Demand-side Platform Myth Busters
In just a few short months, the term demand-side platform (DSP) has become ubiquitous in the online advertising industry. It has become synonymous with all things real-time bid, exchange-sourced, display advertising — in many cases replacing the mainstay term “network” as the model of choice for advertisers. All kinds of media brokers are now scrambling to offer a DSP solution, relegating words like “network” and “optimizer” to the dustbin of display terminology. But as more platforms wade into the opportunity waters, it seems like an equal amount of fog is being injected into industry discussions. So I thought it would be an opportune time to lift some of that fog and expose several of the bigger DSP myths being perpetuated today.
Myth 1: DSPs are really just networks in disguise False. There are some real differences between DSPs and networks, but recent trends have blurred those lines and given birth to this popular myth. At a fundamental level, traditional networks rely on a large stable of direct publisher relationships to deliver premium placements, easy reach, and ample scale, while owning the media risk and performance responsibilities. Many of these traditional networks live on today amid the DSP wave, successfully delivering campaigns along the way. But networks have begun to rely on exchanges as easy aggregation points for quick scale, and that is what started the move to DSPs. Then when the networks began to layer on automated optimization and advertiser-facing controls alongside their exchange-sourced media — either managed or self-service — they started to look like a lot like DSPs. This is how the whole DSP phenomenon began to accelerate. As networks began to rely heavily on exchange-sourced media while automating the trafficking process and exposing levers and knobs to the advertiser, some essentially became demand-side platforms. With the scale of the real-time bid exchanges and external facing controls, yesterday’s traditional ad network becomes today’s “hot” DSP. But there aren’t going to be as many DSPs as ad networks — read on for why.
Read More: iMediaConnection
McGrory’s and Right Media’s Evolution: Part I
“It wasn’t like I sat down and said, ‘I’m going to go into advertising!” admits Ramsey McGrory, head of Yahoo Right Media Exchange and North American Marketplaces. “I feel like I lucked into advertising. It has quirky people, technology, psychology, creative people, technical people… It’s a nutty space, it’s a different space.” Fresh from getting his master’s at Georgia Tech, McGrory was hired by Citigroup and completed its two-year derivatives program. Though he wasn’t a fan of the culture, he’s always kept a soft spot for the actual concept. “Advertising is often about risk reduction or risk enhancement,” he says. “It’s not exactly the same as the derivatives market; the whole world isn’t going to collapse because I sold a CPM campaign.” McGrory was in Citi’s highly regarded management training program on what looked like a fast track to a cozy financial executive spot when Citigroup merged with Travelers Group and Salomon Brothers. The higher-ups offered him a desk job or a year’s salary to walk away. Considering he wasn’t thrilled with the world of derivatives products, the latter appeared to be an opportunity.
Read More: Adotas
First Apple iAds Hit the iPhone
Following the official launch of Apple’s iAd mobile advertising platform on July 1st, ad units for Unilver’s Dove brand and Nissan’s Leaf model have now begun appearing in some ad-supported iPhone applications running on the new iPhone OS 4.0. Dove’s Men+Care ads showcase branded content featuring pro-baseball players Albert Pujols and Andy Pettitte. In addition, they allow users to browse Dove’s range of Men+Care products and offer them the chance to win signed baseballs.
Read More: ClickZ
Why Facebook Killed A $100M Baby
This evening Facebook announced that they will officially kill the company’s gift shop on August 1st of this year. Currently generating tens of millions of dollars for the company a year, one has to wonder why the company would take such dramatic steps. Facebook regularly touts how few developers run each segment of their business, but even if the company was generating tens of millions on a couple of developers, apparently more can be generated with the small gifts team working on other projects. So what does this really mean? We are to assume that Facebook’s gift shop has been growing since they were projected to have a $35 million annual run rate back in 2008, there’s no doubt that the company could easily be selling tens of millions of dollars in gifts each year, at a minimum. However the rise of FarmVille and the social gaming ecosystem on Facebook has driven virtual goods transactions away from Facebook’s core gift shop. The result is that Facebook’s virtual goods business may have been somewhat damaged. If you had been offered to purchase all the revenue of Facebook’s gift shop going forward in 2008, you may have been willing to pay a pretty penny, if the company was really generating $35 million a year from the shop. While $100 million may be pushing the limits on the value of future virtual goods cash flows, it’s not an unreasonable number. However now the gift shop has become filled with damaged goods that no longer stand out from the numerous other gifts.
Read More: AllFacebook.com
