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GLGi: Online Ad Networks. © 2007 Gerson Lehrman Group Inc., All Rights Reserved Council Member Biography Bart Barden is the Chief Executive Officer at.

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Presentation on theme: "GLGi: Online Ad Networks. © 2007 Gerson Lehrman Group Inc., All Rights Reserved Council Member Biography Bart Barden is the Chief Executive Officer at."— Presentation transcript:

1 GLGi: Online Ad Networks

2 © 2007 Gerson Lehrman Group Inc., All Rights Reserved Council Member Biography Bart Barden is the Chief Executive Officer at Red Zone Digital, a company providing online advertising consultancy services for clients such as MSNBC and Popcap Games. He specializes in content development, social communities, mobile advertising, optimizing online marketing spend, and ad serving technology. Previously, he was a group product manager at MSN.com, the internet division of Microsoft, where he was responsible for the development, planning and performing strategic analysis of advertising technologies; and senior consultant at Ernst and Young. He is experienced in ad products for brand and direct marketing, paid-search, contextual advertising and targeting, content monetization, streaming video, rich media, infrastructure and platforms, and business development services. He is knowledgeable in advertising and platform solutions, evaluating ROI for online marketing, and advertising opportunities within video, mobile, gaming, and other publishing applications and services.

3 © 2007 Gerson Lehrman Group Inc., All Rights Reserved Table of Contents What is the competitive landscape of ad networks? How do ad networks work? How are ad networks making money? What are the current and future trends for ad networks?

4 © 2007 Gerson Lehrman Group Inc., All Rights Reserved About GLG Institute GLG Institute (GLGi SM ) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community. GLGi hosts hundreds of Seminars worldwide each year. GLGi clients receive two seats to all Seminars in all Practice Areas. GLGis website enables clients to: Propose Seminar topics, agenda items and locations View and RSVP to scheduled and proposed Seminars Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members Share Seminar details with colleagues or friends

5 © 2007 Gerson Lehrman Group Inc., All Rights Reserved Gerson Lehrman Group Contacts John Aronsohn Vice President Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-984-3673 jaronsohn@glgroup.com Christine Ruane Senior Product Manager Gerson Lehrman Group 850 Third Avenue, 9th Floor New York, NY 10022 212-984-8505 cruane@glgroup.com

6 © 2007 Gerson Lehrman Group Inc., All Rights Reserved IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project. You acknowledge and agree that Gerson Lehrman Group does not screen and is not responsible for the content of materials produced by Council Members. You understand and agree that you will not hold Council Members or Gerson Lehrman Group liable for the accuracy or completeness of the information provided to you by the Council Members. You acknowledge and agree that Gerson Lehrman Group shall have no liability whatsoever arising from your attendance at the event or the actions or omissions of Council Members including, but not limited to claims by third parties relating to the actions or omissions of Council Members, and you agree to release Gerson Lehrman Group from any and all claims for lost profits and liabilities that result from your participation in this event or the information provided by Council Members, regardless of whether or not such liability arises is based in tort, contract, strict liability or otherwise. You acknowledge and agree that Gerson Lehrman Group shall not be liable for any incidental, consequential, punitive or special damages, or any other indirect damages, even if advised of the possibility of such damages arising from your attendance at the event or use of the information provided at this event.

7 Ad Network Review Bart Barden Red Zone Digital

8 Contents Product Offerings Value Proposition to Advertisers Value Proposition to Publishers Revenue Generation Top Networks: –Advertising.com –Yahoo/ Right Media –Tribal Fusion –Drive PM (AQNT) –AdSense (Google)

9 Ad Network Product Offerings Run of network Site visitor-specific targeting Vertical targeting View-based conversions Behavioral targeting

10 Ad Network Value Prop: Advertisers Performance spend Reach Optimization based on minimal spend goals Behavioral targets Identification of value Account management Reporting systems Support Multiple ad types: –Display –Text-based

11 Network Value Prop: Publishers CPM payment for ad inventory No platform adoption payment No ad operations resources No ad sales resources needed Simple set up Low commitment terms

12 How an Ad Network Generates Revenue % of conversion fees: –Charge for *platform use* –20-30% depending on volume Revenue share with publishers –Action or acquisition fee is shared with publishers Terms: –Minimum spend recommendation based on CPM to *Seed* system –Pre-determined CPA for initial agreement –Network will attempt to minimize risk by trying to get advertiser to commit to CPM, CPC or CPL spend

13 Calculating Yield RevE = (IMP x CTR x CON%) – CPAGOAL – (CPM x IMP) Key: RevE= Revenue Efficiency –Want to be greater than 1.00 –Think ROI IMP = Total Impressions purchased CTR = User clickthrough on ads CON% = User conversion to a sale once they reach marketers site CPAGOAL = The bounty the marketer is willing to pay for an acquisition or sale: –Usually a percentage of sales or cost per lead or application CPM = blended CPM that the ad network is charging for each impression

14 Advertising.com Largest ad network: –Reach –Total inventory controlled Flexible agreement terms Larger recommended minimum spend Site-specific visitor targeting Largest international footprint Larger chance for duplication due to network size Superior account management

15 Yahoo/Right Media/Blue Lithium Ad Exchange and Ad Network Ad Exchange small part of revenue story Flexible agreement terms Looking to integrate with Yahoo ad engine and platform Blue Lithium adds key behavioral targeting and improves user data set to platform

16 Tribal Fusion Require larger minimum CPM spend Prioritize best clients in system Superior customer service Enable vertical content targeting

17 Drive PM Tied to several large portals via remnant program –MSN –OPA Smaller in size Linked to Atlas DMT and sold as packages Inferior reporting

18 AdSense Substitute for Ad Networks Requires lower Self-service Pure CPM model Can specify images or video Optimization can increase yields but must be done via site resource


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