WPP Digital Xaxis Update
Transcript of WPP Digital Xaxis Update
Xaxis Update
WPP Digital
Programmatic ad revenue in the US reached $10.1bn in2014, accounting for 20% of total online ad revenue.
For the first time this year, programmatic transactionswill be a majority (52%) of non-search digital-ad spend.
Programmatic buying is on track to make up $14.88 billion of the approximately $58.6 billion digital advertising pie this year.
Programmatic TV to account for $10billion ofTV Budgets by 2019.
Presentation Title
Sources: GroupM 2014, eMarketer 2015, IDC 2015
2015 Global Ad Spend$560B
TV Spend
$226B40%
Digital Spend
$171B30%
Programmatic
$16B3%
Programmatic Landscape
AgenciesSocialRetargeters
AdNetworks
SSPs
Video
Publishers
Verification
Exchanges DSPs
AdServers
Performance
DMPs
The leading programmatic media & technology platform
50 Offices
950 Million spend managed
2800 + Clients130 Engineers
44 Markets
1,100 Employees
Xaxis completes Merger with 24/7 Media
Sale of OAS to AppNexus
GroupM launches targ.ad, the first proprietary audiences network in Germany
targ.ad TV launched, creating Europe's largest, audience-based video network in 10 Markets
Xaxis launches LightReaction
Xaxis launches Turbine
First Ad Server Debuted
First Banner Ad Served
Media Innovation Group develops first DSP and DMP
WPP acquires 24/7 Real Media
Google acquires
launches first DSP
1994-1998
Real Media and 24/7 Media Merge
to form 24/7 Real Media
WPP Launches
2005-2010 2014-2015
Xaxis launches
launches first ad exchange
Identity & Corporate Structure
SHARED TECHNOLOGY & OPERATIONS PLATFORMS
Ad Labs VisualizationTurbine Ad-ops
Delivering for Leading Global Marketers
Consumer Products
Dining & Entertainment Automotive
Finance & Insurance
Tech
Pharma Services
Retail
Travel
Innovation Drives Our Best Cases
Xaxis in 2015
2015 Priorities
Xaxis 2015 Performance
Global
EMPLOYEES1,100
MARKETS42
ANNUAL SALES
$950MM
CLIENTS
2,800+
GROWTHYoY
+27%
2 0 1 5
H I G H L I G H T S
L I G H T R E A C T I O N I N 2 0 1 5
1500+
CAMPAIGNS
300+
CLIENTS
24
MARKETS
121
EMPLOYEES
H I G H L I G H T S
Technology Integrated ActionX, Quismax and Turbine to create Light Reaction platform
Products Launched four new products: Mobile Performance, Mobile Re-engagement,
App Performance and Call Performance
Insights Established Perceptual Science research lab to bring principles of
neuromarketing to Light Reaction clients
Clients Developed new direct client relationships in addition to GroupM client base
C A S E S T U D Y : W A L B U S C H
Challenge
Generate new customer
sales online
Strategy
Look alike modeling
Dynamic creative
format
Results +17% in post-click sales
+10% revenue turnover
-8% cost per customer
Ongoing success Price on outcome of new
customer sales only
Always-on optimization and testing of creative formats
Industry Trends
VIDEO TRENDS
In the US, Digital Viewing Surpasses TV Viewing in Five Years
• US TV viewing is now in decline across all age groups for the first time ever
• History shows that when a physical medium begins to be eclipsed by a digital one, its decline can be rapid
26 Source: Nielsen, December 2014
“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction.”
Bill Gates
VIDEO TRENDS
Facebook Main Locus of Content Discovery and Consumption
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38%
43%
0%
10%
20%
30%
40%
50%
Apr-
12
Jul-
12
Oct-
12
Jan-1
3
Apr-
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Jul-
13
Oct-
13
Jan-1
4
Apr-
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Jul-
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Oct-
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Jan-1
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Apr-
15
Jul-
15
Parse.ly Network* Traffic by Source: Google vs. Facebook $, billions
Source: Parse.ly, August 2015; comScore, September 2014* Network of 400 publisher clients globally (6bn PVs and 1bn UVs per month)
11.3
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0
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4
6
8
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Jun-13 Sep-13 Dec-13 Mar-14 Jun-14
US Desktop Video Views, Age 15+Billions
Discovery is shifting away from Google search…
…while consumption is shifting away from YouTube
SUPPLY TRENDS
Ad Blocking Poised to Become Widespread
• Ad blocker usage grew 41% globally Q2 2014 to Q2 2015
• Short term financial impact minimal
– Ad blocking in iOS 9 will only affect mobile web ads, which account for <1/3 of total mobile ad spend
– UBS estimates that iOS 9 ad blocking will cost the advertising industry ~$1bn in 2016, assuming 20% of iOS 9 users choose to block ads
• Proactive strategy required now
– Value exchange: Sourcepoint
– Experience: Native / Content marketing
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2130
39
54
121
181
0
20
40
60
80
100
120
140
160
180
200
Global monthly active ad-blocking software usersmillions
Source: Adobe/Pagefair, August 2015; UBS, Sept 2015
SUPPLY TRENDS
Publishers Embracing Native Formats; Advertisers Spending More on Content Marketing
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US Native Display Advertising Market$, billions
Source: Business Insider, May 2015; IAB, April 2015
1.01.3
1.9
2.7
3.9
5.7
0
1
2
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2013 2014 2015 2016 2017 2018
Content Marketing Production% of total budget
36% 37% 42%
64% 63% 58%
2013 2014 2015
Traditionaladvertising videoproduction
Contentmarketing videoproduction
SUPPLY TRENDS
“Walled Gardens” Divided Among FB/GOOG + Emerging Entities
• Facebook + Google continue to execute walled garden approach; Emerging platforms e.g. Pinterest, Kik, Twitter, Instagram
• Other middleweight proponents are softening approach e.g. Amazon, AOL, Yahoo
• Partnership with specialist buying platforms; Focus on Cross-garden metrics / targeting
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Ad server DSP Exchange SSPNetwork/ Inventory
External demand
Ad server DSP Exchange SSPNetwork/ Inventory
SUPPLY TRENDS
Ad Quality: What Comes After Viewability?
• Fraudulent traffic
– Highly visible problem
• Mobile fraud: new methods
– Fraudulent in-app purchases
– Location data spoofing
– Still nascent, but gaining visibility
• Other metrics:
– Earned media; audience…
31 Source: Industry news
May 2014
Began guaranteeing 100% viewability
(3P verified) in the US, based on the GroupM standard
September 2015Announced third-party viewabilityverification for
YouTube
September 2015Announced third-party viewability
verification
Where can we focus our attention to get ahead in 2016?
Xaxis has been leading Google and Facebook on viewability, but they are now making moves to catch up
PERFORMANCE TRENDS
eCommerce: Buy Buttons Evolving Affiliate Marketing
• Problem: Clicks on mobile ads convert to sales 40-50% less often than do clicks on desktop ads
• Solution: “Buy buttons” on ads within apps where user credit card information is already stored
– Pinterest launches initial trial of buy buttons with Macy’s, Nordstrom, and other retailers – June 2015
– Facebook launches buy buttons for Page Posts and Promoted Posts via Shopify’s e-commerce platform – June 2015
32 Source: adMarketplace, August 2014
MOBILE TRENDS
Location Data Increasingly Used to Target Mobile
• Location-targeted ads will account for >40% of US mobile spend by 2018
• New use cases around location as an indicator of behavior:
– Event-based targeting
– In-store attribution
– Foot traffic analysis
• Accuracy will be key: 54% of ads are off target by more than 1km
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12.919.8
26.230.7 33.96.2
10.7
15.8
20.2
24.0
2014 2015 2016 2017 2018
Non-location-targeted Location-targeted
US Mobile Ad Spend, 2015-18$, billions
Source: eMarketer, Sept 2015 (search included); BIA/Kelsey, Jan 2015; Thinknear, May 2015
Location-targeted
CAGR
40%