From direct sales to programmatic media

Online media

Table of contents

Introduction .............................................................................................

In the beginning ......................................................................................

Direct sales ...........................................................................................

Then came technology ...........................................................................

Ad server ...............................................................................................

Ad network ...........................................................................................

Ad exchange .........................................................................................

Ad network and ad exchange .............................................................

SSP .........................................................................................................

DMP – Publisher ...................................................................................

DSP and trading desk .........................................................................

DMP – Advertisers ................................................................................

Ad networks and private deals ..........................................................

3

4

5

6

7

8

9

10

11

12

15

17

18

In summary ..............................................................................................

Programmatic media ...........................................................................

In practice .................................................................................................

Advertisers who want to get into programmatic media ..................

Publishers who want to get into programmatic media ....................

19

20

22

23

24

02

Introduction

Calls, negotiations, proposals, CPM. Based on these themes, online

media was developed. With all the access, portals, Internet users,

campaigns and companies that have emerged in the online media

ecosystem, creating a sales model which utilized applied technology,

automation and could handle large amounts of transactions became a

necessity. Thus, programmatic media was born. With it, processes

become faster, negotiations happen by means of real-time auctions, and

it becomes possible to target an audience, reaching the right person,

at the right time, and with the right approach.

All these changes have transformed not only the way we buy and sell

media, but the way we create media plans as well as the qualifications

required by professionals in this field. To explain in detail the steps of this

process, we have developed this material.

03

In the beginning

1

Direct sales

When the Internet came about, buying online media was done the same

way as offline media. It was bought by context, that is, according to the

theme of that portal or its section and each banner format had a fixed

value. And, there were also pop-ups. Remember? Quite invasive and non-

segmented.

Advertiser/agency

Publisher

In addition, purchases were made through direct negotiation, always

by CPM, between publisher and advertiser. The problem was that the

portals started having a lot of remnant inventory*.

*Remnant inventory is inventory which the portal can not sell.

05

Then came technology

2

Ad server

Reading the market, several companies stepped up to contribute and help

the two ends of the transaction: the buyer (agencies and advertisers) and

the seller (publishers).

The first thing a publisher has to do to sell their online inventory is make it

available. For this and for monitoring, managing and delivering campaigns

to sites through banners, Ad Server emerged.

Ad Server is a software that selects which ad is most appropriate for

each Internet user, which advertiser will have their campaign on that

banner, and, after airing, provides performance reports.

Examples of Ad Servers: DoubleClick for Publishers by Google, Smart Ad

Server, OpenX, Real Media and E-planning.

Advertiser/agency

PublisherAd Server

07

Ad network

Now, that there exists, a software where a portal could make its inventory

available, the problem of remnant inventory could be solved. For this, AD

Networks were created.

These are companies to which publishers can make remnant inventory

available. In these companies the remnant inventory is classified,

according to it's content, and then sold to advertisers.

This model was especially great for small publishers, who lacked the

capacity to sell their remnant inventories on their on. But this, along with

other small publishers, could solve that problem.

However, with so many Ad Networks popping up, other problems

appeared: Many companies were bidding for audiences and some

advertisers would end up buying the same audience on two different Ad

Networks.

Examples of Ad Networks: Boo-box.

Advertiser/agency

Ad Server PublisherAd Network

08

Ad exchange

With this technology came RTB (Real Time Bidding), in which advertisers

participated in real-time auctions (happening during the loading of a

webpage) to compete for an impression that interested them. Naturally,

the best bid won the impression.

Because it is an automated process, it is no longer possible to do this

through direct negotiation. From this, many tools have emerged.

To run this purchase process, Ad Exchanges, which acts as a stock

exchange of impressions, appeared. This means that with Ad Exchanges,

publishers could also make available their remnant inventory of

impressions and they can be traded through real-time auctions. The only

problem is that with the passage of time several Ad Exchanges have

appeared.

Exemplos de Ad Exchanges: Yahoo AdExchange, Google Exchange,

Facebook Exchange and E-planning Exchange.

Advertiser/agency

Ad Server Publisher

Ad Network

Ad Exchange

09

Ad network e ad exchange

Having doubts about the difference between the two? The difference is

Real Time Bidding (RTB), a technology only present in Ad Exchanges

which brings more transparency to trading, investment optimization and

greater reach.

Advertiser/agency

Ad Server Publisher

Ad Network

Ad Exchange

10

SSP

Then came SSPs (Sell Side Platform), platforms that monetize inventory

and sell it in the auction system (RTB). In this way, we achieve maximum

possible monetization for the publisher through a faster, more efficient

and practical process due to the fact that portals can set a minimum bid

amount and do not need to negotiate with each advertiser because the

platform already does it for them.

In addition, SSP allows the advertiser to choose how much to pay for each

ad.

Examples of SSPs: OpenX, PubMatic, Rubicon Project, AppNexus and Right

Media.

Advertiser/agency

Ad Server Publisher

Ad Network

Ad Exchange

SSP

11

DMP - Publishers

With millions of data points being collected from a variety of sources, the

need arose for a technology that could collect, organize, and activate

this information: Data Management Platform (DMP), is a platform where

you can analyze the information all in one place. Data collection can be

performed both from first party data** and third party data***.

Subsequently, the classification of data is carried out based on

demographics, consumption habits and interests, among other categories.

Finally, data can be activated through content personalization, audience

offers, lookalike, media kits, etc.

Audiences that access the portals can be segmented according to their

interests and browsing profile, for example. Through reporting, publishers

can use this information to qualify the sale of ad slots and produce more

persuasive media kits - with information about the industry of that

particular advertiser, for example - or to verify that the target of a

campaign accesses their portal.

**1st Party - Proprietary data, as it is known, is collected within the site itself. This reflects

visitors behavior within the site.

2nd Party - Information collected on partner sites, made available for your use. For

example: A flower company selling its 1st party data to a company that manufactures

chocolate.

***3rd Party - Third party data, is data collected on other websites. Clusters, data

forming a database, that enrich 1st party data, making it possible to have a more

comprehensive vision of Internet users profiles.

12

With DMPs, data can be made available through Ad Networks, Ad

Exchanges and/or SSPs. Thus, publishers can sell richer and more

accurate information about their audience (buying motivation,

preferences, social class, among others). With DMP, information is based

on the audience's browsing behavior and not just page content.

For example, a sporting goods campaign can be broadcasted to audiences

that access the economics section, because with data, it is possible to

recognize audiences who are interested in both areas.

Examples of DMPs: Navegg, Krux and Oracle/BlueKai

Advertiser/agency

Ad ServerPublisher

(with DMP)

Ad Network

Ad Exchange

SSP

DMP - Publishers

13

Each DMP delivers a different type of data.

Data that Navegg delivers is:

Purchase Intention

Products your audience has shown intent to purchase. That is, researched

on, compared prices, etc.

Brands

Brands of which your audience searches for or of which they intend to

purchase.

Interests

Visitor preferences. For example, preferred team, what they search for on

the Internet and some insights about their behavior offline. Such as if they

like to go to the movies, travel, DIY (do-it-yourself), and so on.

DMP - Publishers

14

Technology

Which browsers, devices, and operating systems are used to access the

Internet.

Location

In what country, state and/or city are your visitors from?

Demographic

Género, rango de edad, nivel de escolaridad, clase social, estado civil y

área profesional en la que se desempeñan.

Social Media

Which social media does your audience access?

Navegg EveryOne

It produces a deep analysis of these eight clusters, with the most

important information being the visitor's buying motivation.

Navegg EveryBuyer

Delivers information about the principle profiles of consumption in each of

the thirteen market industries.

DSP and trading desk

Have you noticed that all the creations until now were linked to publishers

and their needs? Well, the next development was the creation of DSPs

(Demand Side Platform) and Trading Desks, which leans more towards

the advertiser and was developed to meet the needs of this side of the

process.

DSP is a platform that automates the purchase of media and through

which advertisers and agencies buy the impressions which are in the Ad

Exchanges. Since a DSP can be plugged into various Ad Exchanges and

portals, media buying thus becomes concentrated onto one platform,

solving the problem of there being many AdExchanges, while optimizing

and speeding up the process.

Advertiser/agency

Ad ServerPublisher

(with DMP)

Ad Network

Ad Exchange

SSPDSPTrading

Desk

15

Advertisers or agencies can operate the platform alone or contract a

Trading Desk to perform this service. In both cases, the important thing to

understand is that decisions will be made on the basis of data.

Examples of DSPs : Brightroll DSP from Yahoo, Google DoubleClick Bid

Manager, MediaMath, Turn, Ignition One, Live Rail (video), Tubemogul and

Melt.

Examples of Trading Desks: Publya, Cadreon, Amnet, Affiperf and Melt.

Advertiser/agency

Ad ServerPublisher

(with DMP)

Ad Network

Ad Exchange

SSPDSPTrading

Desk

DSP and trading desk

16

DMP - Advertisers

In order to manage and be able to rank all of their data, advertisers

needed a DMP platform that would collect, organize, and activate the

audience. In this case, the driving benefits are:

• Retargeting

• Lookalike

• Campaign Attribution

• Web analytics

• Data-driven

• Cross-device

• Event-triggered

• Dynamic Creative Optimization

• Campaign Segmentation

• Personalization

Examples of DMPs: Navegg, Knux and Oracle/BlueKai.

Advertiser/Agency

(with DMP)Ad Server

Publisher (with DMP)

Ad Network

Ad Exchange

SSPDSPTrading

Desk

17

Ad network and private deals

Note how Ad Networks did not disappear from our diagram. This is

because they have recycled themselves and can now bridge the gap

between advertiser/agency and publisher or sell to Trading Desks,

DSPs, Ad Exchanges or SSPs.

Direct sales has also continued in existence and has accompanied the

technological evolution. Nowadays, it is possible to carry out private

deals on SSPs. That is, direct sale agreements, with special values, which

run on a programmatic platform. The sale is traditional but the operation

is modern.

Advertiser/Agency

(with DMP)Ad Server

Publisher (with DMP)

Ad Network

Ad Exchange

SSPDSPTrading

Desk

18

In summary

3

Programmatic media

All of these processes that automates the buying and selling of media, and

principally uses data to do it, is what we call programmatic media.

The biggest change we've seen from before until now is the automation

of the process. This allows for greater use of investment, inventory

and negotiations and in carrying out more effective campaigns. On

the next slide, you will see a chart showing the changes brought about by

programmatic media.

20

Before Programmatic With Programmatic

Negotiation Direct between advertiser/agency and portal.

Direct, but mostly, through RTB.

Platforms Unnecessary because everything was done manually.

Transactions occur through a DSP.

Audience Segmentation

Purchases were by context. Either the most accessed spaces were chosen or spaces that contained specific content that could be read by a certain audience. For example: sporting goods companies advertised in the sports pages.

Purchase by audience. You choose the audience profile that you want to impact. ****Not only does the demographic data matter but also preferences, purchase intentions and the motivations of the Internet user. This allows, for example, the sporting goods company to advertise to people with an intention to purchase a particular type of product, regardless of the pages where they navigate.

Dispersion

There was a lot of dispersion because, using our example above, the sports pages reached people who had no intention of buying sporting goods.

Here the shot is accurate. With segmentation, there is no further dispersion of ads on random sites.

EfficiencyYou paid for an inventory that could have a lot of dispersion.

Investment is optimized because you reach only the people who are relevant.

****To find out what Internet user's

characteristics are, DSPs use data provided

by data providers. To find out what your

target audience profile is, agencies and

advertisers use the information provided by

analytics specializing in bringing qualitative

information about target audiences or

information from a DMP.

Programmatic media

21

In practice

4

Advertisers who want to get

into programmatic media

To get started, companies should first consider these points:

1. Investment - As we can see above, there are a number of platforms

that will be needed if we are to enter this world: DSP, DMP, Data Provider,

Trading Desk (to operate the DSP, if you prefer). In addition to the costs of

these platforms, you should also consider your campaign budget. Some

DSPs and Trading Desks charge minimal investment amounts.

2. Support - We advise you to have an IT team to provide technical

support related to the installation of API tags and integrations, in addition

to marketing and commercial area professionals, ready to handle issues of

BI, campaigns, programmatic media, and data usage.

3. Prior Steps - Before moving onto programmatic media, it is worthwhile

to take a few other steps. Like, having a CRM, retargeting, buying

sponsored links and/or social media ads and knowing the profile of your

audience.

Having considered these points and decided that programmatic is the

best strategy, it's time to look for a DSP or a Trading Desk (best suited for

beginners in this field) and a DMP.

If it's not yet the time, you can prepare by saving your audience

information with CRMs and analytics solutions specialized for this – like

Navegg Solution for websites, blog and e-commerces. These platforms

will store information about your audience, which will be valuable when

the time is right for programmatic media.

23

Publishers who want to get

into programmatic media

To get started, companies should first consider these points:

1. Investment - As we can see above, you will need to invest in DMP

platforms.

2. Support - We advise you to have an IT team to provide technical

support related to the installation of API tags and integrations, in addition

to commercial operations professionals who are ready to handle issues of

campaigns, programmatic media, and data usage.

3. Volume - Ideally, the portal should have at least 15 million page views

per month.

Having considered these points and decided that programmatic is the best

strategy, it's time to look for a DMP and align with your business team.

If it's not yet the time, look for more basic analytics solutions - such as

Navegg Solution for websites, blog and e-commerces which can store

information about your audience, which will be valuable when the time is

right for programmatic media, and for creating more persuasive media

kits.

24

Navegg is the benchmark in the data intelligence market and with online audience data in Latin America. Founded in

2008, Navegg, based in Brazil, analyzes navigation habits, interests and web audience behavior on desktops and mobile

devices. Navegg has a database of over 250 million Internet users on more than 100,000 websites, blogs, portals, search

engines and e-commerces.

Navegg's proprietary technology classifies Internet users based on browsing behavior. Currently, eight out of ten of the

leading publishers in Latin America use Navegg solutions for content personalization and campaign targeting, as well as

large agencies and advertisers, e-commerces and blogs.

navegg.com/en