditionally, i.e. in the Waterfall method, each ad networks submit their bid
if the previous ad network bid is rejected. The bids were taken from the
historical data, which is the average of previous bids. For example, there are
4 Networks, A, B, C, and D, with an average bid of $2, $1.75, $1.50, and $1
respectively. The network with the highest average bid will always be the
winner (Network A, $2 in this case) as it’s not real-time bidding.
The biding was not easy and publishers were loosing a lot of potential money.
The 2 major type of risks were,

1. Yield Risk: Publishes ad server picking to which partner to serve

impression, based on their avg yield.
Avg can be a bad predictor when every single impression is
worth and gives advantage to platforms giving impression by
impression. Hence, publishers were billing based on assumption, not on
actual value which could have been much higher.
It was counting every impression as same, whereas every impression
could have costed different and much more.

2. Fill Risk: Publisher ad servers intends to fill all spots with highest average
rate, but sometimes it was unable fill. Then, the system used to call to
another server, and the whole process repeats again and take sits own time.
Hence, calling a partner who cant fill the space, makes publisher looses
revenue.
Ad Server teams had to login multiple accounts for accurate
reporting, de-duplicate passed impressions, and constantly update the
exchange partners average rate.

Hence, it had huge amount of manual effort, which should ideally be

. automated.

Hence, the due to domino effect, and so much effort, publisher suffers.
 HEADER BIDDING

In 2014, the Header Bidding was introduced. The header bidding brought a turning
point in Ad tech industry. It is a programmatic auction, where a request for a bid, is
sent to multiple partners

In header bidding, the auction of all ad exchanges happen in real-time, all submit
their bids together at once, even before the page loads. So, when any user visits the
site, before the page loads, all ad exchanges submit their prices. This technology
brings the opportunity for publishers to maximize their revenues, as the bidding is in
real-time.

Now, from the previous example (waterfall), if Ad network C is willing to pay more
than Ad Network A in real-time, it will become the winner. Hence, we can optimize
an individual impression.
Effects on Ad Tech industry after the introduction of Header Bidding:
As discussed in in slide no 4, stating how Google monetised the Ad Technology space,
header bidding gave tough competition to Google. Hence, impressions go to header
bidding partners and Google servers simultaneously.
Header Bidding brought multiple other benefits for publishers,
 Publishers got better control to select to whom to show the ad, the price, they were
free to try any kind of innovation on their platform.
 Header bidding let publishers to connect with multiple demand side partners (DSPs),
hence getting more bid and revenue.
 The system became pretty transparent. The publishers had access to check their
advertisers, from which network they are getting , at what exact cost etc.
 As the header code is placed on the publishers site itself, hence the chances of data
discrepancy is very low. The auction and all transactions happens indie the platform,
hence chances of any discrepancy reduces drastically.
 Advertisers are also keep to invest in header bidding due to its transparent
environment.
 It competes Google AdX and works faster than it.

Publisher control choices:

Programmatic Advertising of 2015 enabled publishers, be it long tail bloggers or
brands/enterprises, to have greater control over their data, audience and their
campaigns.
The publishers got rights to decide what should go on their platform and what should
not.
Multiple Programmatic platforms completed and delivered features that range from a
deeper insight into the campaign filters to making sure that the user experience remains
optimized.
Publishers were asking for this freedom for quite some time and sooner or later,
companies that provide this control are going to find themselves favoured by the
publishers. It also started custom solutions for advertisers, depending on their
requirement s and objectives.
 Decade of BIG Data

Post 2010 the importance of data started rising, the digital marketing for publishers
was used to be all about finding advertisers, showing ads and earing revenue.

- With evolution of Big Data the ads became more personalized, targeted, and
interactive. Every publishers started serving specific group of people and
specific target audience in very intelligent manner, depending on the behavior,
activities etc.

- The publishers started understanding the behavior of their audience, started

showing better quality ads, hence better revenue.

- Publishers connected multiple repositories, making different buckets, based on

. their users preference.
PROGRAMMATIC FOR
MOBILES
From 2011 to 2019, mobile internet witnessed 504% growth. The publishing
Apps saw an exponential rise.

Between 2010 ad 2012, mobile technology grew like fire, so does Mobile
Advertisement.

The Programmatic Advertising platforms became ready for cross device

compatibility and capable of adapting a multi-device presence will be the
platforms publishers will gravitate to. Statistical and Probabilistic targeting
across devices is an inevitable power.

The Programmatic Advertising gave rise to cross device and multi platform
targeting, which was a boon for publishers. Targeting based on statistics and
probabilities is an inevitable power

With DSPs, ad servers and a solid infrastructure, Google spearheaded the

creation of advertising stacks which track the target audience by providing
unique IDs instead of the traditional cookies. A more concrete buyer persona
emerged from this change that the publishers cannot afford to miss.
Providing a deeper insight into reader behaviour, beyond the webpage and
heatmaps means the relevancy of advertising that the viewer experiences
will be more fluid, customized and a focused targeting as opposed to a
random automation. Publishers were able to make better informed decisions
about their ad spending.
CROSS TARGETING
ONLINE & OFFLINE
A lot of brands are offline and online and offline, both. The biggest hurdle in
digital marketing it to track what is happening on offline channels and ability
to compare the consumer behaviour on offline modes

The new Marketing technologies allowed Publishers to understand the offline

spending behaviour of their target audience by strategic tie ups with credit
card companies.

By end of 2016, the digital and conventional marketing platform like

television also started coming in sync. The technology became so advanced, it
started understanding the users television behaviour by the help of television
companies and mobiles. Hence, marketing became much more targeted and
precise.
 DECADE OF CHANGE
Rise of Tech for Publishers

Prebid.js: The first independent tech, with publishers in mind. Created by

Appnexus along with a consortium of ad tech vendors.

Later on a lot on other new players joined in the league.

Prebid.js was released around 2010, and was opened sourced. It broke the
monopoly of Google, and changed the whole revenue strategy for Publishers.
Later, another platform was developed “Pub Food”. It is also an open source
bidding platform made for publishers, for publishers.
 DECADE OF CHANGE
The General Data Protection Regulation

The GDPR law was officially declared on May 2018. The publishers cookie the
visitors, who are visiting their website. By cooking people, they were able to
collect behavioral data and other personal information and show them
personalized ads. Also, publishers used to share the data with platforms like
Facebook, Google for personalized advertisement without any user consent.

Now, with the roll of GDPR, on every website, the publisher has to take the
consent from the visitor, if he wants to share his/her data or not. The ads can
still be shown, without taking the consent, but they can not be personalized.

The key impacts on Publishers:

 Reduction in personalized advertisement.

 Reduction in revenue due to more generic ads and less targeted, especially
in Europe.

 Now consent has to be monitored by all ad tech business & Publishers in

the supply chain

 Once the user has given the consent, he/she can later delete the saved data
THANK YOU