Proprietary and confidential proposal ©2009 Undertone Networks

Quality | Control | Results

DIGITAL DOWNLOAD:

DSPs and the Ad Network Shakeout

Presented by: John Yearout, Sales Director, Undertone Networks

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24 Categories+

192 Companies

OVERWHELMING

Timeline

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Networks / Rep firms launch as few websites

have sales staff

1995

Dot Com Bust – many networks go out of business

1999/2000

2002

Ad Network Expansion, Ad ExchangesM&A Frenzy

2006/2007

2007: Why So Many Networks?

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Boom Resulted in Some Questionable Practices

• Help with campaign performance

• Reduce cost and drive profitability

• Relatively easy to execute / difficult to track

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Fraud Gained Traction In Display Advertising

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“Half Of Ad Impressions, 95 Percent Of Clicks

Fraudulent.”

“Software code running behind the scenes opened

more than 40 Web pages, each including three ads …

which were invisible to visitors.”

“Pay-Per-Click Web Advertisers Combat Costly Fraud.”

“Evolution of Click Fraud: Massive Chinese Operation

DormRing1 Uncovered. Racks up $3M in Fraudulent

Clicks in Two Weeks.”

Organized Click Fraud (Dormring1)

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Invisible iFrames, Invisible Ads

• “Software code running behind the scenes opened more than 40 Web pages, each including three …which were invisible to visitors.”

• iFrames can be manipulated to serve invisible ads

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The Daisy Chain

• Mpire executed 11 buys on nine networks and one exchange

– Actual fulfillment came from 45 downstream

networks and over 100,000 sites as a result of daisy-chaining

Network A

Network B

Network CAdvertiser

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Irrelevant International Impressions

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Timeline

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Networks / Rep firms launch as few websites

have sales staff

1995

Dot Com Bust – many networks go out of business

1999/2000

2002

Ad Network Expansion, Ad ExchangesM&A Frenzy

2006/2007

DSPs and the Ad Network “Shakeout”

2010

Everyone wants to be a network – publishers,

holding companies, etc.

2008/2009

2010

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Market Perspective: 2010 Forecast

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U.S. Display Advertising

DSPs3%

Source: GCA Savvian

U.S. Display Advertising: $8 billion

DSPs:$200 million

U.S. Display Advertising

DSPs25%

Market Perspective: 2014 Forecast

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Source: GCA Savvian

U.S. Display Advertising: $16 billion

DSPs:$4 billion

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Let’s Figure This All Out

Media Buying Platforms Ad NetworksAd ExchangesDSPs

Who do you use?

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Media Buying Platforms Ad NetworksAd ExchangesDSPs

DSPs: Demand Side PlatformsTechnology platforms that enable buy-side

entities to buy in an automated fashion across multiple distribution sources.

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Media Buying Platforms Ad NetworksAd ExchangesDSPs

MTDs: Media Trading DesksIn-house agency trading desks that leverage

DSPs and exchanges to buy media on behalf of agency clients.

Know the Advantages, Know the Trade-offs

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DSPs

VS

Access toScale

RTB/Low Cost

Control Data Usageand Costs

Limited Quality Control

Limited Rich and Complex Media

New Skillset/Headcount

Know the Advantages, Know the Trade-offs

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“Our buyers are very different. They are not trying to buy the

[home page] takeovers from the publishers. They actually want to

get mass reach on very commoditized banners.”

Nat Turner, CEO

Inventory Acquisition Model is Key Selection Factor

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Ad Exchanges

Other Networks

Portals

Direct from Publishers

Combination of the Above

“Those ad networks that simply aggregate insertion orders and fill them through either daisy chaining or exchange based buying will have a limited run.”

Brendan Moorcroft, CEO

AGENCY

The Media Plan of Today

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PortalsEndemic Publishers

100,000+ Publishers

Networks

AGENCY

The Media Plan of the Future

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PortalsNetworksEndemic Publishers

100,000+ Publishers

DSPs

Five Things Networks Must Deliver to Remain Relevant

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Unique Targeting

Insights/Research Service

ProductsUnique Inventory

Thank you for attending!

For more information, please contact:

John Yearout

Director of Sales

(415) 391-3646 ext. 110

jyearout@undertone.com

www.undertone.com

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